Com 100 (101) Assignment 3 Fall 2022

1 Accounting

a) i) Use the Income Statement below to calculate the return on sales. Explain what this
means. Use the link ( https://www.readyratios.com/sec/ratio/ros/ ) to compare your result to
the industry standard. Say which industry you chose as the standard. What does your result
say about this firm? [3]

https://www.myaccountingcourse.com/financial-statements/images/income-statement-example.jpg

Return on sales is the way that company use to evaluate that how there can be maximum profit.
Return on sale profit is : 126.96%
Based on the result, I would like to comment that the company is going good in profit.

ii) Assume that the Guitar shop in the above Income statement has a starting inventory of
$65,000 and inventory of $23,000 at the end of the year. Calculate the inventory turnover
in days. Say what this means.
Inventory turnover days are 1575. This mean that the stock purchased by the company has been sold and
there is less lost of items.
b) i) What is non financial reporting?

The formal disclosure by the company for certain information that is non financial such as
environment or social governance.

ii) The SEC moving to make firms report on environmental sustainability. How does this
help protect investors and control greenwashing?
This will help a lot to the investors as they will be able to know that how much the
greenhouse gas exposure is there and they can even compare the different companies as
well before the investment.

c) Why might a firm want to make its profits look less than they actually are. Explain one way
that they might do this.

There are several reason and one could be, they don’t want to be in prosperous competitive
market where they need to lower the price of their product.

d) Give an example of an intangible asset. Why are these assets difficult to value?
All the assets that are not available in physical mode are intangible. For example, the shares
of the company, gold bonds, virtual land, cryptocurrency are intangible assets. Giving them
the value is difficult as we can not estimate their future by just holding them. For example,
the stock can any time comes to zero depends upon the market.

2 Operations management
a) What is mass customisation? What is its advantage and disadvantage compared to mass
production and customisation?

When it comes to the mass customization then it can be said that these things further involve
the production and the distribution of the goods and services which further customized for the
extensive basis and it further lead towards the notion which are able to produce as per the
need of the customer. There is no doubt that customer satisfaction is one of the most
important things for the mass production and this only happen because the charge the
premium for the production.

b) Explain what decisions a manager would have to make in capacity planning to respond to
economic growth.

In respond to the economic growth, every manage should make the decision related to the
capacity planning as this will not only identify the problem but also important for the
economic state as this will bring the technology, and this will further affect the production.
Moreover, the failure can also lead towards the decision which can even lower the profit of
the organisations.
c) Explain three things that a manager of a high contact service would have to consider in
choosing a location for a business.

The two major things that needs to be considered in term of making the selection of the
location is: Availability and Accessibility. They further make it sure that they choose such
kind of area where they can easily have the access of the network as well as this can consider
the area where the raw material is required for the production.

d) Explain with your own example, what is meant by a customer being involved in the
production process. What problems does this cause in providing the service and what is one
possible solution?

When it comes to the involvement of the consumer for the production of the process then it
can be said that it happens only when the mind state of the person seems motivated as well as
this also lead towards the specific product or place where purchase is important for the
specific services and their presence can be helpful to solve the problem as well.

e) In a PERT chart, what is a critical path and why is it important to know?

A critical path is a kind of longest sequence which comes in use for the scheduling of all the
projects and activities. The estimation of the time is being one with this.
f) Use this video to identify any two of the ways to reduce waste and apply it to an activity from
your own life
https://www.youtube.com/watch?v=c2nBKRKKWXk

There are several ways which can be used to avoid the waste and one of them is over
production as this will help to reduce the waste amount and lead towards only the necessary
motion.

References
Angelo, M (n.d.). Tips on Choosing The Right Location for Your Business. Retrieved from
https://www.businessnewsdaily.com/15760-choosing-business-location.html
Hayes, A. (2022, March 28). Return on Sales: What ROS Is and the Formula To Calculate It.
Retrieved from https://www.investopedia.com/terms/r/ros.asp#:~:text=Return%20on
%20sales%20(ROS)%20is%20a%20measure%20of%20how%20efficiently,of
%20roughly%20the%20same%20size.
Maslow, S.A. (2021, May 26). Non-Financial Reporting and the Model Contract Clauses,
Version 2.0. Retrieved from
https://www.americanbar.org/groups/business_law/publications/blt/2021/06/non-
financial-reporting/#:~:text=Non%2Dfinancial%20reporting%20is
%20a,sustainability%20to%20the%20next%20level.
Maverick, J.V. (2021, June 28). Is It More Important for a Company to Lower Costs or
Increase Revenue?. Retrieved from
https://www.investopedia.com/ask/answers/122214/company-it-more-important-
lower-costs-or-increase-revenue.asp
What are intangible assets and how do you value them? (2020, July 2). Retrieved from
https://www.brex.com/blog/intangible-assets/