Small Business Management, 17th Edition CASE 11: Ashley Palmer Clothing, Inc.: F
ID: 2574193 • Letter: S
Question
Small Business Management, 17th Edition CASE 11: Ashley Palmer Clothing, Inc.: Financial Forecasting Ashley Palmer Clothing, Inc, produces dresses for women. The firm was launched in June 2009 by Ashley Jantz and Amanda Palmer, both graduates of Boston College. Ashley Palmer designs apparel for the modern woman's shape rather than using the traditional standard sizing. History of Sizing Clothing In 1939, the National Bureau of Home Economics of the U.S. Department of Agriculture was charged with standardizing sizing for women's clothing. Over a two-year period, some 15,000 women were given full-body measurements. This system created the sizing system that is still in use today Studies have found that the average body proportions of American women when the sizing charts were created are different from the body proportions of today's wom American women in 1939 were markedly more slender and shorter. The result is that it is difficult for some women to find clothing that fits well In the Sepfember 2009 issue of Fashionista Magazine, Jantz, who stands six feet tall, said. Wle were tired of not finding the clothes that were the right fit so we decided it would be a good venture to create products for today's women based on bust measurement, cup size and torso length The Opportunity For Jantz and Palmer, this problem represented an opportunity. After considerable research, they decided to start a business that produced fitted clothing for today's young women. They recruited a young up-and-coming fashion designer, Joy Lee, who had experience in apparel design for several major women's clothing brands. Seven months after starting the business, they offered their first dresses for sale online. Then, in early 2010, the firm began supplying clothes to two well-known high-end retailers. Within a year after becoming a supplier to these exclusive retail outlets, the company's production orders had more than doubled. In order to keep up, the firm added five more team 663Explanation / Answer
ADJUST
$ 000’S
ESTIMATE
2014 $ 000’S
SALES
4700 X 150%
7050
COS
7050 X 82.5%
5816
GP
1234
MARKETING
7050 X 5.9%
416
GEN & ADMIN
130
DEP
280/14
20
(566)
OPERATING PROFIT
668
INTEREST
45
PBT
623
TAX
249
PAT
374
DIVIDENDS
30
RETAINED EARNING
344
BALANCE SHEET 2014 ( PROJECTION)
$ 000’S
$ 000’S
PLANT & EQUIPMENT
280 - 20
260
INVENTORY
.17411 X SALES
ACC REC
CASH
1227
1487
DEBT LIABILITIES & EQUITY
ACC PAY
202
ST NOTES
225
OTHER CL
76
TOTAL CL
503
LONG TERM DEBT
245
TOTAL DEBT
748
OWNERS CAPITAL
395
RETAINED EARNINGS
344
TOTAL DEBT & EQUITY
739
1487
ADJUST
$ 000’S
ESTIMATE
2014 $ 000’S
SALES
4700 X 150%
7050
COS
7050 X 82.5%
5816
GP
1234
MARKETING
7050 X 5.9%
416
GEN & ADMIN
130
DEP
280/14
20
(566)
OPERATING PROFIT
668
INTEREST
45
PBT
623
TAX
249
PAT
374
DIVIDENDS
30
RETAINED EARNING
344
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