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ERIC Number: ED266990
Record Type: RIE
Publication Date: 1985
Pages: 8
Abstractor: N/A
Reference Count: 0
Survival Sales Forecasting.
Paradiso, James; Stair, Kenneth
Intended to provide insight into the dynamics of demand analysis, this paper presents an eight-step method for forecasting sales. Focusing on sales levels that must be achieved to enjoy targeted profits in favor of the usual approach of emphasizing how much will be sold within a given period, a sample situation is provided to illustrate this approach. In this situation, the eight-step method helps a married individual with a working spouse, dependent children, and a $25,000 per year job determine how many sales dollars a new retail operation must provide during its first year to make quitting his/her present job a reasonable risk. A format for computing a projected statement of net income (or loss) is provided to help determine survival sales levels the first year. Next, the eight-step solution to survival sales suggests that forecasters (1) survey the competition, (2) research potential suppliers, (3) compute the gross profit, (4) estimate the firm's annual operating (or ongoing) expenses, (5) compute the estimated gross profit, (6) forecast the survival sales level, (7) derive the cost of goods sold, and (8) complete a formula (provided) in which operating expenses and net income (expressed in percentage of sales) are figured by dividing operating expenses (in dollars) by sales dollars and then subtracting that percentage figure from gross profit percentage. Three tables are provided for computation. (LH)
Publication Type: Guides - Classroom - Learner
Education Level: N/A
Audience: Students
Language: English
Sponsor: N/A
Authoring Institution: N/A