Marcello's Ice Cream

MARCELLOS FAMOUS ICE CREAM (PTY) LIMITED 1. point 1: Analyse and Comment on the Financial wellness of the Firm 1.1 Income Statement The future(a) forms an analysis of the Income Statement of Marcellos known Ice-Cream ? ? gross revenue do been relatively flat year on year, with only a slight growth from 2004 2006. Therefore, Marcellos gibbosity of R2.5 million for 2006 is ambitious. He has grown at 3.8%, 3.7% and now he is looking for a 5% growth. New competitors mean he may hold in difficulty putting footing increases in. ? Cost of sales slang increased year on year, resulting in a diminish Gross make, and Gross Profit Percentage: yr end 2003 Sales Cost of Sales Gross Profit GP% 2210000 1768000 442000 20% course of instruction stop over 2004 2295000 1895000 436000 19% Year rest 2005 2380000 1952000 428000 18% ? ? His GP% is dropping, and is some lower than the intentness average of 20%. The decreasing GP impacts directly the b ottom stock of the firm. Expenses ? Marcellos put downs pose been increase year on year, importantly in the global and admin line expense. Marcellos depreciation expense is decreasing. Marcello mentions that his costs bemuse increased due to his fixed expenses termination up (salaries & wages) as mentioned in the case. The expenses includes interest paying.

Profit & revenue enhancement ? As a result of the increase expenses, Marcellos pay in the first place assess has been declining significantly from 2003 2005. This means that the absolute tax that is account payable is less, as the tax rate has stayed the same, at 50%. The industry norm for EAT is 3.5% and Marc ellos is 1.5%. ? No dividends were pai! d taboo in 2003, 2004, 2005, and retained earnings meet been steady declining: Year End 2003 Retained Earnings 85000 Year End 2004 57800 Year End 2005 33000 1.2 Balance Sheet Capital Employed ? The shares have remained constant over the time period, with a steadily increasing Retained Earnings figure. In turn, Total...If you want to get a full essay, order it on our website: OrderEssay.net

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