# Financial Management for Sales Managers

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Finance for Sales ManagersStudent Name: Student ID: Course Name: Course ID:Faculty Name: University Name:
Task 1: Training NotesThe calculation of gross profit margin is done using the formula below:Gross Profit Margin = (Sales – Cost of Goods Sold)/SalesCompany name (2016)Gross Profit Margin (%)Apple39.40Walmart24.6Coca-Cola60.43These results show that the company has these percentages of revenues left with them after the removal of all the direct costs (Kaplan and Atkinson, 2015). The left over amount can now be utilized in other areas such as operating expenses, paying dividends.Net profit ratio is calculated using following formula:Net Profit Margins = Net Profits after Taxes/SalesThe Apples NPM was 19.24% in the third quarter of 2016. It shows the financial health of the company. The 19.24% profit margin shows that the company earns 19.24 cents on every dollar it collects. For amazon it was 2.57% and for Coca-cola it was 9.84%.Return on capital employed is calculated using following formula:ROCE = Earnings before Interest Tax (EBIT)/Capital EmployedIt shows the efficiency with which the capital is employed.Company Name (2016)ROCE (%)Apple4.73Amazon2.06Coca-Cola23.42
Margin refers to difference between the sales and cost of goods sold, and markup is the increase in the price of the product to get selling price. Margin should be used for prices change over time and margin is for instant.Task 2: Effectiveness of Budget Setting and ManagementSome of the options available for budget setting are percentage method, goal-and-task method, competitor based method, zero method and others. The method that is used in my organization is the goal and task method. In this, the estimation is done based on what is to beachieved and the current costing available for them (McDonald, 2016). This method is suitable as it is practical and considers the market rates and present situation rather than hypothetical situations. This helps set contingencies for expected future risks. The common variance causes are delay in completion, price increase of collaterals, and others. These variances can be managed by keeping contingencies. The budget setting and management helps pre-define the amount to be invested which sets the premise for performance and keeps things on track. The performance information can be provided to others through formal reportdevelopment and dissemination or through regular mail delivery to the concerned parties. Theactual investment can be tracked constantly with the estimated budget to track any major deviation.Task 3: Bonuses for the Current Sales ForceThe sales bonus system is used to ensure that the sales staffs stay motivated towards achieving their target. This system is best suited for the individuals who get motivated by the monetary awards; however for the rest this makes limited sense. The common method of setting bonuses are straight salary, salary plus bonus, base plus compensation, straight

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