ipl-logo

Laramie Wire Manufacturing Essay

636 Words3 Pages

Case 8.1 Laramie Wire Manufacturing The auditor’s first duty at the beginning of the auditing process is to learn the way a company functions. During this process the auditor will gain an understanding of the company’s set-up, and he or she can compare this to other companies within the same industry. Laramie is in business to process products for the marketplace; therefore, the auditor needs to establish is the process in place is working well. The time the company takes to change machine set-up from special order, industrial and residential products averages around six hours. This is under the industry average so there is not an area of concern. The auditor must next look into the sale accounts for Laramie. In 2005 the sales and the cost of goods sold (COGS) for Laramie have risen. The sales went up by 3% while the COGS went up 2%. Because the market prices fell over this period the difference of 1% from sales to COGS, the gain seems to be accurate. …show more content…

There is a concern with the increase of plastic and copper inventory, and this concern is, is there a market for these products. The company may have problems selling such a large stockpile of plastic and copper in their inventory. It is important to check into whether Laramie has an existing order for product or if they anticipate a rise in demand and why they believe this. It is also possible that Laramie expects a future rise in the cost of raw materials and has purchased materials ahead to avoid paying more for their materials. The auditor needs to look into these

Show More
Related
3256 Words | 14 Pages

I have written a short evaluation of each ratio listed after each ratio explaining if the average of the ratios over the previous four years are relatively good or relatively bad. The first significant trend that I noticed was found within the inventory turnover ratio. I noticed that within the past four years the ratios have stayed fairly consistent. Casey’s inventory turnover ratio is fairly high which exhibits that they are not having trouble selling their products. In fact, they sell and replenish at a high rate.

Read More
438 Words | 2 Pages

The calculation on inventory turnover shows that Pamplin Inc. is moving its inventory more slowly than the industry. This suggests that Pamplin Inc.’s inventory is less liquid than its competitors. The days in receivable ratio demonstrates that Pamplin Inc. is significantly slower at collecting its

Read More
1521 Words | 7 Pages

Gross profit increased from $4,934 (2015) to $5,064 (2016) % of net sales is relatively flat due to increased occupancy costs such as rent 35% (2015) v. 34.9% (2016) Increase in gross profit is offset by an increase in cost of sales in related buying and occupancy costs Credit card revenues, net decreased from $342 (2015) to $259 (2016) Finance charge revenue decreased from $173 (2015) to $6 (2016) Finance charges: interest earned on unpaid balances Nearly quadrupled credit program revenues from 2015 to 2016 ($64 to $246) Huge increase in net credit program revenues from 2015 to 2016 ($64 to $246) is offset by a vast decrease in finance charge

Read More
492 Words | 2 Pages

In the income statement can be show the sales revenue of the company to be of $ 60,221.40. In order to obtain current ratio, we divide current assets by current liabilities (62,022.40/7,630.00= 8.13). Our company believe that one of the biggest strength is the demand of hypoallergic items. The weakness of Peyton Approved is that the profit margin is 99.73%. Analysis and

Read More
1748 Words | 7 Pages

Income Statement In the Income Statement sales decreased from 2014 to 2015 due to an issue with Lowes. Lowes had a delay in store openings due to construction delays by 1 year that delayed the shipment of products to those locations for the same time period. As such, $15MM in sales that would have been reported for sales in 2015 were instead recorded in 2016 and so inflated Sales Growth% and Gross Margin % for 2015-2016. And so analysis will be done both on the Midwest provided historical financials and also analyst adjusted historical financials with an additional $15MM in sales for 2015, and $15MM less sales in 2016.

