SM.66 A small regional retailer is looking for ways to increase profits. Given its impressive record of growth, the sale
Posted: Sun Jul 03, 2022 5:23 pm
SM.66 A small regional retailer is looking for ways to increaseprofits. Given its impressive record of growth, the sales andmarketing vice president wants to target a 8% increase in sales tomeet the profitability goals. The company currently has revenues of$27,000,000 (annually), spends 61% of its revenues on purchases,and has a net profit margin of 2.75%. You are a buyer working forthis company and you want to show the vice president that it may beeasier to reach the profitability goals by lowering purchasingexpenses.
1.) If the company achieves its revenue growth target of 8%, byhow many dollars would revenue increase? (Display your answer as awhole number.)
2.)Assuming that revenues stayed flat (meaning the company didnot try to increase sales by the 8 percent target), by whatpercentage would they have to decrease purchasing expenses to equalthe increased profit that would have come from a 8 percent increaseto revenues? (Write your answer as a percentage, and display youranswer to two decimal places.) % Note: This question is to stretchyour mind a bit and to show how much more, on a percentage basis,sales must increase in order to equal the bottom-line benefits of amodest decrease in purchasing expenses. There will not be aquestion like this on any assessment.
3.)The sales increase targeted percentage is _____ (how many)times bigger than the required percentage decrease in purchasingexpenses. (Display your answer as a whole number.
1.) If the company achieves its revenue growth target of 8%, byhow many dollars would revenue increase? (Display your answer as awhole number.)
2.)Assuming that revenues stayed flat (meaning the company didnot try to increase sales by the 8 percent target), by whatpercentage would they have to decrease purchasing expenses to equalthe increased profit that would have come from a 8 percent increaseto revenues? (Write your answer as a percentage, and display youranswer to two decimal places.) % Note: This question is to stretchyour mind a bit and to show how much more, on a percentage basis,sales must increase in order to equal the bottom-line benefits of amodest decrease in purchasing expenses. There will not be aquestion like this on any assessment.
3.)The sales increase targeted percentage is _____ (how many)times bigger than the required percentage decrease in purchasingexpenses. (Display your answer as a whole number.