Fin621 GDB No. 3 solution
Monday, July 04, 2011 Posted In Fin Edit ThisSemester “Spring 2011”“Financial Statement analysis(FIN621)”
This is to inform that next Graded Discussion Board (GDB)will be opened according to the following schedule
Schedule
Opening Date and Time June 30 , 2011 At 12:01 A.M. (Mid-Night)
Closing Date and Time July 04 , 2011 At 11:59 P.M. (Mid-Night)
Topic/Area for Discussion“
Profitability of a business”Note: The discussion question will be from the area/topic mentioned above. So start learning about the topic now.
SOLUTION:
Following are possible ways to increase the gross profit
->An increase in selling price without corresponding increase in costs
->A decrease in costs without corresponding reduction in selling price
->Opening stock in trade is valued at a figure lower than should have been
->Purchases are stated at a lower figure than it should have been because of omission of invoices for purchases
->Sales figures are inflated because goods sent on consignments may have been inadvertently included
->Closing stock is valued at a higher figure than it should have been.
->An increase in selling price without corresponding increase in costs
->A decrease in costs without corresponding reduction in selling price
->Opening stock in trade is valued at a figure lower than should have been
->Purchases are stated at a lower figure than it should have been because of omission of invoices for purchases
->Sales figures are inflated because goods sent on consignments may have been inadvertently included
->Closing stock is valued at a higher figure than it should have been.
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Following are possible ways to increase the gross profit
1. An increase in selling price without corresponding increase in costs
2. A decrease in costs without corresponding reduction in selling price
3. A decrease in direct costs
4. Increase in sales volume by reducing price, if it result in extra sales
5. Advertisement if it results in increased sales
1. An increase in selling price without corresponding increase in costs
2. A decrease in costs without corresponding reduction in selling price
3. A decrease in direct costs
4. Increase in sales volume by reducing price, if it result in extra sales
5. Advertisement if it results in increased sales
