FIN 305 Study Guide - Midterm Guide: Tax Advisor, Net Income, Earnings Before Interest And Taxes
30 Sep 2016
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Relevant info for key stakeholders" decisions: data is just data; it doesnt become info till it"s org. "d into some useful purpose. Looking at an income statement golden activewear inc. (is): Possible strat. "s for improving profitability within the blocks: Block 1 (sales, cost-of-sales, gross profit) : raise product prices, reduce product costs. Block 2: (operating expenses, operating income {ebitda}) : scale-up, reduce expenses, change business m. o. Block 3 (other expenses, income before taxes, net income) : scale-up (take advantage of operating leverage; aka economy of scale, reduce expenses. * scale-up means increase # of goods sold * Looking at block 3: first approach would be to scale-up, but lets look at reducing expenses: Often not super helpful in block 3 due to nature of these expenses. Ex. depreciation is a function of the sub-costs already incurred from acquiring long-term use resources; therefore can"t really reduce much.
