Accounting 242 Project

Group 2:
Siqi Li Connor Caruso Ryan Maack Lindsey Koppy Michael Fischer

Identity Sign Group

Materials/Labor tracking
Microsoft Excel Time cards

Profitability
Done by operating income Occasional losses due to misquotes, etc.

Budgets
Done by running tally

Identity Sign Group

Investment Decisions
Real Estate New/updated equipment

Performance Rewards
New leads Christmas bonus Company Culture

Identity Sign Group-- Suggestions

Implement a set budget
Allows for financial forecasting
Establishes constraints No real drawbacks

Take more care with mixing Personal and Corporate finances

Working so far, but could be an issue in the future Blurred line

Cambridge Publishing
PICTURE

Cambridge Publishing Revenue & Expenses

Most of the revenue is selling text books to professors/educators/schools
Marketing technological based learning interface

E-books
Online Homework Used books, rental stores, online sources affect sales Royalties

Edition 1
Qty Amount % of Sales Qty

Edition 2
Amount % of Sales Qty

Edition 3
Amount % of Sales Qty

Edition 4
Amount % of Sales

TOTAL REVENUE Accuracy Check Design and Photos Composition

15 0

9,000.00 6,000.00 1,500.00 11,000.0 0

9,40 0

Editing
Printing Other CGS

9,800.00
9,500.00 1,000.00 38,800.0 0 431.1% 29,800.0 0 -331.1% 1,200.00 6,000.00 1,000.00 0.00 0.00 1,300.00

776,000. 00 15,400.0 0 17,000.0 0 16,100.0 0 11,000.0 0 178,000. 00 4,000.00 241,500. 00 534,500. 00 6,000.00 30,000.0 0 7,700.00 12,000.0 0 1,200.00 198,000. 00 254,900. 00 279,600. 00

12,90 0

1,259,800. 00 13,600.00 6,600.00 19,000.00

16,72 5

2,017,200. 00 28,000.00 6,900.00 41,000.00

31.1%

12,400.00 192,100.0 0 2,600.00 246,300.0 0

1,013,500. 00 8,200.00 17,600.00 12,200.00 14,700.00 2,600.00 311,100.0 0 366,400.0 0 647,100.0 0

19.6%

14,400.00 250,000.0 0 6,000.00 346,300.0 0

1,670,900. 00 29,800.00 17,100.00 11,000.00 13,300.00 4,100.00 525,000.0 0 600,300.0 0 1,070,600. 00

17.2%

GROSS PROFIT Other Expenses: Complimentary Books Reviewers/Focus Groups Marketing Homework System Website Development Royalty Expense

68.9%

80.4%

82.8%

TOTAL OTHER EXPENSES

PROFIT

9,500.00 105.6% 39,300.0 0 -436.7%

32.8%

29.1%

29.8%

36.0%

51.4%

53.1%

Cambridge Publishing
Direct Labor Employee Rewards Programs
Ext. 1103 Rep 1 1105 Rep 2 1106 Rep 3 Rep # of Calls 121 10 71 YTD calls 957 250 528 Hours 30 2.5 22 Calls/Hour 4.0 4.0 3.2 YTD hours 240 61.75 174.75 YTD Calls/Hour 4.0 4.0 3.0

1109 Rep 4
1111 Rep 5 1112 Rep 6 1114 Rep 7 TOTALS

68
69 103 68 510

705
372 1278 820 4910

19
15 23 20.5 132.0

3.6
4.6 4.5 3.3 3.9

169.25
141.5 267.5 196.5 1251.25

4.2
2.6 4.8 4.2 3.9

Cambridge Publishing
Investment Decisions
Recently purchased a new building

Outsourcing

Budgets
No set budget system in place

2012 Annual Office Rent Annual Storage Expense Total Annual Rent Interest Max Loan $ 51,692 14,979 66,671.00 4.70% $ 1,418,531.91

Max Loan Expected cost to build out Max willing to pay for building

$ 1,418,531.91 $ 470,000.00 $ 948,531.91

Cambridge Publishing Suggestions

Implement an effective budgeting system
Plan for growth No real drawbacks

Move from a call center model to a Sales Meeting model

Targets resources to use more effectively Significantly higher overhead involved

Comparison
Cambridge Publishing Special Orders Identity Sign Group Custom Orders

Performance Evaluation
Capital Investment Lack of Budget Outsourcing

Performance Evaluation
Capital Investment Lack of Budget Self Manufacturing

Questions
If Identity Sign Group part of larger corporation and needed to be evaluated, would ROI or RI be more useful in general? Why? What are the benefits and drawbacks of each method?
How might the advent of E-Books affect Cambridge Publishing with regards to material, labor, and overhead?