Financial Analysis of Company: Detailed Performance Analysis Report

This report presents a financial analysis of a company, evaluating its performance based on sales, costs, and profitability. The analysis includes the calculation of break-even points under various scenarios for different product lines, such as Squid, Proud, Stash, and Private Zoo. It computes net profits for the year 2017 and assesses safety margins to determine the financial stability of the company. Furthermore, the report examines the impact of changes in manufacturing variable costs and sales variable costs on the company's financial outcomes, providing a detailed breakdown of sales, costs, and profit margins under these altered conditions. References from academic sources support the calculations and findings.

RUNNING HEAD: Financial analysis of company
1
Name of the student-
Topic-
University name

Financial analysis of company
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Table of Contents
Answer to question no-1.......................................................................................................................1
Answer to the question no-2.................................................................................................................2
Answer to the question no-3.................................................................................................................3
Answer to the question-4......................................................................................................................4
References.............................................................................................................................................8
.

Financial analysis of company
3
Answer to question no-1
In this report, break even points under various circumstances have been analysed
Computation of the net profit for the year 2017
Particular Squid
Proud
Stash
Private
Zoo
Total
sales
Units sales 4500 4500 6000 15000
Unit sales price 64 78 125
Total sales
AUD$
288000
AUD$
351000
AUD$
750000
AUD$
1389000
Total variable cost
units 52 64 97
Total variable cost
units 234000 288000 582000 1104000
Contribution 54000 63000 168000 285000
Contribution per
units 12 14 28 19
PV ratio 12 14 28 19

Financial analysis of company
4
Fixed cost 45000 45000 60000 150000
Selling and admin
cost 36000 36000 48000 120000
Total fixed cost
AUD$
81000
AUD$
81000
1 AUD$
08000
AUD$
270000
Net profit
AUD$ -
27000
AUD$ -
18000
AUD$
60000
AUD$
15000
(Hatch, et al. 2017).
Answer to the question no-2
Break even points- It is the point of sales at which company will earn no profit no loss. This
computation has been made to evaluate these three points (Brigham & Ehrhardt, 2013).
Computation of the break even points in the year 2017 (Palia, 2014).
Computation of the Breakeven point
Name of the process
Squi
d
Proud
Stash
Private
Zoo
Total
sales
Break even points 6750 5785.71429 3857.1429 14210.526

Financial analysis of company
5
Answer to the question no-3
Safety margin- It is the intrinsic value of stock and its market price. This point is the
difference between the total sales and break-even point of the business (Diggle, 2013).
Computation of the Safety margin
Name of the
process
Squi
d
Proud
Stash
Private
Zoo Total sales
Safety margin 0 0
2142.85714
3
789.473684
2
Safety margin in dollars
Safety margin *contribution per units
(Palia, 2014).
Computation of the Safety margin
Name of the process
Squi
d
Proud
Stash
Private
Zoo
Total
sales

Financial analysis of company
6
Safety margin in
dollars 0 0
AUD$
60000
AUD$
60000
Answer to the question-4
When there is change in manufacturing variable cost and other changes (Lee, et al. 2017).
Particular Squid Proud Stash Private Zoo Total sales
Units sales 4500 4500 6000 15000
New sales units 4500 4500 27000 36000
Unit sales price 64 78 125
Total sales
AUD
2,88,000.00
AUD
3,51,000.00
AUD
33,75,000.00
AUD
40,14,000.00
Manufacturing cost 40 48 75
Sales variable cost 12 16 22
Total variable cost
units 40 48 75

Financial analysis of company
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Increased variable
cost 50 60 93.75
Increased sales cost 15 19 25
New total variable
cost 65 79 118.75
Total variable cost
AUD
2,92,500.00
AUD
3,55,500.00
AUD
7,12,500.00
AUD
13,60,500.00
Contribution -4500 -4500 2662500 2653500
Contribution per
units -1 -1 6.25 4.25
PV ratio 13 -1 443.75 176.9
Fixed cost
AUD
18,750.00
AUD
18,750.00
AUD
1,12,500.00
AUD
1,50,000.00
Selling and admin
cost
AUD
15,000.00
AUD
15,000.00 AUD 48,000.00
AUD
1,20,000.00
Total fixed cost AUD AUD AUD AUD

Financial analysis of company
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33,750.00 33,750.00 1,60,500.00 2,28,000.00
Net profit
-AUD
33,685.00
-AUD
38,250.00
AUD
25,02,000.00
AUD
23,83,500.00
Computation of Breakeven points
Computation of the Break-even point
Name of the
process Squid Proud Stash Private Zoo Total sales
Break even points 2596.153846 -33750 361.6901408 1288.863765
Computation of Safety margin in units
(Petty, et al. 2015).
Computation of the Safety Margin in units
Name of the process Squid Proud Stash Private Zoo Total sales
Safety margin 0 0 5638.309859 13711.13624

Financial analysis of company
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Computation of Safety margin in dollars
Computation of the Safety margin in dollars
Name of the process Squid Proud Stash Private Zoo Total sales
Safety margin in Dollars 0 0 35239.43662 58272.329