Donna Tse has recently accepted the position of assistant manager at Cycle World, a bicycle store in St. Louis. She has just finished her accounting courses. Cycle Worlds manager and owner, Jeff Towry, asks Tse to prepare a budgeted income statement for 2017 based on the information he has collected. Tses budget follows:

Tse does not want to give Towry this budget without making constructive suggestions for steps Towry could take to improve expected performance. Assume the role of Donna Tse. Write a memo to Towry outlining your suggestions.