Managing Financial Resources: Pricing Strategy and Financial Ratios

Managing financial resources
Assessment BRIEF 2

Table of Contents
Introduction......................................................................................................................................3
Question 1....................................................................................................................................3
Question 2....................................................................................................................................5
Question 3....................................................................................................................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
The following report focuses on managing financial resources. Financial resources refers to the
path through which company obtain the funds to run their business and date today expenses. This
report provides detailed information about profitability level of output of the company and it also
provides details about the pricing strategy of the company. Besides this cost plus approach is
being discussed in this report. This report speaks about various ratios such as current ratio quick
ratio debt equity ratio and proprietary ratio as well.
Question 1
Total units = 100
Price Units Total Amount
95 10 950
90 20 1800
80 30 2400
75 40 3000
60 50 3000
55 60 3300
50 70 3500
45 80 3600
40 90 3600
35 100 3500
Fixed cost of the business is 2500 a week
Variable cost is £20 on each unit
So the variable cost which is being imposed on the company is £20*100
=2000
So the company should take such prices from the customer where company can recover its cost.
In this case the marginal cost which is being provide on the company as 2,500 week. Only
increase profit when it says more units.