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Individual Portion of Group Project
Finance & Accounting
Pages 4 (1004 words)
<Student Name> <Name and Section # of course> <Instructor Name> <Date> Annual Report Project Question 2 2012 2011 Net Sales $14,197 $13,198 Net Income $961 $864 Question 6 K Question 10 2012 2011 2010 Account Receivables $1,454 $1,188 $1,190 Question14 2012 Basic EPS $2.68 Diluted EPS $2.67 Question 18 Cash provided by the Operations = $1,758 Question 22 a.
Year 2011 Profit Margin = (864 / 13,198) * 100 = 6.55% Question 29 a. Days in Inventory = (Average Inventory / COGS) * 365 b. Year 2012 Average Inventory = (1,365 + 1,174) / 2 = 1,269.5 Days in Inventory = (1,269.5 / 8,763) * 365 = 52.88 days c. Year 2011 Average Inventory = (1,174 + 1,056) / 2 = 1,115 Days in Inventory = (1,115 / 8,046) * 365 = 50.58 days Profit Margin Profit margin is one of the most important financial metrics that helps to evaluate the profit making ability of the company. It measures the capacity of the company to control its direct and indirect costs. The ratio is normally classified as a profitability ratio and calculated as: Profit Margin = (Net Income / Net Sales) * 100% Kellogg’s net profit margin improved in 2012 by 20 basis points. The company contributed 6.77c in 2012 as compared to 2.55c in 2011 to the net income for every unit dollar sales made. The improvement in the margin was due to the company ability to control its indirect expenses in 2012. The company was able to reduce its selling and administrative expenses by 100 basis points despite an increase in the sales figure. However, the increase in the net profit margin could have been higher if the company had been able to control the growth in the direct costs. ...
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