Dave's Assets Daves has calculated his assets for each of his stores as following: Store 1's current merchandise inventory is valued at $250,000. Store 1 has accounts receivable totaling $59,000 and has $12,000 in cash available. The value of the fixtures in the store are worth approximately $8,000. Store 2's current merchandise inventory is valued at $42,000. Store 2 has accounts receivable totaling $5,000 and has $32,000 in cash available. The value of the fixtures in the store are worth approximately $90,000. Dave's Store: Asset management Store1 Accounts Receivable Merchandise Inventor Fixed Assets Feral Assets Inventory Turnov Asset Turnover Asset Turnover Dave's Financial Analysis Adhentein = 20,000 Dave currently operates two high end furniture stores in his town. He wants to get a clear picture of the net profit of each store last year. Here are the financial details for his two stores: Store 1 has $950,000/year in retail sales. Two percent of register sales are returned for a full refund during the course of the year. The total cost of his inventory at this store for the year was $450,000. The store is leased for $40,000 per year. Last year, a competitor opened up a furniture store across the street. As a result, Dave decided to spend $20,000 in advertising and promotions during the year to get customers to choose his store. Dave pays his employees at this store a total of $190,000 in salaries. He also paid sales commissions totaling $30,000 to his salesforce. This store also sold a line of furniture that carried with it a manufacturer's allowance. Dave just received an allowance check from the manufacturer totaling $5,000. Store 2 has $2,010,000/year in retail sales. Last year, five percent of register sales were returned for a full refund. Inventory at the store cost a total of $1,300,000. The second store is larger than the first and cost $75,000 a year in lease. In addition, Dave spent $100,000 last year to update the stores layout and fixtures. Employees at this store are paid a total of $250,000 in salaries. A fire in the storeroom caused damage in the store that had to be repaired at a cost of $25,000. Dave's insurance cost after this incident went from $1,000 per month (paid from January to March) to $2,000 per month (paid from April to December). Dave's Stores (Net Profit) Net Sales Cost of Goods Sold Coco Gross Margin 1,200,000 600 500 446,0000 ood 2.80,000 Selling General and Administrative (SGRA) Operating Profit 809;000 Other Income (expense) 25.000 Net Profit 20 6000 SG&A percent of sales 138,500 23.5% 7 . Net Profit 22%