Estimating sales and profit after tax

Assignment Help Accounting Basics

Reference no: EM13115375

The company is "Ties for U" and my boss wants to estimate profits for next year(2008) and then determine the percentage growth from 2007 to 2008.

Some assumptions:

-The marketing folk expect the total market for ties in 2008 to be 10 million ties.

-The expect "Ties for U" to capture 20% of the market next year.(how many ties will "Ties for U" sell?)

-The average selling price for "Ties for U" is $300.(now you can calculate the sales)

-Total expenses(cost of goods, marketing etc) estimated to be 60% of sales.

-Tax rate on profits is 50%

Questions:

What is your estimate for 2008 sales($)?

What is your estimate of 2008 profits after tax?

What is the percentage increase in 2008 profits after tax vs 2007 profit after tax of $110 Million?

Reference no: EM13115375

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