Financial and Sales Analysis of Hewlett Packard

Added on - 01 Oct 2019

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HEWLETT-PACKARDFinancial analysisFinancial and sales analysisName of the author-[Type the abstract of the document here. The abstract is typically a short summary of thecontents of the document. Type the abstract of the document here. The abstract is typicallya short summary of the contents of the document.]
Table of ContentsTask 1: Prepare a training workbook for members of the sales team........................................2An explanation of the following concepts......................................................................2Using 2 made up sales volume numbers (simple) and 2 existing customers’ salesvolumenumbers calculate;..........................................................................................................2An assessment of the potential variable costs that could impact on the profitability ofaccounts......................................................................................................................................3A description of your organisation’s management accounting procedures for dealingwith the following costs;............................................................................................................4An evaluation of these costs and why these methods are used.......................................4Provide a step by step analysis of a customer account for profitability and how you canuse it for on-going measurement of customer performance.......................................................4Task 2: Prepare a financial analysis report................................................................................6A consideration of the value of each customer to the organisation................................6Recommendations on what action to take in terms of growing these customers............6An evaluation of the business and financial risks associated with each account............6An identification of any key trends or variances............................................................7Where you would expect to look for financial data on these accounts (inside andoutside your organisation)..........................................................................................................7An identification of who else in your organisation would have a stake in the financialviability and performance of these accounts and how you would ensure appropriate access tothe data.......................................................................................................................................8
A provision of any proformas for capturing performance and financial data about theseaccounts and the development of contingency plans for possible problems that may arise withthe financial performance of the accounts.................................................................................8REFERENCES...........................................................................................................................8
Task 1: Prepare a training workbook for members of the sales teamAn explanation of the following conceptsoTARGET PROFITABILITY:target profitability refers to the level of earnings in form ofprofit that the managers have budgeted to achieve for a given time frame. The targetprofitability is computed as a part of budget and this figure is used to make a comparisonwith the actual result that the company achieves at the end of the set time frame (Wildavsky,2017). With the comparison, the managers can identify the variances and take decisions inthat line to improve profitability (Bogsnes, 2016).oLIFE TIME VALUE CASH FLOW:lifetime value of cash flow helps in computing anamount that is attributed by computing the present value from the specific cash flows. Thesecash flows relate to the amounts generated from the relationship that has been maintainedwith a customer over the entire life of the business with that customer (Nenonen, &Storbacka,2016). The life time value cash flow helps in making significant decisions that relate tomarketing, customer support system, product development and sales.The formula to compute the life time value cash flow is:(Shah, Kumar, Kim, &Choi, 2017).oVARIABLE COSTS:variable costs depict the expenses incurred in business that vary withthe level of production in the business. These costs are not fixed and are dependent certainlyupon the production. They happen only when the production is in line. With the rise inproduction, variable costs rise, and with the fall in production level, the variable costs fall.Certain examples of variable costs are packaging costs, customer discounts, delivery costs,and etc. (Kaplan, & Atkinson, 2015)oFIXED COSTS:fixed costs occur irrespective of whether there is production in business ornot. The fixed costs are certain to incur. Even if the production is zero, these costs are fixed ata certain amount. Similarly if the production is highest then too these costs remain same.Certain examples involve wages, rent, interest charge of bank, electricity charges, and etc.(Gu, Simunic, & Stein, 2017)
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