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Hello
iv) They ask the figures for the new factory at 103m profit get put against 2005 dashboard figures. i don’t understand their answer at all. Did you do any lectures on the performance dashboard?
Regards
There is no topic called ‘the performance dashboard’. The phrase just means performance report, or a summary of performance showing the main measures. This is defined for this company by Appendix 1 in the question. (iv) wants you to update this for the new factory and to criticise the choice and/or display of the figures shown on the dashboard.
The answer is badly worded. In (iii), the three possible scenarios are evaluated. As it points out, using an expected value might be inappropriate because that will never arise, so for part (iv) the examiner assumed that the medium option is the one to evaluate and rounded the profit to 103m. This profit is an incremental effect ie a bit like contribution: revenue less variable cost less fixed costs for the new factory. It is assumed that the foxed costs of the old factory are still borne, so change in profit is the old contribution less the new ‘contribution’ from the new factory. This gives a fall in final profits of 5m.
I got that part, but if you work the 103m back, add the 2500 fixed and work on 53 contribution then the revenue is 149 odd miilion, not 273
But the question doesn’t stack up like that. This company sells more than just shoes:
2015 Rev (Appendix 1) = 273m
Revenue from shoes (Appendix 3) = 2m x 75 = 150m
I don’t think I can usefully add more for this question.
thanks, i am thinking too much. I am trying to place everything. I must accept the figures they give, like the ROCE at 41.6. Just divide 71 by 41.6 and x 100 and there is the capital employed figure. Don’t look for it somewhere in the paper
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