Finance is a broad field, in which there are number of things would be stride upon. In estimating the future sales, organizations have to consider numerous things in total. The main theme of this assignment is to answer with certain computation with the help of different provisions in total
Ans-1)
Projection of sales would always be effective from the viewpoint of an organization, and an organization could not get certain added advantage without projecting their sales effectively. There is certain estimation, which should be taken into consideration, while projecting the sales of a company. The stance of projecting the sales of a mature company and a rapidly growing company as a whole
The approach of sales projection in a mature company would be like this,
We have supposed that, there is a mature company, which has total sales of 100$, with its average past 4 years increment in the sale is 8%. In this particular scenario, we would apply the 8% increment rate on all of the five years. By computing with the same provision, the total sales of the company would be 108$ in the first year of projection, while it move to a level of 116.64$, 125.9$, 136.0$ and 146.93$ for the next four years respectively. The cost of goods sold is 70% of the sales of the company which would remain in the same jurisdiction from which the COGS could be found for all of the other years as well.
The approach of sales projection in a rapidly growing company would be like this
In this particular scenario, we have supposed that the last year sales increment was 12%, and it will increase by 1% every year after. Like it would be 13% increment in the 2nd year of operation, 14%, 15% and then 16% in 3rd, 4th and 5th year respectively.
Ans-2)
Mentioned below is the data which has been given with this particular analysis,
- Average Revenue Per Store
We have simply divided the total revenue from the total number of stores to have the revenue per store in total. In the year 2009, it is 35 million $, while it is 31 million $ in the year 2010 in total.
Capital Expenditure and Inventory pr store in the year 2010 are mentioned below,
The inventory per store is $ 4.69 million per store.
Ans-4)
We have computed the free cash flow and present value of the equity by dividing the total capital with the discounting factor and then compute the price per share accordingly. The Value Price per Share of the company is 14.815$
New Question
For each of the following scenarios determine if it is an indicator of potential cash flow problems. Explain your answers.
Sale of marketable securities would decrease the current assets provisions of the company and cash would increase with its sales, hence no cash flow potential problem arises with the same.
