Financial Management Interim Assignment - Desklib

Financial Management
Interim Assignment

Given information:
Total amount of capital available in hand = € 450,000
Price per pound of nuts in retail in USA = $27.50
Discount offered to Chiara = 40%
Information relating to expenses:
Cost Per unit
Price per pound of nuts => Retail Price – Discount = $27.50 –
40%
$16.50 per pound
Freight $2.70 per pound
Local Packing and Shipping $3.00 per pound
Credit Card Charges 1.50% on total
sales through
credit card
Salaries $11,500 per
annum
Salary to additional assistant => $300 per month x 12 months $3,600 per
annum
Decorative Box 0.80 per 600
grams pack
Market Survey Expenditure € 5,000
Capital Expenditure:
Capital Expenditure
Refrigerator €4750
Website €8000

Projected Statement of Profit and Loss
For the first year of operations of unnamed business of Mrs.
Chiara
Particulars Note Amount in
(€)
Total Sales 1 125,610
Less: Cost of goods sold 2(b) (59,189)
Gross Profit 66,421
Less: Operating Expenses 3 (44,691)
Operating Income 21,730
Non-Operating and Others
- Preliminary Expenditure (5,000)
Profit before Tax 16,730
Less: Income Tax Expense (5,019)
Profit after Tax 11,711

Notes to Projected Statement of Profit and Loss:
1. Monthly Projected Income Statement:
Month 1 2 3 4 5 6 7 8 9 10 11 12 Total
Online Sales (in Kgs) (a) 40 46 54 62 73 83 98 112 132 151 178 200 1,229
Sale to Marco (b) 30 30 30 30 30 30 30 30 30 30 30 30 360
Total Sales 70 76 84 92 103 113 128 142 162 181 208 230 1,589
Revenue
=> (a) x €90 + (b) x
€41.67
4,850 5,390 6,110 6,830 7,820 8,720 10,07
0
11,33
0
13,13
0
14,84
0
17,270 19,250 125,61
0
Expenditure
Direct Material [2(b)] (2,607
)
(2,83
1)
(3,129
)
(3,42
7)
(3,837
)
(4,20
9)
(4,768
)
(5,28
9)
(6,034
)
(6,74
2)
(7,748) (8,567) (59,18
9)
Salaries (1,258
)
(1,25
8)
(1,258
)
(1,25
8)
(1,258
)
(1,25
8)
(1,258
)
(1,25
8)
(1,258
)
(1,25
8)
(1,258) (1,258) (15,10
0)
Rent (550) (550) (550) (550) (550) (550) (550) (550) (550) (550) (550) (550) (6,600)
Packing Charges (144) (162) (186) (210) (243) (273) (318) (360) (420) (477) (558) (624) (3,975)
Credit Card Charges =>
1.5% of Online Sales =
1.5% x €90 x (a)
(54) (62) (73) (84) (99) (112) (132) (151) (178) (204) (240) (270) (1,659)
Total Monthly Expenditure (4,614
)
(4,86
3)
(5,196
)
(5,52
9)
(5,987
)
(6,40
3)
(7,027
)
(7,60
9)
(8,441
)
(9,23
1)
(10,35
4)
(11,27
0)
(86,52
3)
Less: Depreciation &
Amortization expenditure
[Refer 3(a)]
(17,35
7)
Less: Preliminary
Expenditure
(5,000)
Profit before Tax 16,730
Less: Tax @ 30% (5,019)
Profit after Tax 11,711
Computation of selling price per kg for sale to Marco:
Price per box of 600 grams $25.00