Implementation Plan And Concluding Comments – Term Paper Example
Concluding comments of Affiliation The long term objective is to increase sales by 13.4% within the next three years. By implementing this strategy, the company will be in a better financial position than the previous years. There is improvement in the current ratio over the three years.In order to increase sales, the company will do adverts in the local newspaper and television adverts, hire 100 locals for production in the second year and expand assembly line in the third year. The company can increase salaries of employees without affecting its financial position. The quick ratio is improving from 1.82 to 2.04 in the year 2014.This implies hiring more workers and increasing their salaries in the third year, will contribute to the achievement of long term objective of the company. Retained earnings is the portion of company profit that is not distributed but used for expansion of company portfolio (Laszlo, 2008).The debt/equity ratio is 1 in 2012, the ratio is 10.95 and 6.66 respectively in 2013 and 2014.In the first year, the company is in a good financial position. The company has more debt than retained earnings in the second year. In the third year, the debt to equity ratio decreases. The company has used some of the retained earnings to pay off debts. The reason for the decline in retained earnings is the increase in the cost of goods sold. The Gross profit ratio for the three years is 0.17, 0.14 and 0.13 respectively.Since current assets are more than current liabilities, the company cab increase debt and invest in new opportunities such as building a new plant in Brazil. The human resources department can hire 350 employees in the first year and increase salaries for the workers in the second year since the current assets are more than current liabilities.By using this strategy, the net profit decreases in the second year and then increases in the third year. Although net profit decreases in the second year, the company does not incur losses. In 2012, the change in net income ratio is -0.72 and in the third year the change increases to 0.26.The change is negative because of a decrease in net profit. The decrease in net profit is attributed to the increase in salaries of employees in the second year. However, the increase in salaries motivates workers and this increase sale of the company. The long run implication is increase in net profit and thus the long term objective of the company is met.
Laszlo, C. (2008). Sustainable value: How the worlds leading companies are doing well by doing good. Sheffield, UK: Greenleaf.