Provide management commentaries based on business environment, economy, market trend, demand, other business factors and major items of reforecasted income statement
Babu Dev
351CRetailRecommendationsFinal.pptxForecast & Management Commentaries
Presented by: David White
Mukhammad Mubashirov
Clothing & Accessories Department Store
1
Management Commentaries
Current environment in business world and in our company
Current economic condition around the world
Our response to the encountered problems
Management Commentaries
Forecasted Profit/Loss statement
Change in our expectations for the next year
Recommendations
Close or Move Shops
Reduce rent
Reduce facilities/utilities
Further reduce payroll
Purchase, not Rent, Smaller Stores
Eliminates rent
Increases depreciation, thus increases EBITDA
Move Online
Ecommerce Sales (in billions) 2017 2018 2019 461 524 602
Move Online
Quarterly share of ecommerce sales of total U.S. retail sales from 1st quarter 2010 to 1st quarter 2020
Move Online
Despite the virus, ecommerce within retail sales is still projected to grow by 18% in 2020.
*source: https://www.businessinsider.com/us-ecommerce-report-2020
Benefits of Click and Collect
Keep stores relevant
Benefits of Click and Collect
Allow stores to be smaller
Benefits of Click and Collect
Keep payroll low
Benefits of Click and Collect
Keep inventory low
Benefits of Click and Collect
Promote and advertise healthy and safe business practices
Thank YOU
References
U.S. retail e-commerce sales share 2020 | Statista. (2020). Retrieved 27 July 2020, from https://www.statista.com/statistics/187439/share-of-e-commerce-sales-in-total-us-retail-sales-in-2010/
US Ecommerce will rise 18% this year amid the coronavirus pandemic. (2020). Retrieved 27 July 2020, from https://www.businessinsider.com/us-ecommerce-report-2020
US ecommerce sales grow 14.9% in 2019 | Digital Commerce 360. (2020). Retrieved 27 July 2020, from https://www.digitalcommerce360.com/article/us-ecommerce-sales/#:~:text=Consumers%20spent%20%24601.75%20billion%20online,quarterly%20ecommerce%20figures%20released%20Wednesday.
($000's)
Revenue60,000,000 44,100,000
Total Cost of Sales42,000,000
70.0%
33,600,000
76.2%
provision for returns4,410,000
COS for doubtful returns3,528,000
Adjusted COS32,718,000
74.2%
Gross Profit18,000,000
30.0%
11,382,000
25.8%
Payroll Expenses 7,500,000
12.5%
6,780,000
15.4%
Bonus (10% of Payroll Expense)750,000
1.3%
330,000
0.7%
severence pay75,000
Rent2,000,000
3.3%
2,000,000
4.5%
Facility/Utilities200,000
0.3%
200,000
0.5%
Travel & Entertainment1,000,000
1.7%
700,000
1.6%
Sales & Marketing1,200,000
2.0%
882,000
2.0%
Legal & Professional1,000,000
1.7%
1,000,000
2.3%
Other General & Administrative Exp1,200,000
2.0%
882,000
2.0%
Depreciation350,000
0.6%
300,000
0.7%
Amortization100,000
0.2%
100,000
0.2%
Total Operating Expense15,300,000
25.5%
13,249,000
30.0%
Operating Income2,700,000
4.5%
4,602,000
10.4%
Interest Income (current cash balance $0.5M; interest rate 1%)5,000
0.0%
-
0.0%
Interest Expenses (current debt balance $1.5M, interest rate 5%)(75,000)
-0.1%
(95,000)
-0.2%
Profit Before Tax2,630,000
4.4%
4,507,000
10.2%
Income Tax657,500
1.1%
1,126,750
2.6%
Net Income1,972,500
3.3%
3,380,250
7.7%
EBITDA3,150,000
5.3%
5,002,000
11.3%
Non GAAP Net Income
GAAP Net Income1,972,500 3,380,250
Adjustments (Net of Tax):
Amortization75,000 75,000
Total Adjustments75,000 75,000
Non GAAP Net Income2,047,500 3,455,250
DSO33 36
Accounts Receivable5,500,000 4,410,000
FY-20 (Original Budget)FY-20 (Updated Forecast)
