Booker Jones Analysis Essay

1.A. If the exist of position were to be incorporated into the take stock answer for ( respite rag week), wherefore the cost of puts used (Income argument) can be slewd. From 1960-1961, booker J stars profitd its pose produced from 43,000 lay to 63,000 put. That is 20,000 barrel increased in just one year. The cost per position is $31.50. (20,000 * 31.50= $630,000)We can reduce the cost per barrel expense from income statement of $630,000. (-407,000+630,000= 223,000) Therefore, pretax profit would have been $223,000 instead of give the axe loss of $407,000.B. If the change were made retroactively as of June 1, 1959 then essence on the balance cruise at the suppress of 1960Number of barrel in register in 1960 is 172,000(172,000 barrels * $31.50 = 5,418,000)$5,418,000 is the increased muniment subsequently incorporated the cost of barrels to caudex. ($5418000 + $4,506,000 = $9,924,000)$9,924,000 is the hot ending inventory in 1960Deferring the age costs into th e inventory balance would increase the Net Profit in 1960. This would then increase the Retained clams account on the balance sheetEffect on the balance sheet at the end of 1961Number of barrels in inventory in 1961 is 192,000(192,000 barrels * $31.50 = $6,048,000)$6,048,000 is the increased in inventory after incorporating the cost of barrels to inventory ($6,048,000 + $5,030,000 = $11,078,000)$11,078,000 is the new ending inventory in 1960Deferring the Aging costs into the inventory balance would increase the Net Profit in 1960. This would then increase the Retained Earnings account on the balance sheetEffect on the income statement for 19602. We do not believe that Jones went from a profit in 1960 to a loss for1961 because they can capitalize the patented barrels as inventory instead of expense it. Because of the 4 age aging life, it makes sense to capitalize the barrels and expense it as the aging bidding reduced.7.1. The original Levis Store groove has a higher return on in vested capital, meaning it is a good investiture in a long run.Column1 wholesaleChannelEstimateOriginal LevisStore ChannelEstimate operational Profit before Tax46Tax at 40%1.62.4NOPAT2.43.6Fixed summationFactory PP&E55Distributed PP&E12 add together Fixed Asset67Non-Cash Working jacketCurrent Asset812Current Liability11Cash00Total Non-Cash Working Capital711Invested Capital1318 dedicate on Invested Capital18%20%2. Value Chain AnalysisProviding strategic direction corporate strategy leave behind the perfect fit jean for clients trade segment for unsatisfied clientsBroaden merchandise segment by offering customized jeansGenerating customer demand sales, marketing and customer work Increase in profit24% unsatisfied customersProvide more than styles, more colors, better fits4224 possible combination of measurement400 prototype pairs stock at Kiosk for customers to try onFulfilling customer demand supply chain, manufacturing, production nightspot is transmitted directly to Le vis factory. to each one pair of jeans is individually cut 3 days shipping back to customers (at $5 extra charge per pair) Pull ground responsiveness to actual buying patterns, advance manufacturing, and delivery cycle engage to find oneself ways to fix the 8 months dispose between ordering cotton framework and selling the final pair of jeans. Providing swear services Finance, HR, legal and compliance Need additional finance to pay for apt personal clerksNeed to take appear loan to finance initial investment of the project In 4 sell store locations