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Sneaker 2013

This document outlines the 6-year life cycle and financial projections of a sneaker company from 2013 to 2018. It details the initial investment of $180 million to open a factory. While the cost of each shoe was $190, they averaged 40% profit at retail level, selling for $115 each. The document provides yearly projections of sales revenue, costs, depreciation, operating expenses, and EBIT.

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Utkarsh tiwari
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50 views5 pages

Sneaker 2013

This document outlines the 6-year life cycle and financial projections of a sneaker company from 2013 to 2018. It details the initial investment of $180 million to open a factory. While the cost of each shoe was $190, they averaged 40% profit at retail level, selling for $115 each. The document provides yearly projections of sales revenue, costs, depreciation, operating expenses, and EBIT.

Uploaded by

Utkarsh tiwari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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1) Six years life cycle (2013 - 2018)

2) Cost of shoe = 190$ but averaged 40% at retail


Selling price of each shoe = 115

Initial Investment (In millions)


Cost of opening factory 150
Equipment cost 15
Freight and installation cost 5
Working capital at initial cost 10
180

Working capital accounts Pt 4


Cost of Inventory 15 Pt 9
Acc payable to be increased 5 Pt 10
Initial investment 10 Pt 11
Pt 8
Pt 5
Pt 6
150 Depreciation on building 2.60% 5% 4.70% 4.50%
3.9 7.5 5.85 6.75

4.00%
6

20 Depreciation on equip_inst 20% 32% 19% 12%


4 6.4 3.8 2.4
6%
1.2
Sneaker 2013
(2013 - 2018)
0$ but averaged 40% at retail level so 190 * 0.60 = 115
shoe = 115

In millions
Sales revenue(S.P*pairs_sold) 138 184 161 276 207
Lost sales -35 -15
Net revenue 103 169 161 276 207
SGA 7 7 7 7 7
Adv_James-Endorse 2 2 2 3 2
Ad_n_Pro 25 15 10 30 25
Variable cost 56.65 92.95 88.55 151.8 113.85
Deprecia_Building 3.9 7.5 7.05 6.75 6.45
Deprecia_equip_install 4 6.4 3.8 2.4 2.2
4.30% Total deprecia 7.9 13.9 10.85 9.15 8.65
6.45
Op Expenses 98.55 130.85 118.4 200.95 156.5

EBIT 4.45 38.15 42.6 75.05 50.5

11%
2.2
103.5

103.5
7
2
15
56.925
6
1.2
7.2

88.125

15.375
2012 2013
Revenue
2014 2015 2016 2017 2018

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