BUSINESS

Business Decision Making Part 2

Business Decision Making Part 2

Introduction

This assignment is about the understanding of decision making tools in the business context. There are two tasks in this assignment. These tasks are discussed in the following sections.

Task 3: Goohgle Plc

In this task, the data has been gathered relating to the Goohgle Plc's marketing expenditure, sales revenue and profit level over the last eight years. The following is the data:

Year

Sales (£000)

Marketing (£000)

Profit (£000)

1

375

45

145

2

495

65

160

3

590

88

242

4

645

99

218

5

495

50

180

6

575

78

220

7

665

97

250

8

810

118

290

Total

4650

640

1705

Bar graph showing the components

Interpretation:

The bar graph has clearly shown that the Goohgle Plc has achieved highest level of sales as well as the highest level of profits in the eight year. However, the marketing expenditures have also increased in the eighth year as compared to other years.

Pie chart of the total shares of the components

Interpretation:

The pie chart is related to the total share of the Goohgle Plc's marketing expenditure, sales revenue and profit level over the last eight years. The chart results have shown that the highest share was that of the sales over the eight years and then the share was of profits. The share of marketing expenditure over the period of eight years is less as compared to the sales revenue and profit levels.

Scatter diagram of sales revenue over the period of eight years

Interpretation:

The scatter diagram of Goohgle Plc's sales revenue over the period of eight years shows that the highest level of sales are recorded in the eight year. In the fifth year, the sales revenue was dropped to a great percentage and then from the sixth year, the sales started increasing gradually.

Business report to the Chief Executive

The business operation involves all the important aspects that are crucial to the success and growth of the company. To achieve the high level of sales and profit margins, the firm has to take care of many other aspects. The costs must be lowered and the expenditures must be done under controlled budget. The data of Goohgle Plc's marketing expenditure, sales revenue and profit levels over the last eight years has shown that the company has achieved high level of sales in the year eight, but there are also some negative facts.

There is always a relationship between the sales and the marketing expenditure because the marketing expenditure allows the company to increase its level of sales and the profit margin. From the analysis of the data of Goohgle Plc, some negative aspects have also found. It has found that the sales in the year 8 have increased to a great level but the profits have not increased. The reason of this is that the company has increased its marketing expenditure to increase the level of sales. The increase in expenditure has further reduced the profits.

Therefore the financial report of Goohgle Plc for the year 8 is not effective. The company will have to develop certain effective and efficient policies and strategies so as to reduce the costs and expenditures and to improve the level of sales as well as profit ...