Problem: Complete Ramsey Walker's profit plan for the children's book line. What are your work assumptions: which of these assumptions are critical to your analysis?

Work assumption:

1.          take away that the sales will increase by 10% for to each one raw title, as indicated the Backlist sales increase.

2.         Assume that the total number of new titles remain unchanged; since Ramsey is onerous to publish fewer segments and focus more resources on assay to publish fewer segments and focus more resources on preeminence those books in the marketplace, there is no reason for him increase the new titles.

3.         Assume that they plan to increase their gross margin by 2% and slack the expenses of sales by 1%, for each of the six formats, as given for Backlist.

4.         Assume that AR as the percentage of sales remains 20%, as indicated by Backlist.

5.         Assume that inventory as the percentage of sales decrease by 15%, as indicated by Backlist.

6.         Assume that AP as the percentage of sales will stretch to 20%, as the last year percentage for the first five formats is 18%.

The 10% increase in sales, 2% increase in GM and 1% decrease in expenses should be slender since it will increase the profit dramatically. And the decrease in inventory is also critical because it will decrease the lower factor of the ROA formula. Since the overall goal of the profit plan is to achieve the 10% increase in ROA, so the above assumptions will directly affect the end results.

Problem 2: Review the list of pecuniary performance measure presented above. What measures or calculations should Ramsey use to manage the bloodline? How should those measures be calculated?

1.         Annual sales growth value should be used to measure their performance because this rate helps charge to evaluate the quality of their decisions and also helps to make the new scheme for the future development. It is calculated by suing the difference between flowing year...

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