MANAGING FINANCE Essay Example | Topics and Well Written Essays - 3750 words

MANAGING FINANCE - Essay ExampleFinancial analyses of the company reveal that though liquidity position of the company is good to meet victimize term obligations, but its earning powers, and efficiency to collect receivables and inventory turnover is much below the industry standards. It is suggestible that the company should make capital in investing in machine costing $3 million in order to make cash savings in cost of sales on the founding of in depth analysis of investment made as per payback and NPV methods of capital expenditure budgeting.The aim of any pricing strategy is to cover the be involved in the project and earn desirable profit. Costs in any project can be traced as control or substantiative costs. Direct costs ar those that are easily traceable by the management to precise tokens like direct material and direct labour for specific product. Whereas Indirect costs are common to many items and cannot be traces to any specific item or area. Indirect costs are ch arged to item on basis of certain allocation techniques. Again from the point of production the costs are either prime costs or conversion costs. primitive costs are direct material and direct labour costs and these are directly related to production. Conversion costs are related to transforming direct material into finished goods and these include direct labour and factory overheads. Costs further changes with majority of production. On basis of relationship to volume costs are either fixed costs, variable costs or mixed costs. Fixed costs remain constant over a relevant range of volume or output. Variable costs are assumed to change in direct proportion to changes in volume/ output. Mixed costs contain some(prenominal) fixed and variable attributes, and may be semi variable costs and step costs. Semi- variable costs usually represent a minimum tip off for making a particular product or service available, and variable portion is cost for using