Company Financials and Employee Strength

CAT 2022 Slot 2 · DILR · Medium · Data Interpretation

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Passage / data set

The two plots show data for four companies code-named A, B, C, and D over three years - 2019, 2020, and 2021.

Plot 1: Revenues and Costs (in Rs. crores)

  • A (2019): Revenue = 90, Cost = 85 | A (2020): Revenue = 90, Cost = 65 | A (2021): Revenue = 60, Cost = 30
  • B (2019): Revenue = 100, Cost = 75 | B (2020): Revenue = 90, Cost = 40 | B (2021): Revenue = 30, Cost = 30
  • C (2019): Revenue = 35, Cost = 20 | C (2020): Revenue = 70, Cost = 60 | C (2021): Revenue = 100, Cost = 30
  • D (2019): Revenue = 50, Cost = 40 | D (2020): Revenue = 20, Cost = 50 | D (2021): Revenue = 70, Cost = 70

Plot 2: Employee Strength at Start of Year & New Hires

  • A (2019): Strength = 150, Hires = 20 | A (2020): Strength = 150, Hires = 35 | A (2021): Strength = 150, Hires = 25
  • B (2019): Strength = 210, Hires = 35 | B (2020): Strength = 240, Hires = 45 | B (2021): Strength = 250, Hires = 30
  • C (2019): Strength = 325, Hires = 45 | C (2020): Strength = 325, Hires = 40 | C (2021): Strength = 325, Hires = 35
  • D (2019): Strength = 400, Hires = 30 | D (2020): Strength = 410, Hires = 35 | D (2021): Strength = 350, Hires = 40

Question 1 of 5

Considering all three years, which company had the highest annual profit?

  1. A.

    Company C

  2. B.

    Company B

  3. C.

    Company A

  4. D.

    Company D

Answer

A

Explanation

Profit = Revenue - Cost.

  • Company C in 2021: Revenue = 100, Cost = 30   ⟹  \implies Profit = 70 crores. Checking other max profits:
  • B in 2020: 90−40=5090 - 40 = 50
  • A in 2021: 60−30=3060 - 30 = 30 Company C achieved the highest annual profit (70 crores in 2021).

Question 2 of 5

Which of the four companies experienced the highest annual loss in any of the years?

  1. A.

    Company D

  2. B.

    Company C

  3. C.

    Company A

  4. D.

    Company B

Answer

A

Explanation

Loss = Cost - Revenue (when Cost > Revenue).

  • Company D in 2020: Revenue = 20, Cost = 50   ⟹  \implies Loss = 30 crores. No other company had a higher loss in any year. Therefore, Company D experienced the highest annual loss.

Question 3 of 5

The ratio of a company's annual profit to its annual costs is a measure of its performance. Which of the four companies had the lowest value of this ratio in 2019?

  1. A.

    Company A

  2. B.

    Company B

  3. C.

    Company C

  4. D.

    Company D

Answer

A

Explanation

Profit / Cost ratio in 2019:

  • Company A: Profit = 90−85=590 - 85 = 5, Cost = 85   ⟹  5/85≈0.0588\implies 5 / 85 \approx 0.0588
  • Company B: Profit = 100−75=25100 - 75 = 25, Cost = 75   ⟹  25/75=0.333\implies 25 / 75 = 0.333
  • Company C: Profit = 35−20=1535 - 20 = 15, Cost = 20   ⟹  15/20=0.75\implies 15 / 20 = 0.75
  • Company D: Profit = 50−40=1050 - 40 = 10, Cost = 40   ⟹  10/40=0.25\implies 10 / 40 = 0.25

Company A had the lowest ratio in 2019.

Question 4 of 5

The total number of employees lost in 2019 and 2020 was the least for:

  1. A.

    Company A

  2. B.

    Company C

  3. C.

    Company B

  4. D.

    Company D

Answer

C

Explanation

Employees lost in year = (Start strength + New hires) - Next year start strength.

For 2019:

  • A: (150+20)−150=20(150 + 20) - 150 = 20
  • B: (210+35)−240=5(210 + 35) - 240 = 5
  • C: (325+45)−325=45(325 + 45) - 325 = 45
  • D: (400+30)−410=20(400 + 30) - 410 = 20

For 2020:

  • A: (150+35)−150=35(150 + 35) - 150 = 35
  • B: (240+45)−250=35(240 + 45) - 250 = 35
  • C: (325+40)−325=40(325 + 40) - 325 = 40
  • D: (410+35)−350=95(410 + 35) - 350 = 95

Total lost in 2019 + 2020:

  • A: 20+35=5520 + 35 = 55
  • B: 5+35=405 + 35 = 40
  • C: 45+40=8545 + 40 = 85
  • D: 20+95=11520 + 95 = 115

Company B lost the least number of employees (40).

Question 5 of 5

Profit per employee is the ratio of a company's profit to its employee strength. For this purpose, the employee strength in a year is the average of the employee strength at the beginning of that year and the beginning of the next year. In 2020, which of the four companies had the highest profit per employee?

  1. A.

    Company B

  2. B.

    Company A

  3. C.

    Company D

  4. D.

    Company C

Answer

A

Explanation

In 2020: Average employee strength = Strength(2020)+Strength(2021)2\frac{\text{Strength}(2020) + \text{Strength}(2021)}{2}

  • Company A: Avg strength = (150+150)/2=150(150 + 150)/2 = 150. Profit = 90−65=2590 - 65 = 25. Ratio = 25/150=0.16725 / 150 = 0.167
  • Company B: Avg strength = (240+250)/2=245(240 + 250)/2 = 245. Profit = 90−40=5090 - 40 = 50. Ratio = 50/245≈0.20450 / 245 \approx 0.204
  • Company C: Avg strength = (325+325)/2=325(325 + 325)/2 = 325. Profit = 70−60=1070 - 60 = 10. Ratio = 10/325≈0.03110 / 325 \approx 0.031
  • Company D: Profit = 20−50=−3020 - 50 = -30 (loss).

Company B had the highest profit per employee in 2020.

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