Contents
This report is based on the following requirement - - CASE STUDY - Fashion Craze Ltd (100 marks)
- Background
- You are a marketing manager for a local fashion retailer Fashion Craze Ltd, a private limited company.
- In your region Threads R Us is your closest competitor. Last year they launched a more premium price point range of clothing.
- At Fashion Craze Ltd part of your team are responsible for a limited range of menswear as part of a test to establish whether this product line extension could be strategically advantageous.
- As the business is looking to grow revenues longer-term, you are considering opening a new retail outlet and have researched two different locations with your Finance Manager.
- You have a strategy review meeting planned with your General Manager, Sarah Dean who has asked you to summarise your findings on these three key issues for her in advance of the meeting.
- Required
- Prepare a 2,000 report (word count excludes tables, bibliography and appendices; marking will stop at 2,000 words) for your General Manager that includes the following:
- Competitor Business Performance analysis Total 50 marks
- The Statement of Cash Flows for Threads R Us Ltd for the period ending 31 December 2014. You should prepare this using the information included in the Threads R Us Ltd financial statements for the two years.
- 15 marks
- A critical evaluation of the financial performance of Threads R Us Ltd for the year ending 31 December 2014 versus its financial position at 31 December 2013, including calculation of the key financial ratios that are missing (see ratio definitions in exhibit 5).
- You should specifically address the financial impact of the expansion of Threads R Us Ltd into more premium categories, including your assessment of the company’s sources of financing plus any consequences for Fashion Craze Ltd.
- Ratios 10 marks
- Evaluation 22 marks
- Report Format 3 marks
- Men’s range review Total 25 marks
- An evaluation in table format of the variances between the men’s range budget versus actuals (ignoring at this stage the potential problem with the jeans), with a written top line conclusion.
- 5 marks
- Assuming the we have to use the alternative supplier, calculation of the break even number of everyday jeans needed to cover budgeted worst case fixed costs, explaining the significance of break even point, and any limitations in general of break even analysis.
- Calculation 5 marks
- Explanation 10 marks
- Appraisal of new outlet proposals Total 25 marks
- Calculate the payback period and net present value for the Mall proposal.
- 5 marks
- Critically compare the principles of the payback period and discounted cash flow methods including their advantages and disadvantages.
- 12 marks
- Critically evaluate the results from 3a and the Broad Town location information provided in exhibit 4 and give your recommendation as to which if any of these proposals the Craze Fashion Ltd should make.
- 8 marks
Description
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