Financial Analysis And Budgeting For Jumper Jackfruit

Profit Budgeting Errors

	January Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	February	March	April
Sales Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	300	500	200	200
Price	300	300	300	300
Revenue	90000	150000	60000	60000
Direct material($20/hr)	6000	10000	4000	4000
Direct labor(25hr/hr)	30000	50000	20000	20000
Variable overheads	1500	2500	1000	1000
Selling expenses	600	1000	400	400
Variable expenses	38100	63500	25400	25400
Contribution	51900	86500	34600	34600
Fixed cost	20000	20000	20000	20000
Net profit	31900	66500	14600	14600

The profit budget had an error initially on the revenue part,  The error occurred when the selling price used was indicated as $220 per case instead of $300. Second, February sales were under stated by 300 units. The accountant had recorded  the projected sales in January at 200 units instead of 500 units. This are the two items that caused all those errors in the profit budget(Lansdowne, 2003).. 

	ref	Jan	Feb	March	april
Sales		300	500	200
Beginning Inventory	a	150	250	100
Desired Ending Inventory	b	250	100	100
Production (units)	A+b=c	400	350	200
DM( Needed for production)	c	400	350	200
Beginning Inventory (DM)	50%	200	175	100
Desired ending inventory		175	100	100
DM(Purchase) Units		375	275	200
Cost of DM		20	20	20
Total		7500	5500	4000

Direct labor budget

	Jan	Feb	March
Production Units	400	350	200
Hours required to complete one unit	4	4	4
Direct labor needed	1600	1400	800
DL hours	25	25	25
Total	40000	35000	20000

Cash Budget

	Jan	FEB	March
Receipts from sales	90000	150000	60000
Payment to suppliers	7500	5500	4000
Overhead cost	22000	21750	21000
Lumberjack salaries	45000	42000	24000
Total Cost	69500	62250	45000
Operating cash flows	20500	87750	15000

Overhead budget

	Jan	Feb	mar
Production units	400	350	200
VC per unit	5	5	5
Total VC	2000	1750	1000
F.C	20,000	20,000	20000
Total OH	22000	21750	21000

In cash budget management, the discrepancies come in the month of January where the previously done cash flow was a negative case. The difference is in the receipts from sales where Jumping Jackfruit was understating the sales received by a huge margin leading to negative cash flows. The previously stated sales receipt for the month of January $66,000 and the current sales receipt after adjustment is $ 90000(Lansdowne, 2003).. In the month of February the receipts from sales was put at $ 132,000 but after adjustment of the cash prices, the receipts came to about $ 150,000. In the month of March the receipts from sales were $ 52,800 and the budgeted sales after adjustment was $60,000. This will lead to a positive cash flow budgeted for jumper jackfruit. Total costs will decrease increasing the net cash flows in each month(Lansdowne, 2003).

In determining the operating cash flows of a business, the total cost and the sales revenues are the determining factors. For the accountant, the main reason for the disparity in operating cash flow is the misrepresentation of figures especially in the revenue.

In order to interpret the statement of flows, you must start with the final part of the balance that you can identify as the increase or decrease of cash, the starting and ending balance of all cash that includes cash balances, have maturity for collection in a period greater than 90 days(Lansdowne, 2003).

It is important that you independently analyze the results of increases or decreases in the amount of funds and conclude the behavior of each of the categories and their impact on the final result.

The operational activity shows the management of the company in the generation of cash from the operation cycle (purchasing, supply, production, delivery, sale and collection), ie if the results are positive or surplus, the company can be considered to be managed optimally and is getting its resources from the same operation, not based on debts and leverage. To perform the representation of the flow obtained by the operations, two methods can be used to calculate cash flow as we saw in the previous article, the direct or indirect method(Lansdowne, 2003).

With respect to investment activities, these relate to the acquisition or disposal of fixed assets. Because most companies usually acquire more assets than those who sell the effect of these activities on the cash flow is usually negative.

In the case of financing activities, the effect of these transactions with creditors, suppliers and shareholders is included(Jeremko, 2004).. The bank interest earned on the loans and the investments that the investors make in the company are reflected as a positive flow of funds, while the amortization of said loans and the payment of the dividends are considered a negative cash flow, that is to say a money outflow(Lansdowne, 2003). It is essential that you analyze the investment needs of the company depending on your business turnover, for example in companies that are engaged in the manufacturing industry you may have a higher capital requirement than a consulting company might need. 

