The Importance of the Annual Report, Income Statement - Essay Example

Advanced Writing for Marketing October 9, COVER LETTER Purpose The correspondence explains the importance the annual report, income statement. The correspondence explains that the income statement is the best gauge of a sales manager’s accomplishment. To pass, the manager must generate get net income. Audience The correspondence is meant for a non-accounting graduate President. The recipient of the letter will access the document as the better criteria for evaluating the manager’s job performance. The correspondence will be emailed to the manager with a statement “if you any questions, you can reply to me using the same email address.” Persona The document helps the President improve job performance evaluation, in terms of sale manager’s performance. The document is intended to replace the current job evaluation rubric, in terms of the manager’s job benchmarks. The document explains the superiority of the proposed annual report-based benchmark over the current attendance based criteria. Dear president: It is highly recommended that that annual report, income statement, replace the current job performance benchmark (Weaver 2007 293). The current benchmark pales in comparison with the proposed annual report rubric. The income statement is used by most business entities as job performance yardstick. Judging from the use of the income statement as the standard global criteria, it is highly recommended that you, my president friend, follow suit. Further, implementing your current attendance-based criteria is understandable. You are reducing the manager’s job responsibilities. The human resource department is tasked with collection the attendance reports of the managers. All the managers have to do is to “time in” by swiping one’s identification card through the attendance machine. When the manager leaves the office, all the manager has to do is to “log out”. Logging out is done by swiping one’s identification card through the time recording machine strategically located near the entrance / exit pathways. The human resource department presents the attendance report to you, President, indicating your sales managers’ tardiness report. Furthermore, this is comprehensible. Your current impression of the best employee is one who is devoted to one’s job. A loyal employee will normally reduce absences and tardiness to allowable levels. Your company allows excused absences on reasonable ground. Reasonable grounds include unexpected traffic from home to the work area, hurricanes, earthquakes, and other reasonable causes. Lastly, labor law regulations allow absences your employee is downed by an accident or is sick. However, I recommended a better performance rubric. I highly recommend that you should implement the annual report, income statement, as the better criteria to determine the manager’s job performance (Taylor 153). The annual report removes the possibility that managers may not find the drive to excel in their job responsibilities. Under your current attendance criteria, the manager who generates a $1,000,000 and two unexplained absences has a lower job performance grade, compared to an absent-free manager generating a lower $150,000 sales output. Likewise, put yourself in your top selling manager’s shoes. How will you feel if the human resource department presents a report to management, including you, stating that the top selling manager has a poor job performance grade because of his unavoidable absences? Well, look again the sales outputs of your current managers. I can easily forecast that the sales outputs of your managers are far lower than the average industry manager’s sales outputs. Consequently, your current attendance-based manager evaluation system should be crumpled, rolled into a ball, and thrown into the office trash can, immediately. One financially debilitating and avoidable side effect of your current attendance job performance criteria is that the top selling managers may be enticed to search for greener pastures. Your best sales persons may accept the juicy offers from your competing companies. With the juicy offers indicating sales should be the job performance criteria, you may wake up one day losing your best people. Further, the income statement is used to determine whether the company, especially the sales manger, was able to make the bottom line. The bottom line is described as the net income. The income statement shows whether the company generated a net income or net loss. A net income indicates the sales manager successfully generated more than enough revenues or sales to pay for the company’s cost of production and daily operating expenses. By generating a net income, the sales manager automatically gets a passing grade. To get a higher grade, A++, the sales manager must generate more sales. Higher sales amounts translate to higher net profits. On the other hand, generating a net loss means the sales manager did not sell enough products to pay for the company’s production costs and daily operating expenses. When this happens, the manager automatically receives an “F” or failed grade. Using the income statement, the sales manager is graded based on his net income benchmark, not based on attendance. Further, the income statement shows the gross profit amount. Deducting cost of purchases from the net sales figure generates the gross profit amount. This figure pertains to the sale manager’s performance. A gross profit result means the sales manager generated more than enough sales to cover the cost of purchasing the raw materials. The production employees convert the raw materials into salable products. A gross profit output means the sales manager sold the products at prices that include the cost of the raw materials, the salaries of the production employees, and other factory expenses. The gross profit shows that the sales manager sold the products at a markup. Lastly, the same sales manager must generate enough sales to pay for the company’s operating expenses. If you are renting your company buildings, the sales manager must generate enough sales to pay for the monthly rent. The sales manager should generate enough sales to pay for the transportation, gasoline, oil, and other vehicle expenses. The expenses include the amounts paid by the sales manager for entertaining the company’s current and prospective clients. Evidently, the annual report-based marketing benchmark greatly outshines the attendance-based criteria. In closing, “if you any questions, you can reply to me using the same email address.” Works Cited Taylor, Eric. Mastering the World of Marketing. New York: J. Wiley & Sons Press, 2011. Weaver, Samuel. Strategic Financial Management. New York: Cengage Learning Press, 2007. Read More