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FRM130_FinalProject.pdf

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Final Project: Annie’s on Broadway Overview Final project will be a scenario-based study of “Annie’s on Broadway“, a retail boutique, which is owned and operated on a sole-proprietorship mode. This retail boutique will be used as a model to gain practical understanding of the retail math concepts learned in the online lecture. Each week, starting Week 1 and concluding Week 6, the studentswill be introduced to new dimensions of the scenario — this will guide students to real-life problems faced b
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  FRM130_Retail Math Final Project© 2006 The Art Institute of Pittsburgh - Online Division Final Project:  Annie’s on Broadway  Overview Final project will be a scenario-based study of “  Annie’s on Broadway  “, a retail boutique, which is owned and operated on a sole-proprietorship mode.This retail boutique will be usedas a model to gain practical understanding of the retail math concepts learned in the online lecture.Each week, starting Week 1  and concluding Week 6 , the students will be introduced to new dimensions of the scenario — this will guide students to real-life problems faced by businessprofessionals. Students will create and utilize skeletal profit and loss statements covering a oneyear business cycle at “  Annie’s on Broadway  ”, which will enable them to create a comprehensive profitability study of the retail boutique. Each week, students will create a quarterly skeletal profit and loss statement and perform quarter-relevant tasks, such as explaining how net profit has been influenced by the various parameters mentioned in the scenario, analyzing what could have been done to offset losses in profit, identifying areas where the loss might occur, and suggesting plan of action to improve profits. Wrap-up activity for the final project will reflect a one-year quarter-by-quarter analysis of the fiscal year (2005) at “  Annie’s on Broadway  “. This analysis will be done as a compare and contrast study against the first year of business (2004). Each skeletal profit and loss statement will be presented in dollars and percentages and students will be asked to create a trend and profit analysis of the year 2005, which will include suggested strategies for maintaining profitability over the next year of operations. Students will also complete a year-end profit performance analysis of “  Annie’s on Broadway  ”detailing trend analysis in key profit and loss performance areas: net sales, gross margin, operating expenses, net profit or loss, and average markup attained for the entire fiscal year ending December 31, 2005. This report will alsoinclude a written analysis pointing out strategies the owner should continue/discontinue/augment/adopt to be more profitable in the year to come. Students will base these decisions on the financial data generated for the retail boutique during the 2005 business cycle.  FRM130_Retail MathFinal Project© 2006 The Art Institute of Pittsburgh - Online Division Scenario On January 1, 2005, Annie Franklin opened the doors of her newly relocated boutique “  Annie’son Broadway  ” in the downtown Westlake Center shopping district mall in Seattle. “  Annie’s on Broadway  ” is a retail boutique stocking women’s fashions in Moderate to Bridge price range. Prior to this move, Annie rented a small retail space in downtown Redmond, WA. This is her second year of operation, with her first year efforts yielding 4 percent net profit on total sales of $497,000, based on markup of 62.4 percent. These financial statistics were good enough to apply for and receive a loan from the Small Business Association (SBA). With the SBA loan and her personal savings from 15 years of working as a buyer for Nordstrom, Annie was capable of raising the requisite capital to acquire a prime location on the fourth floor, among other non-competingclothing and women’s accessory boutiques in the mall. Annie opened her business with three employees, not including her; she has opted not to take salary for first three years. One of the full-time employees was salaried at $36,000 yearly, and the other two part-time employees were paid $10.00 per hour and were employed 30 hours per week. All salaries are net figures.The following figures apply to first quarter of “  Annie’s on Broadway  ” operations ending March 31, 2005. ( Note : All figures given are three-month totals unless noted otherwise.) $Gross sales185,500.00Customer returns and allowances8,000.00Billed COGS71,500.00Inbound freight700.00Cash discounts taken2%Rent45,000.00 Advertising6,000.00Wages (13 weeks)19,400.00General overhead (utilities, office supplies)10,500.00Insurance18,600.00Weekly sales meeting refreshments (13 weeks total)1000.00Maintenance service2,800.00Security guard service (not supplied by mall)4,000.00

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DSA00165185.pdf

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