Direct Material and Labor Budgets

By having the information of all the categories it is time to look for a relation between the financing activities and the investment activities since this will give you a guideline of whether the active acquisitions that you are realizing are being supported by the company or are owned by your creditors. An important fact to consider in the case of financing is to consider that when an asset is acquired through a loan, the useful life of the loan is not less than the financing term. This will assure you that you will not be allocating amounts of cash to payments that during that period are not leaving you any benefit for the operation of the company(Jeremko, 2004)..

As you can see, the analysis of the various financial statements such as the income statement, the balance sheet and the cash flow provide valuable information for investors and for making decisions about the management of the company. It is important to be able to distinguish what type of data you can present each of them and in this way to form a complete report with different perspectives about the operation and use of resources(Jeremko, 2004) 

Regards

Accountant 

As long as the customers get the convenience of purchasing both the case and the dice, then they would be willing to pay premium for the product. Hence the two companies should come together join effort to make a product that any consumer would demand and like. This is important because of cost cutting(Hubbard, 2014).

As competition increasingly focuses on differentiation and execution, CEOs will have to steer their companies toward rapid experimentation and innovation, better insight into customer insights, effective pricing and promotions, and great customer service. The big challenges will be to diagnose what the qualities are missing in a company and to develop them quickly(Jeremko, 2004).

The actions of differentiation are being seen by the two companies making dice. We know that there may be several aspects that hamper business improvement. In the commercial many times it feels that the organizations do not find the return to him to progress in being different or special. They are encyst in a way to perceive more of the same without being able to see different alternatives. That our organization has a different product, service or brand is a capacity that does not die, and can be recreated by developing new ways of perceiving to find solutions in each case(Garci?a-Alcaraz, Oropesa-Vento &Maldonado-Maci?as, n.d.).

Cash Budget

The two companies should prioritize Specific advertising of “special offers” and the use of simple and prominent posters allow retail establishments to credit the value they offer and are likely to become increasingly visible elements of the competitive landscape(HILL, 2016). It is important to undertake the promotional initiatives and verify that they are sustainable. In their attempt to compete against value-oriented Japanese companies, for example, American automakers discovered the dangers of announcing large discounts that were valuable but also undermined future margins, as they induced customers to postpone the purchase until that the cars were lowered. Ultimately, the ability to offer competitive prices, even selectively, depends on keeping costs at bay. In view of the virtuous circle that reinforces the solid financial figures of many value-based companies, it is impossible to stand or stand by them through isolated price-cutting initiatives(HILL, 2016). Continuous improvement is necessary, suggesting the importance of one company in the dice making business adopting and simplified lean manufacturing methods, which reduces costs and improves quality consistently and simultaneously.

Much of the market has asked for some alternative to make a difference, given that in recent years there was a rapid growth and generally had structure to support it, which has been resorted to or intensified these professional benefits, since there are already many challenges for different market issues, and when the market is good, the concerns are different, and there is our challenge, but not only in the professional, but also in the personal to bring a tool as the Public Relations to give a true added value(Mika, 2006).

Quality and service are phenomena driven by many factors, which have been emerging for some time and is manifested according to the times, creating winners and losers.

We all have something personal and corporate that makes us special and different. The new business era demands to be innovative, so that to help our company we must achieve success by developing tools and solutions designed to make the most of it. Nowadays, organizations are growing and the fundamental factors that explain the phenomenon are related to the increase in productivity, forging a successful business culture, centered simultaneously on the generation of economic and social value(Jeremko, 2004). 

But then; How to differentiate and anticipate these movements?

In a context of intense competition, demand for short-term results, in an effort to grow, etc., companies fight for competitive advantage, fought real battles to win market shares and struggle to differentiate themselves. At present, so loaded with players the flow is reduced and everyone is competing(Burman&Slemrod, 2013).

