Morrissey Forgings

Group 7 Archit Shukla 12P011 Swapnil Sheth 12P046 Preetish Rao 12P094

1983 Income Stmt, Balance sheet, ROI

Income Statement Sales (30000 units) Cost of Goods Sold Gross Margin 1983 90,00,000 52,38,000 37,62,000

Selling Cost
Shipping Cost Sales Commissions General Expenses Profit Before Taxes\ Tax (@40%) PAT Balance Sheet Assets

12,50,000
10,00,000 4,50,000 4,90,000 5,72,000 2,28,800 3,43,200 1983 1,42,50,000

Factory Equipment
Trucks Working Capital ROI

1,00,00,000
20,00,000 22,50,000 2.41%

1985: Oven and Stove profits

Income Statement Sales COGS Gross Margin Selling Cost Shipping Cost Sales Commission Ovens 7000000 3867714.286 3132285.714 1388888.889 1666666.667 350000 Stoves Total 7500000 14500000 3982285.714 3517714.286 1736111.111 833333.3333 375000 7850000 6650000 3125000 2500000 725000

General Expenses
PBT

217777.7778
-491047.619

272222.2222
301047.619

490000
-190000

1986: Income Stmt

1986 Income statement Units SP per unit Sales Revenue Variable Overhead Fixed Overhead Gross Margin A&P cost Order Getting Cost Shipping Cost Sales Commission General Expenses PBT 30000 350 10500000 3720000 2403000 4377000 630000 2255000 1785000 525000 490000 -1308000

Shipping Costs
Shipping Cost Shipping Cost in 1985 Stoves sold in 1985 in core Ovens sold in 1985 in core Ovens sold in 1985 in non-core Shippig Cost in Core Particulars 2500000 25000 5000 78 1000000 Stove (units) Ovens(Units) Total Shipping Cost Per Unit shipping cost

Core
Non-Core

25000

5000
15000

1000000
1500000 1000000 833333

33.33333333
100 100

833333 33

166667 133

Order Getting costs

Stove selling cost per unit of core Total ordering cost in 1983 Stove units sold in 1983 Per unit odering cost in core Total ordering cost in 1985 in core area Total ordering cost in 1985 in non core area Per unit odering cost in non core 902000 30000 30.06667 902000 1353000 90.2

Break even analysis for ovens

Details Units Material Labor Variable Overhead VO per Unit Fixed Overhead Selling Price Per Unit Variable Cost Contribution margin Selling Cost Sellling Cost per Unit Shipping Cost General Expenses Sales Commissions Total Fixed Cost Contribution margin BEP Ovens 20,000 45 55 5,65,714 28 13,02,000 350 128 222 13,88,889 69 133 2,17,778 3,50,000 59,25,267 222 26,725

Recommendations
Move out of stoves
Declining market, reducing profits, similar products

Focus on ovens
First mover advantage Brand building Experience curve

Expand into core area

Established presence Good dealer network

Thank You

Appendix