Tahmid H.

asked • 12d

Rank in order (Highest to Lowest) change in operating expenses from year 1 to year 2

Question: Rank in order from highest (1) to lowest (5) in terms of the change in operating expenses

Key: m = million

operating expenses:

A - year1=12.8m & year2=9.9m

B - year1=25.1m & year2=46.4m

C - year1=32.8m & year2=35.6m

D - year1=50.6m & year2=48.8m

E - year1=33.9m & year2=53m


My answer:

1) A

2) D

3) C

4) E

5) B

Is that order correct?

or should it be the biggest change first which B a change if +21.3m.



Is the change in op. Expenses for A from year 1 to year 2 a positive one and if so would that rank higher than B ,which the op. Expenses went up.

I do not know whether I should work out the percentage change from year 1 to year 2 then rank it or just the difference in the figure change from year 1 to year 2 according to the question asked.

Would really appreciate someone's help. Thanks in advance.


1 Expert Answer

By:

Lenny D. answered • 11d

Financial Professional with many years of Wall Street Experience

Tahmid H.

I do have all the revenue and sales figures however, the question does not really ask about linking it to profitability. I assume the this question is just asking purely about change in operating expenses, that is what I assume anyways. Do you think that's the case here?
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11d

Tahmid H.

And the question is all regarding 1 company; A, B,C,D and E are all different departments within 1 company.
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11d

Lenny D.

tutor
That sheds a little bit more light on the subject. What we really want to do then is that up the total cost by Department and see what's happened to the share of total cost for each department I can put that together in a spreadsheet with no problem
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11d

Tahmid H.

Revenues have changed for all departments from year 1 to year 2, but from the point of view of this question as it doesn't mention anything regarding revenue/profits do we have to take the revenue/profits into account, I'm not quite sure. Now A being the lowest, isn't D lower than A as there's been a bigger change in department A -2.9 compared td department D's -1.8m
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11d

Tahmid H.

So GWE is the name of the company and the full question is as follows: 'To better understand the existing expenses of GWE, RANK ORDER the business areas from highest (1) to lowest (5) in terms of the change in operating expenses from year to year 2' ^That is how its exactly worded.
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11d

Lenny D.

tutor
Best thing to do is put together a spreadsheet and you'll see that yes for division d their share of expenses in year 1 was 32.6 percent and now it drops to 25.19% well division a drop from 8 in a quarter percent to 5.11%.. so ranking it in terms of share of expense. so ranking it in terms of share of expense division Dee has actually been better
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11d

Lenny D.

tutor
Pardon the typos I was dictating over my phone
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11d

Tahmid H.

From the exactly worded question I stated in the comment before would you advise to answer this question from purely the change in op. Expenses from year 1 to year 2 or should I take into account the Revenue figures also?
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11d

Tahmid H.

Thank you for your help, very much appreciated!
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11d

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