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  • A1 Strategic Profit Model

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    Mia Jacobson
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    This document presents a strategic profit model for a company. It shows the company's original sales of $5 million, costs of goods sold of $3.8 million, and other costs of $800,000, resulting in a gross margin of $1.2 million and net income of $400,000. It then models an increase in sales to $6.437 million which leads to a $115,000 increase in profit, a 2.96% increase in return on investment, and a 2.3% increase in profit margin.

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    This document presents a strategic profit model for a company. It shows the company's original sales of $5 million, costs of goods sold of $3.8 million, and other costs of $800,000, resulting in a gross margin of $1.2 million and net income of $400,000. It then models an increase in sales to $6.437 million which leads to a $115,000 increase in profit, a 2.96% increase in return on investment, and a 2.3% increase in profit margin.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    15 views5 pages

    A1 Strategic Profit Model

    Uploaded by

    Mia Jacobson
    This document presents a strategic profit model for a company. It shows the company's original sales of $5 million, costs of goods sold of $3.8 million, and other costs of $800,000, resulting in a gross margin of $1.2 million and net income of $400,000. It then models an increase in sales to $6.437 million which leads to a $115,000 increase in profit, a 2.96% increase in return on investment, and a 2.3% increase in profit margin.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 5

    By:

    Labor Sales
    $700,000 $5,000,000
    $700,000

    Materials COGS
    $2,300,000 $3,800,000
    $2,185,000

    Overhead
    $800,000 Logistics Costs
    $800,000 $0

    Other Costs
    $800,000

    Inventory
    $500,000

    Acct Receivable
    $300,000

    Cash
    $300,000

    Question 2
    Impact on ROI 2.96% Increase
    Imact on Porfit Margin 2.30% Increase
    Impact on Profit $115,000 Increase

    Question 3
    Profit Margin 8%
    Net Income $515,000
    New Sales $6,437,500
    Increase in Sales $1,437,500
    Strategic Profit Model

    $5,000,000 Gross Margin


    $1,200,000
    $1,315,000

    $3,685,000

    $0 Total Other Costs


    $800,000
    $800,000

    $800,000

    $475,000 Current Assets


    $1,100,000
    Receivable $1,075,000

    $300,000 Fixed Assets


    $2,900,000
    $2,900,000

    $300,000
    it Model

    Net Income
    $400,000
    $515,000 Profit Margin
    8%
    Sales 10.30%
    $5,000,000
    $5,000,000

    Sales
    $5,000,000
    $5,000,000 Asset Turn Over
    125%
    Total Assets 126%
    $4,000,000
    $3,975,000
    Return on Investment
    10%
    12.96%

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