1. Overview of Expected Results
The results expected for the 2018 calendar year for Sun Worship Leisure Wear include:
Sales Income $2,242,500
Cost of Goods Sold $1,509,874
Operating Expenses $ 81,900
Net Income $ 650,726
Should the expected results be realised, Sun Worship Leisure Wear will have achieved a 29% profit margin, indicating positive financial efficiency and stability.
Additionally, it is budgeted that Sun Worship Leisure Wear will have having produced 27,470 units, sold 27,340 units and at the conclusion of 2018, Sun Worship Leisure Wear will have a cash surplus of $499,252,
2. Product Analysis
The Bikini line has the most positive contribution margin at 36.11%, both the Board Short and Towels lines are also …show more content…
One of the major trends affecting the retail apparel industry is the increase in consumers shopping for apparel on the Internet from the comfort of their home rather than shopping at a traditional brick-and-mortar store. Emerging technology such as mobile applications are changing the way retailers do business. As such, companies such as Sun Worship Leisure Wear must embrace the growing markets, in the current market this means embracing internet sales dollars, and increasing our online …show more content…
Summary of Recommendations
As we look forward to 2018, based on the budget forecasts the following recommendations are submitted for the board to consider.
With regards to the products currently being produced, the Bag line is estimated to run at a negative contribution margin of -8.1%, I recommend investigating if this is product line contributes to sales of other products or if costs can be improved. If not, I recommend that Sun Worship Leisure Wear drop the Bag line from production.
With regards to the cash surplus, Sun Worship Leisure Wear should determine a fixed cash balance level, any surplus should then be used to pay down the loan, which in will eliminate the monthly interest payments therefore reducing fixed costs. A cash surplus can also be used to pay dividends to shareholders, however it is recommended that the loan be paid down in full before dividends are considered.
With regards to the market in 2018 its recommended that Sun Worship Leisure Wear expand their online presence by expanding their online store, and investigating the cost on online platform advertising, to tap into the online
The results expected for the 2018 calendar year for Sun Worship Leisure Wear include:
Sales Income $2,242,500
Cost of Goods Sold $1,509,874
Operating Expenses $ 81,900
Net Income $ 650,726
Should the expected results be realised, Sun Worship Leisure Wear will have achieved a 29% profit margin, indicating positive financial efficiency and stability.
Additionally, it is budgeted that Sun Worship Leisure Wear will have having produced 27,470 units, sold 27,340 units and at the conclusion of 2018, Sun Worship Leisure Wear will have a cash surplus of $499,252,
2. Product Analysis
The Bikini line has the most positive contribution margin at 36.11%, both the Board Short and Towels lines are also …show more content…
One of the major trends affecting the retail apparel industry is the increase in consumers shopping for apparel on the Internet from the comfort of their home rather than shopping at a traditional brick-and-mortar store. Emerging technology such as mobile applications are changing the way retailers do business. As such, companies such as Sun Worship Leisure Wear must embrace the growing markets, in the current market this means embracing internet sales dollars, and increasing our online …show more content…
Summary of Recommendations
As we look forward to 2018, based on the budget forecasts the following recommendations are submitted for the board to consider.
With regards to the products currently being produced, the Bag line is estimated to run at a negative contribution margin of -8.1%, I recommend investigating if this is product line contributes to sales of other products or if costs can be improved. If not, I recommend that Sun Worship Leisure Wear drop the Bag line from production.
With regards to the cash surplus, Sun Worship Leisure Wear should determine a fixed cash balance level, any surplus should then be used to pay down the loan, which in will eliminate the monthly interest payments therefore reducing fixed costs. A cash surplus can also be used to pay dividends to shareholders, however it is recommended that the loan be paid down in full before dividends are considered.
With regards to the market in 2018 its recommended that Sun Worship Leisure Wear expand their online presence by expanding their online store, and investigating the cost on online platform advertising, to tap into the online