Individual Assignment Anthonys Orchard Case Study

Financial analysis Anthony’s OrchardNameTutor’s Name17/08/20161.Review the Financial StatementsAnthony’s Orchard is in a healthy financial state because it has a diversified business. The Prepared Apple group generates 60% of revenues. Pick Your Own Apples and Community Events each generate 20% of total sales. Assuming that Pick Your Own Apples and Community Events are not on order customer orders would be restricted to the Prepared Apple group, which makes up about 60% of the total revenue. This means should a major customer cancel expected large orders the effect would be restricted to 60% of the total revenue as opposed to 100% of the revenue. This means diversification of revenue streams is useful to Anthony’s Orchard as a method of hedging against the risk of revenue fluctuation. Suppose the cancelled order result in a 15% drop in the earnings of the Prepared Apple business unit (Cliffs notes ). The impact on the total revenue would be about 9%. Labor cost accounts for 15% of the cost of goods sold in the Prepared Apple group and about 10% of the total cost of sales. This is a healthy ratio, which indicates that