Managerial Economics



Managerial Economics

Managerial Economics代写 Whither Success:Why did the Management Accountant Argue that the Firm was Successful During the Past Month?


Whither Success  Managerial Economics代写

Why did the Management Accountant Argue that the Firm was Successful During the Past Month?

In the accounting perspective, the firm is successful as the accountants look at the revenue generated by the business in that one month. The firm made a gross revenue of $36,762 which is higher than the total cost of goods sold and expenses. Overall the firm makes a profit of $1,301 before taxation which is not a loss. However, if there was a comparison from the previous period. Then the argument could either be the firm has declined in performance. Or improving comparative to the profits made in the last few months.

Why did the Management Economist Argue that the Firm was not Successful During the Past Month and that it was in Quite Serious Trouble? 

Managerial Economics代写
Managerial Economics代写

The economist perspective looks at the cost and revenues and how they compare to the investment made in the firm. In essence, the economist does not only look at the revenue generated but the overall business activities ranging from amortization, expenses, costs of production and what these expenses can return to the business. It is based in the comparative rationality of the firm’s activities for that month, revenues, and the investment made. In this sense, the costs of goods take three-quarter of the total revenue leaving a small profit margin.

The company made a profit of $767.59 which cannot service the cost of capital of 797.16 which is 14% of the total equity. Thus, is the firm remains with a deficit of $29.57 to service the cost of capital. Therefore, on the face of it, the firm is made a profit by the net profit was only 13.5% return on the total equity invested. It leaves the company with no cash flow. Overall, the firm did not do well and is heading to serious trouble in the future.

Was the Firm, in Fact, Successful? Did it Add Value?  Managerial Economics代写

The question cannot be answered in isolation without considering the historical performance of the frim. The performance compared to the past and future determines the success of any firm. However, in this case, the firm was not successful. The success of the firm is not only measured using the net profits but also the assets of the firm. The question that needs to be asked is the ratio of the net profit to the assets give the return on asset ratio.

In this case, the ROA is likely to be very small indicating that the firm is not able to convert its investment in assets to profits. Also, also fail to service the cost of capital and lacks cash flow to meet its immediate expenses. The net profit realized is too low considering the cost of goods sold and the expenses incurred in the operations as well as the investment made.

Amcott Loses $3.5 Million; Manager Fired  Managerial Economics代写

Why Ralph Barnes was Fired

Barnes was fired merely because of operations loss of $3.5 million in the year-end 1996. Notably, he was fired not for the loss of the lawsuit and subsequent fine of $1.7 million that led to the loss but for loss of $1.8 million in other operating activities. Although Amcott foreign language division was performing well in 1993 and 1994. And perhaps it could have performed better in 1996 as per the manager’s projections. The company would still have made a loss from other divisions.

Wal-Mat Case Study  Managerial Economics代写

How did Wal-Mat Deal with the Profit-diluting Effects of Entry?

Wal-Mat performance and market leadership were strong to its innovative approaches to market competition. As the case provides that the industry to which Wal-Mat operated did not depend much on the brand name. The market profitability was created through managing costs and revenues. Therefore, to deal with the effect of entry, Wal-Mat continually innovated on the ways to reduce its overall operating costs compared to its competitors. While lowering prices of its products and hence making its products competitive.

For instance, when it introduced the “big box,” “everyday low price” and EDI most competitors imitated. To keep up with this entry, Wal-Mat came up with managerial innovation to train. And manage employees to cross-function in various sections in the stores. Which reduced the overall operating costs and establishment of stores in locations where no other retailers were ready to invest.

Is Profit Margin a Barrier of Entry?  Managerial Economics代写

In the retail industry, the profit margin is not a barrier to entry. Not a single firm has the power to set prices as the industry is competitive. When the firms are making higher profits, other firms join the market to share the profit as it happened to Wal-Mat in 1995. When it made innovations which created high revenues margins. The primary determiner of the profit margin is the operating costs. Which are dependent on the firm innovativeness to reduce them while reducing prices. In the retail industry, brand name does not have a significant role in the market than the value proposition to the customers through customer services and product prices.

How to Survive the Competition with Wal-Mat  Managerial Economics代写

The brand does not determine competition in the retail industry, but the customer service and product prices do. The only way to survive if Wal-Mat establishes stores in my town is to innovate to reduce operational cost, improve customer services, and lower products prices. Notably, as a small retailer, I need also to look for bargaining power with the suppliers for lower cost of supplies. Most importantly is to invest in information technology for barcode readers. EDI for suppliers, and wireless scanning guns for customers and inventory control. Also, I will restructure my store shelves for convenient with the customer shopping. I will make my small retail outlet to at per with Wal-Mat at almost all features except for branding and size.

Are there Social Consequences to Wal-Mart’s Behavior and Entry? 

Wal-Mart’s behavior affects customer shopping behavior. The strategy of availing its store’s remote rural areas and towns reduce the disposable consumer expenditure due to accessibility and proximity of the store anytime. Besides, charging lower prices has created consumer awareness of product prices even when buying from other retail stores. It has also set the pace for the customer services particularly on self-service and use or wireless scanning devices while shopping.

Managerial Economics代写
Managerial Economics代写

更多其他: 商科论文代写  cs论文代写 Review代写 Case study代写 Report代写 代写论文 学术代写 艾莎代写 研究论文代写 文学论文代写 心理学论文代写 哲学论文代写 人文社科代写 Essay代写 艺术论文代写 cs代写

合作平台:天才代写 幽灵代  写手招聘  paper代写