Petite Shop Analysis

Paper Summary:

In this article the writer studies Alice's plan for the launching of a clothing store. The writer highlights that Alice has completely failed to address the impact of competition on the overall business model of her concept. The writer notes that Alice addresses start up costs and operating expenses, as well as promotional costs associated with launching a clothing store, but she completely fails to consider how competition within the local market is going to affect not only her grand opening but also her ongoing sales.

From the Paper:

"Estimated (pro forma) Income Statement Assets Revenue estimates Cash 3,250 Gross Sales 156,000 Less: sales returns/allowances 2,600 Sales discounts 1,733 -4,333 Net sales 151,666 Cost of Goods Sold Beginning inventory Jan 1 43,333 Merchandise 86,666 Freight 8,666 Net purchases 95,333 Cost of good available for sale 138,666 Less: ending inventory Dec 31 -49,833 Cost of goods sold -88,833 Gross profit 62,833 Operating expenses Selling expenses Salaries 2,000 Advertising 3,900 Supplies 433 Total selling expenses 21,833 General expenses Office salaries 4,516"

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