Calculating sales and ROI for Charlie's Furniture Store
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I am truly stuck. I have filled out all portions in which I understand, however I can not seem to make the formulas check themselves.
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Charlie's Furniture Store has been in business for several years. The firm's owners have described the store as a
"high-price, high-service" operation that provides lots of assistance to its customers. Margin has averaged a relatively
high 32% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of
$800,000. A discount furniture store is about to open in the area served by Charlie's, and management is considering
lowering prices in order to compete effectively.
Please proceed to the "Analysis" worksheet and complete the basic problem requirements. Complete the problem
requirements by entering appropriate amounts or formulas in shaded worksheet cells:
a. Calculate current sales and ROI for Charlie's Furniture Store.
b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay
the same, calculate the sales that would be required to have the same ROI as that currently earned.
After completing the "Analysis" worksheet, please proceed to the "What the Numbers Mean" worksheet and respond
to the additional requirements presented.
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Solution Summary
The solution explains how to calculate the current sales and ROI for Charlie's Furniture Store
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