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Finance For Sales Managers (Doc)

   

Added on  2019-09-26

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Running Head: Finance For Sales ManagersFINANCE FOR SALES MANAGERS
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Finance For Sales Managers2Table of ContentsTASK 1: LO1..................................................................................................................................4AC 1.1 Calculation of gross profit margin...................................................................................4AC 1.2 Calculation of net profit ratio..........................................................................................4AC 1.3 Explanation on the difference between margin and mark-up..........................................5AC 1.4 Calculation of return on capital employed (ROCE)........................................................5TASK 2: LO2..................................................................................................................................7AC 2.1 Identification of sales expenditure budget setting method..............................................7AC 2.2 Establishment of information needs and source to set sales budget................................7AC 2.3 Description of different approaches used in setting sales budget....................................7AC 2.4 Budget frameworks.........................................................................................................8AC 2.5 Contingency plan in relation to a budget.........................................................................8TASK 3: LO3..................................................................................................................................9AC 3.1 Use of budget...................................................................................................................9AC 3.2 Budget variance...............................................................................................................9AC 3.3 Implementation of actions to deal with budget variance...............................................10AC 3.4 Explanation on the way of providing performance related information against salesbudget.........................................................................................................................................11AC 3.5 Way of monitoring sales budget for identifying potential fraud or unethical practices11TASK 4: LO4................................................................................................................................12AC 4.1 Need of a bonus system.................................................................................................12AC 4.2 Selection of bonus options for members of sales team.................................................12AC 4.3 Bonus setting methods...................................................................................................12AC 4.4 Cost of bonus calculation..............................................................................................13
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Finance For Sales Managers3AC 4.5 Negotiation of bonus with the members of sales team..................................................13AC 4.6 Evaluation of effective bonus system............................................................................13TASK 5: LO5................................................................................................................................14AC 5.1 Organisational policy regarding credit agreement with the customers.........................14AC 5.2 Process of granting credit..............................................................................................14AC 5.3 Procedure of checking...................................................................................................14Reference List:...............................................................................................................................15
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Finance For Sales Managers4TASK 1: LO1AC 1.1 Calculation of gross profit margin Gross profit = Sales – Cost of Sales = £(4.21 - 3.43) million = £0.78 millionGross profit margin = 100% * (Gross Profit / Revenue) = 100% * (0.78 / 4.21) = 18.5%Margin of profit can never stand more than 100%. Gross profit margin always stands less than 100% because it is a percentage of earning made by a company on its total sales revenue.If VAT excluding selling price of a products is £75 and it is sold at a margin of 20% then the unit cost of sales will be –Unit cost = £75 + £ (75*20%) = £75 + £15 = £90If the organisation increase sale price of the product and the mark-up remains unchanged then the profit margin per unit as well as total will increase.If cost of sales increases then grosses profit earning will reduce.AC 1.2 Calculation of net profit ratio Gross profit achieved by SalesRUs for the year = £(560,000 – 220,000) = £340,000
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