BSAD310 Financial Accounting Systems Sams Sporting Goods Budget Analysis

Directions:

Pretend you are an owner of Sams Sporting Goods. Consider the information provided in the chart below. Then create a projected budget and determine what actions management may need to take to maximize return.

1. Create a projected budget for the next 18 months, starting the 1^st of next month.

2. Evaluate the projected budget and determine if the store is profitable for each month and track Cash Flow per month.

3. Determine and defend recommendations on changes that you would make or actions you would take as an owner to help increase the Return on Investment of $15M. Calculate the ROI at the 18 month mark.

Suggestion: Research using Google or Yahoo Finance to determine any cost variances from Industry Averages or Major Competitors.

Budget Item	Details
Sales $1,000,000/mo	Up 20% during April, May, Aug, Nov, Dec
COGS 50%	Drops 15% in April due to Massive Summer Ordering
Returns	Returns 3% Feb-Nov, 12% Dec - Jan
Admin Fees 4% of Gross Sales	Static
Current Cash on Hand $25,000	Starting amount for Cash Flow Analysis
Depreciation Expense Straight-Line Method	$240,000/yr
General Mgr. and Asst. Mgr. Salaries	make $10,000 combined
Grade A Retail space $30/ft. + 7% gross sales	Increases to $32/ft. in September
Health Insurance $400/employee 15/FT/40hr employees	Increases 15% on June 1
Insurance Policy $20M Umbrella, 6% of Gross	Increases 10% on July 1
Management Bonus	Bonus is 10% of Net Income if NI>3% of Gross Sales
Marginal Tax Rate	34%
Marketing 5% of Gross Sales	Up 50% during April, May, Aug, Nov, Dec
Other Misc. Expenses	5% of Gross Sales
Outside Accounting & Legal Fees 2% of Gross Sales	Static
Startup Cost for the business	$15,000,000 cash
Utilities on 15,000 sf at 10cent/ft./mo.	Increases 20% on Jan 1, Plus Up 10% in May, June, July
Wages including Taxes, UEI $14/hr.	Increases 8% on June 1

Budget Analysis:

Write a budget analysis that includes the following:

1. An Excel spreadsheet showing 18 month projected budget for Sams Southwest Sporting Goods.

2. A month-by-month Cash Flow Analysis to aid in decision-making process. Calculate the ROI at the 18-month mark based upon the $15M investment.

3. At least four recommendations to increase ROI based upon the projected budget, cash flow analysis and any research. Describe and defend the four recommendations with reputable professional support.

Requirements: 1,000-1,250-words excluding the title page and references. Use at least three scholarly or professional journal articles written within the last five years cited in APA format. Include an introduction and conclusion, plus the projected budget spreadsheet, and other charts. Insert the Excel spreadsheet as a table into the document. Do not attach the spreadsheet as a separate file.

Consult the Written Assignment Grading Rubric to ensure you are meeting the assignments criteria as this information and the rubric will be used to assess your work.