Scribd
Upload
13 views4 pages

Financial Analysis of Sales Cases

The document compares key financial metrics across a base case and three other cases (A, B, C) for a company. It analyzes contribution, bad debt costs, cash discounts, operating income, cost of carrying receivables, and residual income. Case A shows higher sales, contribution and operating income compared to the base case. Case B shows higher sales, contribution and operating income but also higher average collection period and proportion of credit sales. Case C shows lower sales but higher cash discounts and a lower average collection period.

Uploaded by

Srikanth Vasantada
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
13 views4 pages

Financial Analysis of Sales Cases

The document compares key financial metrics across a base case and three other cases (A, B, C) for a company. It analyzes contribution, bad debt costs, cash discounts, operating income, cost of carrying receivables, and residual income. Case A shows higher sales, contribution and operating income compared to the base case. Case B shows higher sales, contribution and operating income but also higher average collection period and proportion of credit sales. Case C shows lower sales but higher cash discounts and a lower average collection period.

Uploaded by

Srikanth Vasantada
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Sales

Average Cllection Period


Proprtion of credit Sales
% credit sales on cash discount
Cash discount term
Bad debt cost
Contribution Margin
Tax rate
Post tax cost of capital
Step 1 Contribution:
Contribution
Change in Contribution
Step 2 Bad debt
Bad debt cost
Change in Bad debt cost
Step 3 Cash Discount
Cash discounts
Change in Cash discounts
Step 4 Operating Income
Operating Income
Change in operating income
Net Operating Income
Change in net operating income
Step 4 Cost of carrying receivables
Investment in receivables
Cost of carrying receivables
Change in Cost of carrying receivables
Step 5 Residual Income
Residual Income
Change in residual income

Base Case
800
20
0.7
50%
1%
0
0.2
30%
12%

Case A
850
20
0.7
50%
1%
12%
0.2
30%
12%

160

170
10

6
6

2.8

2.98
0.18

157.2

161.03
3.825
112.72
2.68

110.04

24.55
2.95

26.08
3.13
0.18

107.09

109.59
2.49

Case B
840
50
0.8
50%
1%
0%
0.2
30%
12%

Case C
820
16
0.7
70%
2%
0
0.2
30%
12%

168
8

164
4

0
0

0
0

3.36
0.56

8.04
5.24

164.64
7.44
115.25
5.21

155.96
-1.236
109.17
-0.87

73.64
8.84
5.89

20.13
2.42
-0.53

106.41
-0.68

106.76
-0.33

Sales
Average Cllection Period
Proprtion of credit Sales
% credit sales on cash discount
Cash discount term
Bad debt cost
Contribution Margin
Tax rate
Post tax cost of capital
Step 1 Contribution:
Contribution
Change in Contribution
Step 2 Bad debt
Bad debt cost
Change in Bad debt cost
Step 3 Cash Discount
Cash discounts
Change in Cash discounts
Step 4 Operating Income
Operating Income
Change in operating income
Net Operating Income
Change in net operating income
Step 4 Cost of carrying receivables
Investment in receivables
Cost of carrying receivables
Change in Cost of carrying receivables
Step 5 Residual Income
Residual Income
Change in residual income

Base Case
800
20
0.7
50%
1%
0
0.2
30%
12%

Case A
850
20
0.7
50%
1%
12%
0.2
30%
12%

160

170
10

6
6

2.8

2.98
0.18

157.2

161.03
3.825
112.72
2.68

110.04

31.11
3.73

26.44
3.17
-0.56

106.31

109.54
3.24

Case B
840
50
0.8
50%
1%
0%
0.2
30%
12%

Case C
820
16
0.7
70%
2%
0
0.2
30%
12%

168
8

164
4

0
0

0
0

3.36
0.56

8.04
5.24

164.64
7.44
115.25
5.21

155.96
-1.236
109.17
-0.87

74.67
8.96
5.23

20.41
2.45
-1.28

106.29
-0.02

106.73
0.42

You might also like