BUS 400 Module Six Assignment

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Southern New Hampshire University *

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Nov 24, 2024

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Harriet Creyer 6-3 Assignment: 24- month Pro Forma Southern New Hampshire University BUS – 400 – Driving Business Opportunities

BUS 400 Module Six Assignment Template 24-Month Pro Forma Previous Fiscal Year 24-Month Projections Sales $10,098,939,000 $11,312,781,880 Cost of goods sold $7,268,034,000 $7,918,947,316 Gross profit $2,830,905,000 $3,393,834,564 Selling expenses $2,225,766,000 $2,839,104,178 Administrative expenses $649,386,000 $871,324,156 Total operating expense $2,775,152,000 $3,710,428,334 Income from operations $55,753,000 -$316,593770 Other income $9,291,000 $9,291,000 Income before tax and interest $65,044,000 -$307,302,770 Other expense (interest) -$13,166,000 -$13,166,000 Income before income tax $51,878,000 -$320,468,770 Income tax expense $2,646,000 -$64,093754 Net income $49,232,000 -$256,375,016 Explanation of Assumptions Net Sales Growth (12% annually):  Chewy has a history of significant sales growth, and between 2021 and 2022, its net sales increased by 14%. To take into consideration future market saturation, the 12% annual growth estimate has been reduced significantly.

 Market Trends: As pet ownership rises and internet shopping becomes more common, the pet supply sector is predicted to expand further. Cost of Goods Sold (70% of projected sales):  Data from the past: In the past, Chewy's cost of goods sold has varied between 70% and 72% of net sales. This presumption fits with Chewy's historical cost structure.  Operational Efficiency: Chewy may realize cost reductions as it expands and improves its supply chain, which is included in the assumption. Gross Profit Margin (Approximately 30%):  History: Chewy has historically had gross profit margins between 28% and 30%, demonstrating its capacity to strike a balance between profitability and price.  Competitive Position: Chewy strives to maintain pricing competition while turning a profit. To establish this equilibrium, a steady gross profit margin is necessary. Operating Expenses (10% annual growth):  Chewy may continue to make strategic investments in marketing and technology to improve its customers' experiences and market presence.  Scaling Efficiency: As Chewy grows, it may achieve operational efficiencies, allowing for controlled expense growth.

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References Inline XBRL Viewer , www.sec.gov/ix?doc=%2FArchives%2Fedgar %2Fdata%2F1766502%2F000176650223000011%2Fchwy- 20230129.htm. Accessed 9 Oct. 2023.

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