Exercises: Analysis of results

Explain what market research is and the difference between primary sources (own surveys and interviews) and secondary sources (already published statistics and reports), with one advantage of each type.

In a company's income statement, the following appear: sales $90.000\ \text{€}$, purchases $40.000\ \text{€}$, wages $25.000\ \text{€}$, and other expenses $10.000\ \text{€}$. Calculate the profit or loss for the financial year and interpret its sign in one sentence.

The diagram compares a company's revenue and expenses over two years. Calculate the profit or loss for each year and explain what happened between them: why does the net result worsen if revenue increases?

In a shop's income statement the following appear: sales $50.000\ \text{€}$, purchases $20.000\ \text{€}$, salaries $15.000\ \text{€}$ and other expenses $5.000\ \text{€}$. a) Calculate the profit for the financial year. b) Interpret its sign and reason whether the situation is sustainable without changes.

Explain what a key indicator or KPI is and propose three useful KPIs for an online shop (for example, orders per week, average basket, percentage of abandoned carts), stating which question each one answers.

A company budgeted sales of $30.000\ \text{€}$ and has sold $27.000\ \text{€}$. a) Calculate the variance in euros and as a percentage of the forecast. b) Explain why analysing variances helps correct the course in time.

In a questionnaire, distinguish between an open question and a closed question, give an example of each for a gym's market research and explain what type of information each one gives.

Explain with a simple numerical example why earning a lot of revenue is not the same as making a lot of profit: one company turns over $100.000\ \text{€}$ with expenses of $98.000\ \text{€}$ and another turns over $40.000\ \text{€}$ with expenses of $25.000\ \text{€}$.

In a survey of 200 people in a town, 64 state that they would pay for a door-to-door laundry collection service. a) Calculate the percentage of interested people. b) Reason what two additional questions you would ask before relying on this data to make an investment (price they would pay, frequency of use, how the sample was selected).

A company increased its revenue by 10% over two years, but its profit fell by half. Propose two possible explanations (increase in costs, decrease in prices to gain market share) and explain which items in the income statement you would inspect to confirm each one.

Profit margin on sales is calculated as $\text{margin} = \frac{\text{profit}}{\text{revenue}} \cdot 100$. Company A generates revenue of $200.000\ \text{€}$ and makes a profit of $20.000\ \text{€}$; Company B generates revenue of $80.000\ \text{€}$ and makes a profit of $12.000\ \text{€}$. a) Calculate the margin of each company. b) Reason which company is more efficient at turning sales into profit and why looking only at absolute profit can be misleading.

A company went from earning $80.000\ \text{€}$ with expenses of $70.000\ \text{€}$ (year 1) to earning $95.000\ \text{€}$ with expenses of $92.000\ \text{€}$ (year 2). a) Calculate the result of each year. b) Explain what has happened between the two years and which specific items you would review to understand it.

For a recipe app, explain why retention (percentage of users who come back the following week) is a more useful KPI than accumulated downloads, and propose another retention KPI that would complete the analysis.

A shop surveys only its current customers about whether it would open a second shop in the other neighbourhood, and 90% say yes. Explain what bias that sample has, why the figure is unreliable for the decision and how you would improve the study (whom to ask and where).

Company A sells 1 000 units a year at $10\ \text{€}$ with a margin of $2\ \text{€}$ per unit; company B sells 200 units at $40\ \text{€}$ with a margin of $15\ \text{€}$ per unit. a) Calculate the revenue and profit of each. b) Comment on what strategy each company follows (volume versus margin) and one risk of each model.

Design a simple dashboard for a coffee shop: choose four indicators (daily sales, average ticket, product waste, customer rating), define how often each one is reviewed and who is responsible for looking at it and acting.