Overhead Budget

Knowing the public, the market and the competition, a first step would be to propose abandoning the battles and going out in search of new market spaces that are still unclaimed. A systematic and particular approach to making competition an irrelevant factor. So the two companies  should understand an old concept of the Prussian armies during the First World War; “The strategy does not consist of a long plan of action, it is the idea steadily throughout changing circumstances(Mika, 2006).

Strategy, a concrete fact

We should note that if we have a problem with our strategy there is so much competition, there is more tactical, more action and less time. Evaluating stocks and models in times of greater business bonanza and adapting the current ones can be a good benchmark.

The consumer is at the center of the strategy, it is the engine of the small and continuous adaptations that are being implemented to the business plan. There is not much secret, it is the creativity and the local knowledge of the market that can give us the competitive advantage.  The strategy is to have a vision to know where we stand and what our destiny will be(Jeremko, 2004). In these times you must be ready to seduce, creativity, quality and level of products enrich the market. Improvisation ceases to be the priority in every company and passes the scepter to professionalism and training, problems must be identified immediately and honestly, facilitating a strategy and taking appropriate countermeasures. Part of our responsibility is to look at where we want to be positioned and differentiated, and consequently what steps to take in the area of ??Public Relations (PR) and how to be in the market(Medinilla, n.d.). The most conspicuous advantage of innovations is an increase of sales in the main areas. At the commercial level, being creative and innovative can be part of the difference; In fact, intelligent innovations can punish competition. But can the application of differences help companies to sell more, gain market share and generate added value? In general differentiation is more an art than a science, we can establish what works and what does not work for us as well for competition. Companies are growing, at the same time there is an effect that makes each area work in its own sector; but if you do not execute and speak the strategy to each other, however elaborate it may be, it will not succeed if it is not implemented in the whole.(Jeremko, 2004)

Importance of Cash Flow Management

.Always maintain control of the organization, optimizing its ability to identify, prevent and respond to possible and constant threats that threaten against your products. The companies can no longer operate with disintegrated information. It requires data and information integrity, with the ability to add functionality to users and to handle all the information that represents the business, its processes and the market in which it competes. It must represent everything that gives life and movement to the business of the company, each and every one of the parties must be related according to the needs of each business and be part of it(Medinilla, n.d.)

Explore and consolidate planning activities is a priority. Marketing, promotions, press, public relations and other tools are extremely useful and necessary in all plans of companies that want to survive(Halevi, 2010). The best public relations in a service company is the service that the people who perform in our company has a good vocation of service. Not only do it because it is your obligation but feel that by giving service the way the other is requiring it also produces satisfaction. Differentiation, a constant journey At the present time it is no longer possible to impose or position a brand or product on the public, but these must be adopted by the people; knowing that the real challenge is to confirm the relevance(Stewart, 2012).. We must reflect, pause, look carefully at the context in which we must survive.

Try to perceive changes in customer requirements, review marketing channels, advertise, and public relations do not become obsolete; not clinging to products and concepts just because they fit into established business models(Sower & Sower, n.d.).

The organization must optimize the performance of its resources almost permanently, accelerate the releases of services, taking into account that innovation is the ability to differentiate to excel in the rest, knowing which are the processes that must be supported, evaluating how to consolidate and optimize what already exists(Stewart, 2012).

The scheme of work is of cooperation and collaboration which allows to maintain an image, a name and a brand. Providing good technique, great innovation and the best service is undoubtedly what allows the company to generate contribution in front of others. People compare results not products, so we must know that if we are unable to achieve that promise we will be in a big mistake(Kaizen Workshops for Lean Healthcare, 2016). On several occasions the client has an expectation, so we must know how to select all processes and execution of them over time. We must consider the conditions of financial solidity, the availability of a customer satisfaction plan with a defined process, management measures of the same and from the resources necessary to apply them to the development of each product(Stewart, 2012). 

Financial Statement Analysis

Jumping jackfruit uses this philosophy to improve on quality and maximize production of the items being produced. It allows to improve the quality and to provide a maximum of motivation for the solution of problems. It is synonymous with simplicity, efficiency and a minimum of waste. The JIT requires minimum security stocks in materials and products in process, so when the time comes to produce the product, the parts in the production process, should be the best which must be obtained(Stewart, 2012).. This rule ensures high forecast yields on the production line. The second rule refers to the size of the production batch. The smallest batch size should always be produced for any product, regardless of the production volume of the product. These two rules constitute the pillars of the JIT principles of operation. A violation of any of them would cause serious problems in the implementation of the system(Aaker& Mills, 2005).  

