from Lease payments 8. Use the following information to analyze the financial in

Question

from Lease payments 8. Use the following information to analyze the financial information and inputs and outputs of the organization 2015 to 2016: Financial Information Net sales Cost of goods sold (purchased items) Net income after taxes Current assets Current liabilities Average inventory value Inputs and Outputs Units produced Labor costs Lease payments Energy costs 2016 Results $1,416,400 $681,000 $34,800 $841,000 $679,000 $312,000 2015 Results $1,372,000 $622,000 $29,400 $822,000 $628,000 $288,500 22,000 $228,200 $24,000 $18,300 24,870 $242,000 $26,500 $18,900

Explanation / Answer

Financial Performance: =       

Net profit margin = $29400/$1372000 = 0.021(2015);     34800/1416400 = 0.025(2016)

Current ratio = $822,000/$628,000 = 1.31(2015);             841000/679000 = 1.24(2016)

Inventory turnover = $622,000/$288,500 = 2.16(2015);    681000/312000 = 2.18(2016)

Single-Factor Productivities:-

Labor--22,000/228,200=0.096 units/labor$ (2015);      24870/242000=0.103units/labor$(2016)

Material--22,000/622,000=0.035units/mat’l$(2015);   24870/681000=0.037units/mat’l$(2016)

Lease--22,000/24,000=0.917units/lease$(2015);        24870/26500=0.938units/lease$(2016)

Energy—22,000/18,300=1.202units/energy$(2015);     24870/18900=1.316units/energy$(2016)

Multiple-Factor Productivity:=

22,000/[228,200+622,000+24,000+18300]=0.025units/$(2015); and

24870/968400=0.026units/$(2016).

Productivity Growth: -

Labor—(0.103-0.096)/0.096 = 7.3%

Material—(0.037-0.035)/0.035 = 5.7%

Lease—(0.938-0.917)/0.917 = 2.3%

Energy—(1.316-1.202)/1.202 = 9.5%

Multiple factor—(0.026-0.025)/0.025 = 4%

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