Evaluate the profitability and sales, Financial Management

Assignment Help:

 a) Stockpiles refers to the accumulated (or excess level of) supply Ford motor vehicles, i.e. too much production given the level of demand. The purpose is to prevent possible shortages in supplies which could harm profitability and sales (although in Ford's case stockpiling is the result of poor stock control).

b) Poor stock control can mean either under-stocking or excessive stockpiling (or even a stock-out). There are drawbacks to both, as outline below:

Over-stocking

Under-stocking

Reduces Ford's liquidity position

Disgruntled and dissatisfied customers

Likely to hinder working capital since finance is tied up in stockpiles

Customers might switch to rival manufacturers' brands

Higher storage costs, e.g. insurance, maintenance and security

Compensation for failure to meet promised delivery dates

Possibility of some stock being damaged or even becoming obsolete (unlikely for cars, but their value could still depreciate)

Higher unit costs due to idle resources (which cost money but do not generate revenue)

 


Related Discussions:- Evaluate the profitability and sales

Cost-volume-profit models, Bennis Shafts produces three types of golf club ...

Bennis Shafts produces three types of golf club shafts which it sells to golf club manufacturers.  Prepare ONE worksheet to answer the following questions and to determine the outc

Capital asset pricing model, Cascade Water Company (CWC) currently has 30 0...

Cascade Water Company (CWC) currently has 30 000 shares of common stock outstanding, trading at a price of R42 per share. CWC also has 500 000 bonds outstanding that are currently

What are the time dimensions of the income statement, What are the time dim...

What are the time dimensions of the income statement, the balance sheet, and the statement of cash flows? Hint: Are they videos or still pictures?  Explain. Sol. The i

Explain the advantagesand disadvantages of mbo, Explain the Advantagesand d...

Explain the Advantagesand disadvantages of MBO Advantages of MBO Disadvantages of MBO Sale can be arranged quickly   Manag

Corporate debt instruments, Corporate debt instruments are the financ...

Corporate debt instruments are the financial obligations of a corporation having priority over the claims of the shareholders (equity or preferred) at the time of

Explain the term credit unions, Credit unions Credit unions are non-pro...

Credit unions Credit unions are non-profit institutions jointly organised and owned by their members (depositors). Their main objective is to satisfy the depository and lending

What is unsanctioned expenditure, Q. What is Unsanctioned Expenditure? ...

Q. What is Unsanctioned Expenditure? The expenditure, which is regularly incurred without the sanction of the competent authority or beyond the sanctioned limit of funds provid

Impact of the yield level in bonds, Different bonds trade at differen...

Different bonds trade at different yields though the coupon rate, maturity, and embedded options are same for them. Assuming that all the other bond characteristi

Explain foreign equity ownership restrictions, Explain foreign equity owner...

Explain foreign equity ownership restrictions. Why do you think countries entail these restrictions? Several countries restrict the maximum fractional ownership of local organiza

Describe factors to analyze a company position, Q. Describe Factors to Anal...

Q. Describe Factors to Analyze a Company position? - Venture capitalists may be involved in the business because of its significant growth but poorly structured finance. An equ

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd