Companies with Similar Gross Profit Figures and Different Net Operating Income - Assignment Example

? Business Questions Question How could two companies with similar gross profit figures end up with dramatically different net operating income? Answer Basically, when we are talking about two companies having same gross profit figures but at the same time, they are having different net operating income as well, so it is depending upon the operating margin of the company. According to net operating income represents the financial strength of the company after accounting operating expenses and other cost of goods sold for the particular year. According to Investopedia Online, Financial Ratios Tutorial, There are four levels of profit and profit margins- gross profit, operating profit, pretax profit and met profit. The term “margin” can apply to the absolute number for a given profit level and/or the number as a percentage of net sales/revenue. Profit margin analysis uses the percentage calculation to provide a comprehensive measure of a company’s profitability on a historical basis (3-5 years) and in comparison to peer companies and industry benchmarks. Another online resource tells how to calculate operating margin. According to the Allstarsstock online, Key measurement of the financial strength, by Walden, G “Operating income / total revenue= operating margin.” Hence, from the above references, we can easily abstract the impact of operating margin on the overall operating income of the company. Therefore, two companies having same gross profit can also have different operating income. Question #2 Consider various options for pursing new market opportunities. How could the options for pursing market opportunities be applied to your career planning at various stages of your career? (Think of your skills as the products you have to offer) Answer Thinking of personal skill as the products and selling them in the market is just like selling your company’s products in the market or sometimes you can purse for new market opportunities. According to the book by Chaudhry, A. The Craft of selling yourself. 2009, “Job hunting is similar to selling anything. It’s selling of one’s skills, ideas, time, talent, energies, and expertise. It’s like being available for value addition as any other product does; and in return you get paid in cash and kind.” Therefore, in order to hunt new market opportunities, we have to enhance our skills as well look for the new opportunities created in the market. All we need to take crucial steps towards our career path planning. It is very vital to achieve certain level in the society, which is considered as or you can say most suitable for us while considering our overall qualifications and skills we are having. In order to achieve target market in terms of new market opportunities in regards to career planning, we should take a look at latest happenings and current market situation. Therefore, according to the author of the book, managing your Career. 2010,” each one of us has the ability to control the path that our careers take. It requires that we truly self-aware so that we can identify what our own interests and passions are – what will truly make us happy in our career.” Question #3 Do you agree that giving companies tax breaks for charitable contributions distorts public spending by indirectly giving companies and activists control over how tax revenues are spent? Why or why not? Answer I do agree with the statement mentioned above, other than people like Warren Buffet and Bill Gates. According to the colloquium on tax policy and public break issued by New York University School of Law, Tax deductions for charitable contributions: domestic activities, foreign activities, or none of above, 2011, “Warren Buffet, Bill Gates, and a bevy of other billionaires have pledged to give half of their wealth for charitable purposes.” This statement shows that top most billionaires in the United States are giving more than half of their overall wealth for charitable purposes. Nevertheless, in most of cases, the above statement is quite right. Because there are companies operating around the world, having tax breaks which resulting distortion of public spending and in addition, they can have direct or indirect control over the overall tax revenue. According to the book by Plummer, T. The psychology of successful investing. 2006, “Hence government is empowered to lower interest rates, reduce taxes and increase government spending in a recession and it is empowered to raise interest rates, increase taxes and reduce government spending under conditions of inflation.” Hence, it is up to the government whether to provide relaxation to the charitable organizations in terms of tax breaks. Question #4 As a consumer taking charge of your own financial future, what lessons could you take from the business concepts of fixed and variable costs? Answer According to the Gale, T. Ed.2. Encyclopedia of Business and Finance. 2006 “variable costs based on the actual usage and fixed costs based on budgeted usage.” This statement given in the book can elaborate the short differentiate between fixed and variable costs. In manufacturing business, budget plays a very significant role, especially when we talk about costing. Therefore, in order to determine exact figures, we need to understand the concept or should have clear vision about variable and fixed cost. Another statement given in the book ED.2.Financial management & analysis. 2003 “the mixture of fixed and variable costs depends largely on the type of business.” This statement also suggesting that your overall operating cost which combines both fixed and variable costs is depending upon the type of business you are being associated with. Question #5 It can be debated that either organizational change drives technology (i.e. technology is a response to organizational needs), or technology drives organizational change (i.e. feasible technology is used to cultivate organizational wants), or that both technology and organizational change evolve together. Which view do you agree with and why? Share an example from your work experience to support your viewpoint. Answer Organizational change works together with the technology. Both are inter-depending on each other. Basically, organizational change is dependent to the technology; whereas technology is also dependent to the organizational change. According to the book written by Thomas, B; Miller, C; Murphy, L. Innovation and small Business –Volume 1. 2001 “small businesses are making an important contribution to the development of technological innovation with industries at regional and national levels.” I do agree with the statement which stated that technology is the response to organizational needs. According to the book by Bergeron, B. Essential of Knowledge management. 2003 “the modern business organization can’t compete effectively in the marketplace without skilled managers, employees, and technologies involved in the business.” Question #6 With everything, you’ve learned about labor relations so far, would you describe yourself as more pro-union or more anti-union? Why? Answer In the light of above statement, I would consider myself among the group of anti-union people. The reason for that is just that unions always create hurdles in the workplace environment. There can be drastic consequences of having labor union within the organization. If I would have been asked whether to have labor union in my own organization or the organization in which I am working, then my answer will be “no.” I would not prefer to have labor unions in my organization whether I am working there as an employee or I am running that organization as an Entrepreneur. However, all employees are free to join trade or you can called them labor unions incorporating within the organization. The management could not make restrictions against employees involvement towards labor or trade union related activities other than their routine work. According to the Martin.A.E, Oxford dictionary of Law. 2003 “under the trade union and labor relations (consolidation) act 1992, all employees are free to join a trade union or not, as they wish.” Whereas, according to the Collin P.H, Dictionary of Law, “organized labor is defined as the employees who are members of trade unions.” Hence, in presence of trade unions, employees will participate in the activities other than those work related. References Bergeron, B. (2003). Essential of Knowledge Management. New Jersey: John Wiley & Sons. Bookboon. (2010). Managing Your Career. Chaudhry, A. (2009). The Craft of Selling Yourself. TRCB Media Networks LLC. Collin, P. (2004). Dictionary of Law. London: Peter Colling Publishing. Gale, T. (2006). Encyclopedia of Business and Finance. New York: Macmillan Reference USA. Law, N. Y. (2011). Tax deductions for charitbale contributions: domestic activities, foreign activities, or none of above. New York. Martin, A. (2003). Oxford Dictionary of Law. London: Oxford University Press. Online, I. (n.d.). Fiancial Rations Tutorial. Retrieved October 23, 2012, from Investopedia: http://www.investopedia.com P.P, F. &. (2006). Financial Management & Analysis. New Jersey: John Wiley & Sons, Inc. Plummer, T. (2006). The Phsycholgy of Successful Investing. London: Kogan Page. Thomas, B., & Miller, C. (2001). Innovation and Small Business. Bookboon.com: Ventus Publishing. Walden, G. (n.d.). Key measurement of the financial strength. Retrieved October 23, 2012, from Allstarsstock: http://www.allstarsstock.com Read More