[Business Organization and Intellectual Property] Phil Young, founder of the Pedal Pushers Company, has developed several prototypes of a pedal replacement for children’s bicycles. The Pedal Pusher will replace existing bicycle pedals with an easy-release stirrup to help smaller children hold their feet on the pedals. The Pedal Pusher will glow in the dark and will provide a musical sound as the bicycle is pedaled.
Phil plans to purchase materials for making the product from others, assemble the products at the venture’s facilities, and hire product sales representatives to sell the Pedal Pushers through local retail and discount stores that sell children’s bicycles. Phil will need to purchase plastic pedals and extensions, ...view middle of the document...
As for the materials they aren’t hard to buy nor are they expensive. Phil is going to take the grunt of the liability but in the beginning stage they are low costs and the risk is not high.
• B. Phil is concerned about trying to protect the intellectual property embedded in his Pedal Pusher product idea and prototype. How might Phil consider protecting his intellectual property?
I would recommend Phil a patent. If patenting Phil’s product ends up being too expensive Phil could consider doing a trademark, although a patent would provide more protection for Phil’s product.
• Calculate the inventory-to-sale conversion period for 2010.
Cost Of Goods sold / 365
400,000 + 500,000 / 2
________________ = 450,000 / 2465.75 = 182.5 days
• B. Calculate the sale-to-cash conversion period for 2010.
• C. Calculate the purchase-to-payment conversion period for 2010.
• D. Determine the length of Castillo Products’ cash conversion cycle for 2010.
[ROA Model and Expenses Related to Sales] Use the financial statement data for Castillo Products presented in Problem 7.
• A. Calculate the net profit margin in 2009 and 2010 and the sales-to-total-assets ratio using year-end data for each of the two years.
• B. Use your calculations from Part A to determine the rate of return on assets in each of the two years for Castillo Products.
• C. Calculate the percentage growth in net sales from 2009 to 2010. Compare this with the percentage change in total assets for the same period.
• D. Express each expense item as a percentage of net sales for both 2009 and 2010. Describe what happened that allowed Castillo Products to move from a loss to a profit between the two years.