Financial Analysis of Billing AS: Production Plan, Sales Revenue, Joint Venture with Sea Dragon

Table of Contents
Determine the manufacturer's selling price in the Norwegian market for all billing sailboats for the
coming year.............................................................................................................................................2
Determine the CIF prices in foreign currencies for the B-29 and B-33 to the importers in Denmark,
Sweden, Poland, Great Britain, Germany and Russia..............................................................................2
Develop a production plan for Billing AS for the coming year.................................................................4
Based on your production plan, develop a projected income statement for the coming year................4
Should Billing enter into the joint venture with Sea Dragon? If so, on what basis? Explain....................5
REFERENCES................................................................................................................................................6

Determine the manufacturer's selling price in the Norwegian market for all billing sailboats for
the coming year.
Current Year Coming year
Number of sale
Average
price Revenue
Number
of sale
Average
price Revenue
B-16 240 29700 7128000 B-16 280 30500 8540000
B-29 0 0 0 B-29 40 202200 8088000
B-33 36 356000
1281600
0 B-33 45 365000
1642500
0
B-35 5 207900 1039500 B-35 7 213900 1497300
TOTA
L
2098350
0 372
3455030
0
From the previous year, there was an approximate increase in the selling units of 20% and
around 4% increase in the cost of the boats (Blanco-Portela and et. al., 2017) . As the cost of the
manufacturing of B-29 is not mention of the current and the previous years, it has been taken on
the basis of the inflation rate which is 3 or 4%. So, the price increases the next year’s cost is
approximately 3% or 4%.
The selling unit of B-29 is taken on the basis of B-33. According to the case, the sales units is 3
or 4% less than B-33. The average price of B-29 is taken on the basis of the information given in
the case that there is a minor difference in the features of b-29 and B-33. The B-29 has some of
the features less such as in height, length etc.
Determine the CIF prices in foreign currencies for the B-29 and B-33 to the importers in
Denmark, Sweden, Poland, Great Britain, Germany and Russia.
CIF prices of B-29
Countries Cost
(NOK)
Insurance
and
freight
CIF Exchange
Rate
conversion
into
domestic
Inflation
rate
Selling
price

currency
Denmark
280,
000 15500
29550
0 0.73 404795 3
416,9
38
Russia
280,
000 25000
30500
0 4.22 72275 25
90,3
44
Poland
280,
000 19000
29900
0 2.02 148020 28
189,4
65
Sweden
280,
000 12500
29250
0 0.73 400685 1
404,6
92
UK
280,
000 22500
30250
0 11.31 26746 3
27,5
49
Germany
280,
000 20500
30050
0 8.91 33726 2
34,4
01
CIF Prices of B-33
Countrie
s
Cost
(NOK)
Insurance
and
freight
CIF Exchange
Rate
conversion
into
domestic
currency
Inflation
rate
Selling
price
Denmark 369,000 15500
38450
0 0.73 526712 3
542,5
14
Russia 369,000 25000
39400
0 4.22 93365 25
116,7
06
Poland 369,000 19000
38800
0 2.02 192079 28
245,8
61
Sweden 369,000 12500
38150
0 0.73 522603 1
527,8
29
UK 369,000 22500
39150
0 11.31 34615 3
35,
654
Germany 369,000 20500
38950
0 8.91 43715 2
44,
589
In the above calculation, $280000 is taken hypothetically, by calculating the 20% FOB.