Powell Logistics Inc: Summary of an Investigation - Essay Example

Many companies are faced with similar decisions because of the economic crisis but many of them are out to be the largest supplier of whatever commodity or service it is they provide. In John Powell’s case, he never intended for Powell Logistics to become the largest trucking company in Canada or anywhere else. He simply wanted to provide a source of steady, sufficient income for himself and his family. With an increasing loss in profits due to the price of oil and the severity of his competition, his company is gradually losing money each year even though the initial gross profit is higher.

While examining page six of the case study, a statement of earnings is provided which shows that in 2007, PLC had an increased profit of almost $500,000 compared to the gross profit from 2006. At first glance, this seems to be a positive outcome for the company. However, total operating expenses were also increased by almost $500,000. Operating and other income before taxes in 2007 was actually almost $300,000 less than it was in 2006. The economy’s problems, including the ceaseless increase in the cost of oil, were expected to continue for a long time.