I need it in 20 minutes. SM.66 A small regional retailer is looking for ways to increase profits. Given its impressive r
Posted: Fri Jul 01, 2022 9:05 am
I need it in 20 minutes.
SM.66 A small regional retailer is looking for ways toincrease profits. Given its impressive record of growth, the salesand marketing vice president wants to target a 5% increase in salesto meet the profitability goals. The company currently has revenuesof $30,000,000 (annually), spends 68% of its revenues on purchases,and has a net profit margin of 2.25%.You are a buyer working for this company and you want to show thevice president that it may be easier to reach the profitabilitygoals by lowering purchasing expenses.If the company achieves its revenue growth target of 5%, by howmany dollars would revenue increase? (Display your answer asa whole number.)Assuming that revenues stayed flat (meaning the company didnot try to increase sales by the 5 percent target), by whatpercentage would they have to decrease purchasing expenses to equalthe increased profit that would have come from a 5 percent increaseto revenues? (Write your answer as a percentage, and display youranswer to two decimal places.) %
Note: This question is to stretch your mind a bit and to showhow much more, on a percentage basis, sales must increase in orderto equal the bottom-line benefits of a modest decrease inpurchasing expenses. There will not be a question like this on anyassessment.The sales increase targeted percentage is _____ (howmany) times bigger than the required percentage decrease inpurchasing expenses. (Display your answer asa whole number.)
SM.66 A small regional retailer is looking for ways toincrease profits. Given its impressive record of growth, the salesand marketing vice president wants to target a 5% increase in salesto meet the profitability goals. The company currently has revenuesof $30,000,000 (annually), spends 68% of its revenues on purchases,and has a net profit margin of 2.25%.You are a buyer working for this company and you want to show thevice president that it may be easier to reach the profitabilitygoals by lowering purchasing expenses.If the company achieves its revenue growth target of 5%, by howmany dollars would revenue increase? (Display your answer asa whole number.)Assuming that revenues stayed flat (meaning the company didnot try to increase sales by the 5 percent target), by whatpercentage would they have to decrease purchasing expenses to equalthe increased profit that would have come from a 5 percent increaseto revenues? (Write your answer as a percentage, and display youranswer to two decimal places.) %
Note: This question is to stretch your mind a bit and to showhow much more, on a percentage basis, sales must increase in orderto equal the bottom-line benefits of a modest decrease inpurchasing expenses. There will not be a question like this on anyassessment.The sales increase targeted percentage is _____ (howmany) times bigger than the required percentage decrease inpurchasing expenses. (Display your answer asa whole number.)