Chem Med Circumstance

 Chem Mediterranean sea Case Essay

Chem Med Case 1

Chem-Med Company

1 . What was Chem-Med's rate of sales development in 2003? What is it forecasted to be in 2004, june 2006, and 2006? Sales Progress

= (Sales this year -- Sales previous year)/Sales a year ago

for the year 2003: ($ a few, 814 - $3, 051) / $3, 051 = + 25%

for 2004: ($ your five, 340 -- $3, 814) / $3, 814 = + 40%

for june 2006: ($ six, 475 - $5, 340) / $5, 340 = + 40%

for 2006: ($ 15, 466 - $7, 475) / $7, 475 sama dengan + 40%

2 . What is the company's rate of net gain growth in 2004, 2006, and 2006? Is expected net income growing faster or perhaps slower than projected product sales? After processing these beliefs, take a hard look at the 2004 income declaration data to verify if you want to make any adjustments. Net income growth

= (Net income this season - Net income last year) / Net Income last year to get 2004: ($1, 609 -- $1, 150) / $1, 150 = +40%

to get 2005: ($1, 943 -- $1, 609) / $1, 609 sama dengan +21%

pertaining to 2006: ($2, 903 - $1, 943) / $1, 943 = +49%

In respect to Doctor Swan's estimations net income development will match sales development in 2005 then slack off and rebound 5 years ago. However , Dr . Swan's statistics are misleading: in 2004 they incorporate $500, 500 worth of extraordinary salary expected to end up being received in the settlement from the suit with Pharmacia. This amount ought to be excluded through the calculations since (1) receiving the amount through no means certain, and (2) it is a one-time celebration which has not do together with the operations with the company. If the amount can be excluded coming from 2004 figures we see that net income expansion for 2005 is actually substantially less than forty percent. Aftertax effect of removing $500, 000 via gross income

= $500 by (1 - tax rate)

= $500 x (1 -. 33)

= -$335

New net income

= $1, 609 - $335

= $1, 274

Appropriate net income growth for 2004

sama dengan ($1, 274 - $1, 150) / $1, 150

= 11%

3. How does Chem-Med's current ratio pertaining to 2003 compare to Pharmacia'. How does it compare to the sector average? Compute Chem-Med's current ratio to get 2006. Is there any problem with it? Chem-Med's current ratio

= Current assets / Current...

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