Read More
1835 Words | 8 Pages

The company employees eight full and five part time employees, which consist of the management team, sales, shipping and manufacturing. The company’s main focus is the sale of non-corrosion protection products used in the oil industry, and they do manufacture non corrosive

Read More
894 Words | 4 Pages

The company experienced fluctuation in inventory, moving from 124 days in 1988 to 97 days in 1989 and going up again to 114 days in 1990 and down again to 110 in 1991. While the company in overall is experiencing tremendous sales growth, each store basically controls its own inventory regardless of the other stores, and that makes the overall inventory uncontrollable. Fixed Asset Turnover has been in great shape during those years, it moved from 36.5 in 1988 to 50.8 in 1989, and then from 42.1 in 1990 to 47.5 in 1991. The FAT in 1990 because the company acquired a lot of investments such as goodwill and PPE. The managers are paid based on net profits.

Read More
2453 Words | 10 Pages

BMI managed to sell and restock its inventory 3.89 times during the year, and their inventory set on the shelf ninety four days they have room for improvement. The competitor managed its inventories better than BMI selling and restocking 4.18 times during the year while their inventory only sat on the shelf eighty seven days. As of 12/31/12 BMI’s assets were invested in: Current assets 40.2%; Other Assets; 35.6% and depreciation 24.2%. Therefore, the total asset turnover is greatly affected by both current asset turnover ratios and the turnover of other

Read More
424 Words | 2 Pages

being successful in its total sales, it has faced certain challenges. The first major challenge that the company witnessed was inherent with the process lines. Currently, the company uses Brayford Corp. Brayford deals mainly with the equipment manufacturing; however, the line installed is prone to breakages and quality levels are questionable. In this case, the company has been grappling with the question on whether it needs to replace the line or commission it with a useful one, the Bi-Line 8.

Read More
555 Words | 3 Pages

Now, having taken a look at this information, the stockholders’ equity actually greater than in the following 2 years, which is a little confusing because even when the company has had more sales, it has had greater liabilities as well, this can be due to different factors, such as bills to pay, new policies, and probably salaries, which I would consider the first major reason of this results because in the last 2 years the government has raised the minimum wage annually, and despite the fact that the company has raised its prices, it is not a secret that tend to watch more carefully its

Read More
881 Words | 4 Pages

In chapter 7 we read about a Barbeque company. Management decided to use an income statement to determine the profitability of continuing to sell charcoal grills. In the analysis we take into account the fixed costs and direct costs of carrying charcoal grills. In the end we can see that the company should not eliminate charcoal grills. The analysis for product line takes into account many factors.

Read More
434 Words | 2 Pages

Operating income to sales ratio had decreased by 19.3% over the past five years. The company do not spend much on the interest, which is a good sign for them. Specially a company which has been established long back and after years of operation lower interest expanse is as expected. finally, the increase in operating expanse has impacted the EBT and Net Income. Both have seen a decline in last three years.

Read More
1452 Words | 6 Pages

The expenses percentage increased from 51% in 2013 to 56% in 2014, meaning for every $1 of sales 56c is used to cover expenses, which seems unsatisfactory. This is mainly due to sales falling with more than expenses. Another reason for this increase is that impairment costs increased by 465%, which is actually unsatisfactory because it means that the value of the company has been reduced since the reputation of the company has become worse due to PPL making a loss, making employees redundant, and reducing donations. Moreover, impairment also incurred when PPL wrote-down $3.1 million of IT software that has become out of date. Additionally, $3.2 million of out-of-fashion inventories that has also been written-down due to the delayed stock.

Read More
1693 Words | 7 Pages

There is a huge increase in cost of goods sold, whereas selling and general expenses have decreased as compared to last year. Cash and cash equivalents in year 2012 have increased as compared to year 2011. There is a decrease in marketable securities which shows that some of the securities have matured during the year. Company has maintained huge inventory as compared to last year, which results in increase in operating cycle.

Read More
1054 Words | 5 Pages

The sales growth in 2014 was -5.30% from the previous year, -12.79% in 2015, 7.16% growth in 2016, and -0.08 % in 2017” (2018, para. 1). It is mostly trending down with only one year of increase (Market Watch, 2018). After deductions, the company had a decrease in profit in 2014 and 2015. However, the company had an increase in profit over the next two

Read More

More about Laramie Wire Manufacturing Essay

Open Document