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Research Paper, Essay on Business, Projected Profits
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Essay/Term paper: Projected profitsEssay, term paper, research paper: Business
Met North Energy Corporation
4 Year Net Profit Projections
The current budget figures for the four year period 1996 - 1999 show a steady decrease in profits eventually resulting in a loss during the fourth year. The graph shows the decrease in net profit while gross profit remains virtually static and expenses increase. After an initial loss during the first year the figures indicate a healthy profit at the end of the period.
The figures in this graph from the spreadsheet clearly show the long term benefits gained by the additional $50,000 when it is added to the 1996 advertising budget.
Despite a loss of $10,000 in the first year the projected profit for the 4 year period is $160,500.
The results of the spreadsheet showing both budget options can be reduced to just one simple graph. This supported by market research would convince management as to which option to choose.
Met North Energy Corporation
Net Profit Projections
Year 1996 1997 1998 1999
Sales $450,000 $455,000 $455,000 $460,000
Projected Sales $450,000 $523,250 $523,250 $529,000
Cost of Goods Sold $180,000 $185,000 $180,000 $185,000
Projected Cost $180,000 $203,500 $198,000 $203,500
Gross Profit $270,000 $270,000 $275,000 $275,000
Projected Gross Profit $270,000 $319,750 $325,250 $325,500
Less Expenses:
Salaries $80,000 $90,000 $100,000 $110,000
Advertising $50,000 $50,000 $50,000 $50,000
Increase in Advertising / 1996 $100,000 $50,000 $50,000 $50,000
Interest $60,000 $60,000 $60,000 $60,000
Depreciation $40,000 $50,000 $55,000 $65,000
Total Expenses $230,000 $250,000 $265,000 $285,000
Projected Expenses $280,000 $250,000 $265,000 $285,000
Net Profit $40,000 $20,000 $10,000 -$10,000
Projected Net Profit -$10,000 $69,750 $60,250 $40,500
Increase in profit $160,500
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