Essays on Break Even Analysis

The Annie Smith Dance Center 2

In the uploaded exel file there is a financial analysis of the Annie Smith Dance Center. I have analyzed the annual activity of this center and would like to show the results.

With the number of concerts that the center has today we have:

Profit = Revenues – Total Costs = 1 627 500-(765 000+253 000 +515 000) = - 94 500$

It means that the center incurs losses.

I have computed the break even point of number of performances for each type of dance. The results are on lists 2-5 in the exel file. I would like to say some words about the shortcomings of multi-product analysis. According to the Business Owner's Toolkit (2013), the main shortcoming is that ...

Introduction

Lego Group is a company that is well established in the tradition of and lengthy history of customer loyalty. This is a major consideration that in the last 10 years, the company has been faced with considerable difficulties including the ever present rise in prices of crude oil. From an analytical perspective, this is the major raw material for the manufacture of plastic bricks. This equally includes the persistent influx of low cost toys with the possible speculation in regard to the future forecasts of the company that are not all that optimistic. Therefore, the past strategy of the company within ...

Part One:

a) Calculate the Weighted Average Cost of Capital WACC: Weight of Debt* Cost of Debt(1-Tax rate) + Weight of Equity* Cost of Equity WACC:[( 200000/400000)* 0.09(1-.22)] + [(200000/400000)* .15] WACC: 0.0351+ .0300

WACC: 6.51%

*WACC that is also known as Cost of Capital will be used further to discount the cash flows of the company. b)Calculation of Capital Allowance and Tax Payable on each project:

Project A:

Tax depreciation Capital Allowance and tax liability *Assuming that business loss for Year 1 will not be carry-forward to be offset from Year 2 profit and also there is no minimum ...

Business Plan

- Introduction A prime land for development is located on Manse Road in Kinross, Milnathort in Scotland in the United Kingdom. This land is approximately 12.90. Prime land in this location is hard to find. This is because the locality is serene and away from the hustle and bustle of the metropolis, hence an attraction for wealthy people. As such, the property rates are always high. Nonetheless, the availability of this land for development presents a very good opportunity for commercial ventures. This business plan details the visualization of the business idea to be executed on this prime piece ...

Executive Summary

Mission Statement Genesis Entertainment is a modern entertainment business that focuses on exceptional rap music, merchandise, and entertainment normally overshadowed by the mainstream ideologies. The entertainment business aims to bring music joy to the individuals of all the ages, provide services, which exceeds customers’ expectations, and quality products at pocket friendly prices. What’s more, Genesis Entertainment aims to offer fair compensation to its members of staff and a fair return to the owner.

Goals

- Create a steady revenue stream from sales of the new album, ‘Genesis’, merchandising, digital sales, and live performances. - Establish and grow the corporation into a ...

Business Model

The following graph shows the company’s performance in terms of earning revenue and the profit. During the first two years, the company will incur a loss which will come down to its minimum by the end of second year. The loss will be pretty much as above $98,000 approximately but with the growth in revenue, it will come doen to just ocer $2,000 by the end of the second year. From the third year onwards, company will be earning solid returns with the profit for the fifth year amounting to approximately $93,000.

Break even analysis

The break even ...

Business Plan

- Abstract This document is presents a proposed five year financial model for ABC Energon, a business firm in the energy industry. The financial model through various statements will indicate how much cash will be required to start the business, an indication of projected expenses and revenues, source of funds for assets and operations and return on capital investment. - Background - Source of capital The initial capital for ABC Energon is projected to be at $ 750,000.00 which shall be raised through Bank loans, bank over drafts, trade discounts, retained earnings, shares, credit facilities and government ...

Cost-Volume-Profit (CVP) is an analysis tool that is used by managers to determine the effects of product costs and sales volume on profitability of a business. It is concerned with how changes in unit variable costs, fixed cost, selling price for each unit, activity level and sales mix affect profitability. A CVP analysis consists of a CVP statement of Income, margin of safety, break even analysis and projected income. This paper seeks to discuss the features of CVP and the reasons why managers are interested in break-even analysis. Lastly, it will compare contribution margin and fixed costs. There are five ...

Activity-based costing focuses on the activities on specific items and not the products of a given firm. In addition, activity-based costing effectively identifies specific activities within a firm whilst assigning the associated costs on the basis of the levels of consumption. Notably, activity-based costing is different from conventional costing on the basis that the former categorizes overheads as direct costs. Theoretically, Competition Bikers merger should not adopt activity based costing as a replacement of the conventional accounting system but as a complimentary or additional accounting system. This will help to transform the company’s accounting process into an authentic state. There may ...

- Scott Cook and Tom Proulx collected what is known as Primary Data. According to Professor Hossain from the website Spirkle Express Documents (2012), primary data, or raw data, is data that is collected through the process of investigation. Primary data is unfiltered and pertains directly to the field under investigation. In the course of their investigation, Scott and Tom became intimately aware of what their customers needed based on what is actually useful to them. Instead of creating a product that created a need, Scott and Tom created something that already is needed, that being personal finance management. I believe ...

The firm has to make an initial investment of purchasing new office equipment and computer to be able to develop apps for both phones and android. Assuming that the asset purchased will not depreciate over the next two years, the company is expected to make any purchase of additional assets. Since over the next two years there is no additional investment, the cash in hand and cash equivalent increases in the third year. Since the capital raised by the owner of the business is enough to meet the expense of the firm, the long term debt is expected to ...

CVP and break even analysis

Introduction

Entrepreneurs utilize cost volume profit analysis (CVP) to identify levels of business activities essential in limiting loses emanating from lack of adequate monitoring and evaluation of business performance. As such, CVP offers a viable option for use to give a reflection of the estimates amounting as variable costs. Also known as break even analysis, it specifically gives an overview of how profits fluctuate due to variation in sales price, fixed costs, variable costs and quantity off products or services.

Start-up costs $60, 000 to 184,000

Fixed operating expenses $4000 per month Lease equipment $2000 Break-even 300 members a) According to the Cost-volume-profit (CVP) analysis, ...

Introduction

Game4U is an establishing business organization that wants to promote the welfare of children in the society. This company has come up with a business strategy of inventing various ways in which children could be prevented from taking on drugs. It provides games’ equipments and material to children as a way of keeping them busy during their free time. Games are very important to the lives of children and in particular the youths as it prevent them from becoming obese and at the same time promote socialization among the youth. In summary games provided by Game4U prevent children from involving themselves ...

Break even analysis

The break even analysis method had been a slightly controversial issue about economics and management because many are debating whether it could indeed help a business survive in the long run or not. As a brief summary about what a break even or a break even analysis is, it could be considered as a point wherein a company or a corporation stays at a balanced level where there is no net loss or gain. When we say loss or gain, we mean profits and revenues.

So technically, when there is a break-even point, the outstanding costs and profits are supposed to be at the same level. The business should ...