Question

In: Accounting

Division Profitability Quarter 1 Quarter 2 Quarter 3 Quarter 4 graph GROSS PROFIT Revenues 0 0...

Division Profitability
Quarter 1 Quarter 2 Quarter 3 Quarter 4 graph
GROSS PROFIT
Revenues 0 0 1,056,604 1,597,853
- Rebates 0 0 16,500 23,750
- Cost of Goods Sold 0 0 410,486 581,268
= Gross Profit 0 0 629,618 992,835
EXPENSES
Store Leases 0 0 90,000 144,000
+ Sales and Service Personnel Expense 0 0 99,571 149,429
+ Brand Promotions 0 0 0 0
+ Special Programs 0 0 0 0
+ Ad Creation/Revision 0 0 24,000 12,000
+ Point of Purchase Display Expenses 0 0 800 1,800
+ Advertising Expenses 0 0 17,454 34,747
+ Internet Marketing Expenses 0 0 2,000 2,000
+ Engineering Cost for New Brands 0 150,000 0 90,000
+ Market Research 88,000 0 20,000 60,000
= Operating Expenses 88,000 150,000 253,825 493,976
Operating Profit -88,000 -150,000 375,793 498,859
MISCELLANEOUS INCOME AND EXPENSES
+ Other Income 0 0 0 0
- Other Expenses 0 0 0 0
- Research and Development Costs 0 0 0 0
- Set Up Costs for New Stores 0 438,000 146,000 180,000
= Net Profit for Division -88,000 -588,000 229,793 318,859
Cumulative Net Profit for Division -88,000 -676,000 -446,207 -127,348

I am needing projections of profits of the next three quarters?

What would the return on investment be by the end of the second year?

Solutions

Expert Solution

The rate of retuen and projections are

Year 1 Growth Rate Year 2
Particulars Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Revenue                     -                       -            1,056,604          1,597,853 51.23%          2,416,359          3,654,147          5,525,996          8,356,706
Rebates                     -                       -                  16,500                23,750 43.94%                34,186                51,697                78,179              118,227
COGS                     -                       -                410,486              581,268 41.60%              823,104          1,244,741          1,882,364          2,846,611
Gross Profit                     -                       -                629,618              992,835          1,559,069          2,357,708          3,565,452          5,391,867
Expenses :
Store Leases                     -                       -                  90,000              144,000 60.00%              230,400              348,423              526,904              796,813
Sales & Services Perssonel                     -                       -                  99,571              149,429 50.07%              224,252              339,126              512,845              775,551
Brand Promotion                     -                       -                           -                           -   0.00%                         -                           -                           -  
Special Programme                     -                       -                           -                           -   0.00%                         -                           -                           -                           -  
Ad creation                     -                       -                  24,000                12,000 -50.00%                  6,000                  3,000                  1,500                      750
Point of pur daily exp                     -                       -                        800                  1,800 125.00%                  4,050                  6,125                  9,262                14,006
advertising exp                     -                       -                  17,454                34,747 99.08%                69,173              104,608              158,194              239,229
Internet marketing exp                     -                       -                    2,000                  2,000 0.00%                  2,000                  3,025                  4,574                  6,917
engg cost                     -            150,000                         -                  90,000 -40.00%                         -                  36,000                         -                  14,400
market research            88,000                     -                  20,000                60,000 200.00%              180,000              272,206              411,644              622,510
Total operating expenses            88,000          150,000              253,825              493,976              715,876          1,112,512          1,624,922          2,470,176
Operating Profit          (88,000)       (150,000)              375,793              498,859              843,194          1,245,196          1,940,530          2,921,691
Misc Income & Expense :
Other Income                     -                       -                           -                           -  
Other Expense                     -                       -                           -              &nb

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