Page 12 - CIMA MCS Workbook August 2018 - Day 2 Tasks

CIMA NOVEMBER 2018 – OPERATIONAL CASE STUDY

REFERENCE MATERIALS: CONSULTANT’S REPORT (EXTRACTS)

Yamazaki and Co Consultants

Report on Joint venture with Celtland Councils

Section 4: Financial Analysis (extract)

Year 1 Year 2
2019 2020

Sales revenue (C$000s)

Worst case scenario revenue 200 200

Best case scenario revenue 500 550

Expected sales revenue 350 400

Break even revenue 300 300
Margin of safety 14% 25%

Standard deviation 40% 38%

Profitability (C$000s)

Operating profit based on expected sales volume 175 200

Profit before tax based on expected sales volume 117 137

Sensitivity to expected membership fees 10% 12%

32 KAPLAN PUBLISHING