James-Confectioners-Case-StudyMGT418

CASE STUDY > James-Confectioners-Case-StudyMGT418

Kenyatta University Cisco Networking Academy MANAGEMENT 418 JAMES CONFECTIONERS CASE STUDY 3 From the rations calculated for James Confectioners, it is evident that the company had a substantial increment in the COG as the selling prices to its customers remained constant, thus no liability passed to its customers. As much as the cost for supplies a ...[Show More]

Kenyatta University Cisco Networking Academy
MANAGEMENT 418
JAMES CONFECTIONERS CASE STUDY 3

From the rations calculated for James Confectioners, it is evident that the company had a

substantial increment in the COG as the selling prices to its customers remained constant, thus no

liability passed to its customers. As much as the cost for supplies and materials is higher than

expected, as well as a higher expense on operations, insurance and payroll, the company’s

current and quick ratios illustrate that the company is stable, with the ability to meet its bills

without passing them to customers. Its payables and collections are in accordance to schedule

meaning that it presents a rougher economic time for suppliers who have to cope with the

company’s time. Though the profitability ratios are down, they are still above average for the

company.

3. How do the ratios you calculated for this year compare to those of the typical company in the

industry? Do you spot any areas that could cause the company problems in the future? Explain.

From these ratios, it appears that this company is considerably healthier that the typical

company from the industry. The only spot that may cause the company problems in the future is

the average collection period. This period is beyond the national average and stands at almost

double the national average. With this regard, the company could be hindered its ability to reach

its financial goals is the market prices steadily increase. This is because; there exist outstanding

money of which the company cannot utilize until it is collected (Norman, 2013).

4. Develop a set of specific recommendations for improving the financial performance of James

Confectioners using the analysis you conducted in questions 1 to 3.

According to the analysis conducted above, we can conclude that James Confectioners is

a well-respected and successful company. During hard economic times however, there is the

possibility for customers to cut back on goods that are perceived as luxury in the market such as

the products from James Company. With this regard, I would recommend that the company

should increase their prices in the market at a considerable ratio different from the ratio of its

expenses. This would give the company a bigger profit margin that better financial performance

for the company. The company could also reevaluate their marketing strategy to eliminate on the

possibilities of creating more expenses during marketing thus maximize on the profits.

5. What pricing recommendations can you make to Telford and Ivey James?