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Module 6

This document summarizes the process of forecasting revenues for a new online fashion business. It discusses key concepts like revenue, markups, and factors to consider in forecasting. The owner projects daily revenue based on average item sales. T-shirt cost is 90 pesos, with a 50% markup giving a selling price of 135 pesos. Jeans cost 230 pesos, with the same markup. Tables show the projected daily, monthly, and yearly revenues over 12 months, with a 5% monthly revenue increase except for June (10% increase) and summer months. Key assumptions are also stated.

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RhealynBalboaLopez
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40 views

Module 6

This document summarizes the process of forecasting revenues for a new online fashion business. It discusses key concepts like revenue, markups, and factors to consider in forecasting. The owner projects daily revenue based on average item sales. T-shirt cost is 90 pesos, with a 50% markup giving a selling price of 135 pesos. Jeans cost 230 pesos, with the same markup. Tables show the projected daily, monthly, and yearly revenues over 12 months, with a 5% monthly revenue increase except for June (10% increase) and summer months. Key assumptions are also stated.

Uploaded by

RhealynBalboaLopez
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 16

FORECASTING THE

REVENUES
OF THE BUSINESS
Motivation
Directions:
Try to fill in the necessary information in the table
below. In the first column, write the thing that you can
do that you want to estimate the time it takes you to
complete the task. Then, write your estimate to
complete the task and doing the activity write the actual
time you finished the task in the third column.
Motivation
What is forecasting?

Forecasting is a technique that uses historical data


as inputs to make informed estimates that are
predictive in determining the direction of future
trends.
What is Revenue?
Revenue is the value of all sales of goods and services recognized by
a company in a period. Revenue (also referred to as Sales or Service
Income) forms the beginning of a company’s income statement and
is often considered the “Top Line” of a business. Expenses are
deducted from a company’s revenue to arrive at its Profit or Net
Income.
What is Revenue?
Other terms related to revenue include Sales and Service
Income. Sales is used especially when the nature of business
is merchandising or retail, while Service Income is used to
record revenues earned by rendering services.
You have just learned about what
revenue is. This time, let us study the
various factors to consider in
forecasting revenues.
Factors to consider in forecasting
revenues
• The economic condition of the country.
• The competing businesses or competitors.
• Changes happening in the community.
• The internal aspect of the business.
Ms. Richie Dizon recently opened her dream business and
named Fashion Thrift Ready to Wear Online Selling
Business, an online selling business which specializes in
ready to wear clothes for teens and young adults. Based on
her initial interview among several online selling businesses,
the average number of t-shirts sold every day is 10 and the
average pair of fashion jeans sold every day is 6.
From the information gathered, Ms. Dizon projected the
revenue of her Fashion Thrift Ready to Wear Online Selling
Business. She gets her supplies at a local RTW dealer in the
city. The cost per piece of t-shirt is 90 pesos, while a pair of
fashionable jeans costs 230 pesos per piece. She then adds a
50 percent mark-up to every piece of RTW sold.
Let us solve the Mark-up and Selling
Price!
Mark-up refers to the amount added to the cost to come
up with the selling price. The formula for getting the
mark-up price is as follows:
Mark-Up Price = ( Cost x desired mark-up percentage)
Let us solve the Mark-up and Selling
Price!
Mark-Up for T-shirt = ( 90.00 x .50)
Mark-Up for T-shirt = 45.00

In calculating for the selling price, the formula is as follows:


Selling Price = Cost + Mark-Up
Selling Price = 90.00 + 45.00
Selling Price for T-shirt = 135.00
Table 1: Shows the projected daily revenue of Ms. Dizon’s online selling business.
Computations regarding the projected revenue are presented in letters in upper case A, B,
C, D, and E.
Table 2: Shows the projected monthly and yearly revenue of Ms. Dizon’s online selling
business. Computations about the monthly revenue is calculated by multiplying daily
revenues by 30 days (1 month).
Table 3: Shows the projected monthly revenues covering one year of operation. The table shows an
average increase of revenue every month by 5 percent except June, July to October and December.
While the month of June has twice the increase from the previous month, 10 percent.
IMPORTANT ASUUSMPTIONS

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