The absolute elimination of unproductive costs, we must take into account the following steps:

Improving performance will make sense only when tied to cost reduction.

Look at the performance of each operator and each line. Such performance should be improved at each step and at the same time for the entire plant as a unit.

Actual performance improvement is achieved when the level of unproductive costs equals zero and a 100% work rate is achieved. Only those activities that change products physically add value that is, counting, moving or even inspecting are tasks that do not add value, but cost; therefore they are wasteful. Another principle to be added to the Just-in-time philosophy is the so-called continuous improvement(Stewart, 2012).

In a factory, poor organization and poorly managed operations are manifested by high stock levels and long production times. In some factories the phenomenon is self-feeding: an order that is waiting for parts is very urgent and to satisfy it is completed with parts made for other customers, whose orders will be in turn missing parts. This is an example of Jumper jack fruit industries(Kaizen Workshops for Lean Healthcare, 2016).

Companies must know how to respond to market expectations, for which they must manufacture the products that customers want, in the terms and with the level of quality they require, for a minimum price. Traditional industry does not have enough capacity for this. Their factories are lacking in agility and speed of action. The Western does not have the healthy habit of fighting the causes of problems, but before every difficulty always finds a means that makes the effect bearable(Stewart, 2012).. It systematically contributes to increasing costs.

The breakdowns of the machines. To create safety stocks to prevent against the effect of eventual damages.
Quality problems. To achieve the level of efficiency and competitiveness required today, it is important to stop treating the effects of the problems and to address their causes. It is therefore necessary to identify such causes. The key causes are those that are not the consequence of others and that, therefore, they should formulate logically among the real causes of inefficiency; being such:

The preliminary step for the application of the just-in-time production system is to completely identify unproductive costs such as: By eliminating these unproductive costs we can fully improve operational performance with a wide margin. The just-in-time production system clearly reveals an excess of manpower.    A single supplier, if the supplier has sufficient capacity.
    
Only those activities that change products physically add value. That is, counting, moving or even inspecting are tasks that do not add value, but cost; therefore they are wasteful.

Operating advantages brought about by a strong reduction of stock and terms  

The important foundations in realizing Kaizen’s philosophy is Commitment and Discipline at every level of the organization. The discipline and constancy are what makes kaizen different from other methodologies and so makes it a philosophy. The group of people who perform Kaizen after fixing a problem continue to improve and do not stop or wait for another problem.

In terms of commitment it should be noted that every level of organization has involvement in kaizen. It is very common to say that kaizen is for the plant and operators that is not so kaizen starts from top to bottom(Kaizen Workshops for Lean Healthcare, 2016). This begins with the president improving at his level, the managers, managers and supervisors get involved in the teams to improve day by day. Here we are talking about that there may be teams in finance, in Customer Service, Sales, Supply Chain etc …

What is the purpose of Kaizen in the company?

Kaizen serves to detect and solve problems in all areas of our organization and has as a priority to review and optimize all the processes that are performed. A company with the Kaizen philosophy has as a first competitive advantage the always being in change to improve and its motivated staff doing kaizen activities.

Kaizen requires investment?

Kaizen teams must review and improve day by day in the capacity of their resources. The important thing is that if the team gets to have a solution and must make an investment this should be accepted by the business. It should be noted that not all solutions must be with investment.

What are the most used tools in Kaizen?

How to implement Kaizen and what structure should there be in your organization? Kaizen is a philosophy for the company so its implementation has certain steps and we can suggest these by experiences acquired by the company.
The structure of kaizen in the organization is the fundamental basis so that it has no obstacles in time and therefore we make reference to our experience. Many times we ask ourselves the question why Japanese companies are competitive `, surely many of the answers to this question have support in the Kaizen and is that Kaizen is not a simple concept, is a whole way of life that involves both managers and workers in the pursuit of progressive improvement of business(Kaizen Workshops for Lean Healthcare, 2016).

