Page 12 - OCS Workbook - Day 2 Tasks (May 2018)

CIMA MAY 2018 – OPERATIONAL CASE STUDY

REFERENCE MATERIALS: CONSULTANT’S REPORT (EXTRACTS)

Yamazaki and Co Consultants

Report on Mansako’s plans to make and sell a clothing range designed by Stig Yurgenson

Section 4: Financial Analysis (extract)

Year 1 Year 2
2018 2019

Sales revenue (L$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 (L$000s)

Gross profit margin on sales 50% 50%

Gross profit based on expected sales volume 175 200

Profit before tax based on expected sales volume 117 137

Sensitivity to expected selling prices 10% 12%

32 KAPLAN PUBLISHING