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Brant Freezer Company is engaged in manufacturing and distribution of industrial freezers of all sizes. Their distribution is channeled through government-owned warehouses, located in Boston, Atlanta, Denver, Chicago, Los Angeles, Portland, St. Louis, and an additional space located within the company in Fargo. This is a family-owned business, and it is run by the father and son.

Financial analysis is the process, which involves reviewing and evaluating of a companys accounting records to ascertain a deeper understanding of its financial status. In the case of Brant Freezer Company, the analysis is on units shipped in relation to the warehouse costs. In Atlanta, the year 2009 shows that 4,080 units were shipped against a cost of $35,890 in comparison to 2010, where 4,035 units were shipped against a cost of $40,228. This shows an increase in warehouse costs with a slight drop in units shipped. In Boston, the year 2009 showed 3061 units shipped against a cost of $27,915 in comparison to year 2010, where 3,119 units were shipped against a cost of $29,416. This indicates a rise in units shipped with only a slight increase in warehousing costs. In Chicago, the year 2009 shows that 14,621 units were shipped at a cost of $131,618 in contrast to the year 2010, where units shipped amounted to 15,230 at a cost of $141,222. It also shows a relatively higher increase in units shipped compared to slightly lower increase in warehouse costs.

In Denver, in the year 2009, 1,005 units were shipped at a cost of $8,600 in comparison to the year 2010 where 1,421 units were shipped at a cost of $14,900. It indicates a very high increase in units shipped and a slightly lower increase in the warehouse costs. In Fargo, the year 2009 shows 980 units shipped at a cost of $8,883 in comparison with the year 2010, where 804 units were shipped at a cost of $ 9,605. It is considered as a drop in the units shipped, compared to an increase in the warehouse costs. In Los Angels, the year 2009 shows that 11, 431 units were shipped at a cost of $109,690 in comparison with the year 2010, where units shipped were 9,444 at a cost of $93,280. This shows a drop in units shipped but an increase in the warehousing costs. In Portland, the year 2009 shows that 4,028 units were shipped at a cost of $36,021 in comparison to year 2010 where units shipped were 4,600 at a cost of $42,616. Hence, it shows a significant increase in the units shipped, but a slightly lower increase in the costs of warehousing.

Lastly, in St. Louis warehouse, the year 2009 shows 2,331 units shipped at a cost of $23,232, whereas in 2010, it shows a total of 2,116 units shipped at a cost of $19,191. Overall, it shows a drop in the number of units shipped and reduced warehousing costs.

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From the above information, the warehouse, which has greatly shown improvement, is the one of Chicago. The warehouse had increased its number of units shipped to 609, compared to an increase in the cost of warehousing per unit by 0.27. The further information shows that in terms of shipment, Chicago was able to ship more industrial freezers than other warehouses. However, it also had the lowest increment in the costs of warehousing. This means that doing business in Chicago can enable one ship more freezers and incur lesser warehousing costs. Therefore, it is a viable business destination.

Budgeting and Forecasting

The figures projected for the next six months up to the end of the financial year 2010 are as follows:

A

B

C

D

E

F

G

H

I

J

K

L

 

Units shipped

Units shipped

 

Warehouse costs

Warehouse cost

Units shipped

Warehouse Costs

Warehouse costs

Warehouse costs

Projected units to be shipped

Projected warehouse costs

 

12 months Jan-Dec

5 months through May 31

% of Shipment up to May 31 Compared to the whole year

12 months January-December

Cost per unit 12 months January-December

5 months through May31

5 months through May 31

Cost per unit 5 months through May 31

Average cost per unit

Months to December

Months to December

Atlanta

17,431

4,080

23

156,830

8.9

4035

40228

10

9.4

13,273

125,882

Boston

6,920

3,061

44

63,417

9.2

3119

29416

9.4

9.2

3,948

36713

Chicago

28,104

14,621

52

246,315

8.7

15230

141222

9.3

9.

14,051

126,726

Denver

3,021

1,005

33

28,019

9.3

1421

14900

10.5

9.9

2,819

27,853

Fargo

2,016

980

49

16,411

8.1

804

9605

12

10

843

8,471

Los Angeles

16,491

11,431

69

151,975

9.2

9444

93280

9.9

9.5

4087

39,019

Portland

8,333

4,028

48

73,015

8.7

4600

42616

9.3

9

4853

43,744

St.Louis

5,921

2,331

39

51,819

8.8

2116

19191

9.1

8.9

3224

28,736

Explanation

In order to arrive at the projected figures, it is necessary to calculate the past years warehouse cost per unit for each of the state. Next, one should find a comparative analysis or percentage of units shipped for the prior period, compared to the total units shipped for the whole year with the assumption that the business of shipment is consistent throughout the year. After finding the percentage of units shipped for the first five months compared to the full year, the same performance in the next year is assumed. Units shipped for 2009 up to May 31st and 2010 up to May 31st shows consistency. It indicates that the business is graduating. In order to have a stronger analysis, one should calculate the average warehouse cost per unit for the two periods, which are multiplied with the projected units in order to arrive at the warehouse cost.

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