The Key to Japanese Competitive Advantage is explained in a simple way what the essence of this philosophy is: Kaizen means improvement, even more means progressive improvement that involves everyone and that means that our way of life, already whether at work or in social and family life, is so valuable that it deserves to be constantly improved.

The essence of all Japanese administrative practices, such as: productivity improvement, quality control activities, quality circles, zero defects, suggestion system, etc., can be defined using a single term, Kaizen.The concept of Kaizen can be visualized as an umbrella covering all these Japanese administrative techniques that have achieved so much popularity worldwide(Stewart, 2012).. The Kaizen explains why in Japan, companies cannot remain the same for a long time. This perception is the difference in how we understand change in Japan and the West.

Unlike Western practices, the Kaizen is people-oriented and directed at people’s efforts. Likewise the Kaizen emphasizes the importance of the processes since these must be improved before the final results are produced.

The Kaizen is based on the Culture of Quality Total (TQC), whose philosophy is Quality as the basis for customer satisfaction.

The Organizational Mission in KAIZEN is:

The  mission is to continuously improve our products and services to meet the needs of our customers, enabling us to thrive as a company and provide a reasonable return on investment to our shareholders. Vision is the result of our dreams in action and precedes success. A vision without action does not give results, it makes no sense(Jeremko, 2004).. The vision allows us to define our destiny based on clear objectives, jumper jackfruit do not have it, there is no future” .

TQC will bring about some changes in the old style of doing business. There are four guiding principles that could be called “TQC Commandments”. 

First of all must be customer satisfaction. Our products and services must exceed the needs and expectations of our customers in all areas of quality, costs, delivery and time. The objective is to give greater value to the product that our customers are willing to pay(Stewart, 2012).. 

All work is the result of a process. TQC focuses on this process until you understand, manage and execute it. When the process is understood, it can be continually improved. The traditional mercantile philosophy considers innovation as a source of improvement of the process.

For TQC, the people have more importance, the partners are the main source of the better development of the processes.We value the dedication, knowledge and creativity of men and women. Everyone has the ability to contribute in the processes of the company (Stewart, 2012). 

Conclusions

The goal is to provide customer satisfaction while minimizing the total cost. This is the essence of the process “just in time”. Thus, through a continuous improvement program (kaizen) Just-in-time provides “perfect quality products, in the exact quantities needed, at the precise moment they are needed, at the lowest total cost of delivery” of the Just-in-time is no longer a competitive advantage, but an imperative need to participate in the market game. As a complement to what has already been expressed in this text we suggest two videos through which you can learn more about the philosophy of production just in time and its advantages, as well as the main elements that make it up(Kaizen Workshops for Lean Healthcare, 2016). 

References

Aaker, D., & Mills, M. (2005).Strategic market management. Australia: Wiley.

Burman, L., &Slemrod, J. (2013).Taxes in America. New York: Oxford University Press.

Checkley, K. (2002). Strategic Cash Flow Management.Chichester: Capstone Pub.Garci?a-Alcaraz, J., Oropesa-Vento, M., &Maldonado-Maci?as, A. Kaizen planning, implementing and controlling.

Halevi, G. (2010). Industrial competitiveness. Dordrecht: Springer.

HILL, V. (2016).KAIZEN APPROACH TO FOOD SAFETY. [Place of publication not identified]: SPRINGER INTERNATIONAL PU.

Hubbard, D. (2014). How to measure anything. Hoboken: John Wiley & Sons.

Jeremko, C. (2004). Just in time geometry. New York: LearningExpress.

Kaizen Workshops for Lean Healthcare.(2016). Portland.

Lansdowne, J. (2003). Just in time. New York: Kensington Pub. Corp.

Medinilla, A. Agile Kaizen.

Mika, G. (2006). Kaizen event implementation manual. Dearborn, Mich.: Society of Manufacturing Engineers.

Pezzino, M. Product differentiation.

Sower, V., & Sower, C. Better business decisions using cost modeling.

Stewart, J. (2012). The Toyota Kaizen continuum. Boca Raton, FL: CRC Press.

Subotzky, G., Ng’ethe, N., &Afeti, G. (2008).Differentiation and articulation in tertiary education systems. Washington, D.C: World Bank.