A company has total assets of $180.000\ \text{€}$ financed with liabilities of $120.000\ \text{€}$ (75 % of which are short-term) and equity of $60.000\ \text{€}$. In the last financial year, it generated sales revenue of $150.000\ \text{€}$ and total expenses of $140.000\ \text{€}$. Its managing director states: «The year has been a resounding success: we have profits and equity is positive, so we can borrow another $40.000\ \text{€}$ to open a branch». a) Refute the director's statement by jointly assessing the return on sales and the company's debt and liquidity structure. b) Justify what consequences taking out this new loan would have and propose two financial measures that the company should prioritize to clean up its balance sheet.

“Growing in sales is always good news for any company.” Refute this statement with reasoned arguments: a) Justify through which economic and financial mechanism a rapid increase in sales can lead to the technical bankruptcy or suspension of payments of a business (relate in your explanation the cash conversion cycle, working capital requirements, and the collection and payment structure). b) If you were the chief financial officer, which two balance sheet or treasury indicators would you monitor to detect this risk before a liquidity crisis occurs? Justify your answer.

Design a mini market research study to validate opening a zero-waste refill shop in your town: define the objective of the study, the sample (who to ask and how many), five key questionnaire questions, and how you would analyse the responses to make a decision.

"VerdeBox" sells seasonal vegetable boxes by subscription. It expected to sell 300 boxes a month at $25\ \text{€}$ with costs of $6.000\ \text{€}$, but it has sold 240 boxes with costs of $5.800\ \text{€}$. a) Calculate the expected result and the actual one. b) Break down the variance in the result into the part due to sales and the part due to costs. c) Propose two possible causes of the variance and one corrective measure.

A company decides to apply an aggressive penetration strategy by reducing its sales prices by 25 %. Thanks to this, it manages to double the volume of units sold, but its profit for the year goes from a net profit of $10.000\ \text{€}$ to a loss of $5.000\ \text{€}$. a) Economically justify how it is possible that selling twice as much leads to losses (analyze the impact on the unit contribution margin, the break-even point, and the structure of fixed and variable costs). b) Propose two management indicators that would have allowed management to anticipate this outcome before closing the financial year.

A restaurant analyzes its sales from the last quarter and finds that 60 % of its total profit comes from only 25 % of the dishes on its menu, while half of the dishes offered barely cover costs or generate losses. a) Interpret this fact based on the asymmetric distribution principle applicable to business management and explain the operational and economic risks of maintaining an excessively wide menu with low-turnover dishes. b) Justify three specific strategic decisions (regarding pricing, menu engineering, or purchasing management) that management should adopt to maximize its profit based on these data.

Design a mini market study to assess opening a self-service launderette in a neighbourhood: define the study's objective, the sample (whom to ask and how many people), five key questionnaire questions and how you would analyse the results to make the decision.

“Numbers don't lie; therefore, any management report presenting actual figures guarantees objective and true conclusions.” a) Critically refute this statement: explain through two specific business situations how truthful quantitative data can be manipulated or misinterpreted to lead to false conclusions about the company's performance. b) Design three methodological criteria or best practices that a performance analysis must meet to be rigorous and reliable in decision-making.

Unit challenge. Imagine you are going to launch «EcoPausa», a school healthy snack service. Your mission is to make a well-founded decision to launch or discard the project through scenario simulation and critical analysis of results.

1. Real data collection: Check the latest monthly variation of the food CPI on the INE website to estimate realistic costs and carry out a quick survey with 10 classmates about their willingness to pay ($2,00$ € versus $3,20$ € per set meal).

2. Scenario simulation: Model three situations (pessimistic, realistic, and optimistic) in a table, varying demand and prices. Assign estimated fixed costs ($CF = 50$ €/month) and calculate the profit ($\text{Profit} = IT - CT$) and the break-even point for each scenario: $Q^* = \frac{CF}{P - CV_u}$.

3. Analysis and executive decision: Prepare a brief report (one page) with the comparative table. Analyse the sensitivity of the project to a $15\,\%$ drop in expected sales and present your reasoned final decision based on acceptable risk.

Assessment criteria:

• Rigour in the mathematical calculation of the break-even point and the scenario simulation.

• Consistency in estimating variables from the data obtained (INE and survey).

• Analytical ability and economic justification in the final decision-making.