Question

#1 (Sales Analysis), page 276 Region 1 ($000) Region 2 (S000) Region 3 ($000) Region 4 ($000) Sales $8,100 $9,500 $8,500 $5,000 Sales Quota $8,250 $8,500 $8,150 $7,800 Sales Last Yr. $7,850 $8,750 $8,000 $4,850 Industry Sales $23,000 $25,000 $27,000 $21,000 #1 (page 276) Sales Analysis: Region Region 2 Region 3 Region 4 Effectiveness Index Sales Growth Market Share

Answer 1

Sales analysis

Effectiveness index is calculated as follows

Effectiveness index = sales ÷ sales quota ×100

Sales growth = difference between current year sales and previous year sales divided by previous year sales.

Market share is nothing but the sales divided by industry sales.

S.no	particulars	region 1	region2	region3	region 4
1	sales	8,100	9,500	8,500	5,000
2	sales quota	8,250	8,500	8,150	7,800
3	last year's sales	7,850	8,750	8,000	4,850
4	industry sales	23,000	25,000	27,000	21,000
5	effectiveness index (1) ÷(2)	98%	111%	104%	64%
6	sales growth [ (1) - (3)] ÷ 3 ×100	(8100-7850)÷7850×100= 3.18%	8.57%	6.25%	3.09%
7	market share (1)÷(4)×100	(8100÷23,000)×100= 35.22%	38%	31.48%	23.81%

ROAM analysis

Alternatively, Return on asset managed can also be calculated by multiplying profit contribution% and asset turnover ratio.

I ROAM Analysis Contract (8000) Industrial Suppliers C$000) Govt (8000) OEM (8000) V. Sales 79,434 01 25, 11001 2. COGS 52,059 114,826 3 Gross Margin 27,375 ___ 10,284 4. Direct selling Esp F 12,780 & 3,764 5 Profit contribution (4,595 6,520 6 Total Asset x 53156 33,680 422 286 136 44 9,200 6,739 2461 845 1,616 3,267 92 145 6520 1616 7. Profit Contribution - 14595 ☺0 x 100 79434 E X100 (318.37% xoo = 25.97% 9,200 1=17.57% = 21-80% Aset Turnover 79,434 25,110 422 9200 0: 33,680 145 53,156 1:49 3,267 = 2.82 = 0.75 -2.9) 516 6520 9. ROAMI (Return on Asset Managed 1455 Brofit Contribution 53,156 X100 Total Asset (576) X100 CO) = 27,46% 33,680X100 = 19:36% 145x100 = 63,45% 3267x100 = 49.46% 2 Scanned with CamScanner