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Ashley Palmer Inc. Clothing, 11 Financial Forecasting sales continued ncrease over he next three years. Ashley Palmer Clothing, Inc. produces dresses 2013, During this same company The firm was launched in June 2009 by Ashley Jantz and reaching $4.7 m 6. The added Amanda Palmer, both duates of Boston College. mber of employees grew foot facility and gra .000-square Ashley Palmer designs rel for the modern woman equipment and presse appa additional sewing shape rather than using the traditional standard sizing. History of Sizing Clothing Planning for Growth creating pro- National Bureau of He August 2013, Ashley Palmer into received Department of Agriculture was charged with stan- n The products had fessional al for young dardizing sizing for women's clothing. Over a two-year rave reviews. Within three months, the retai outlets period, some 15.000 women were Eiven body mea- sold over 90 rcent of their inventories, quickly placing pc This system created the sizing system orders for more products. n use today. The founders, while exci ed about the prospect of Studies have found tha average body propor- sales growth, began to worry. Based o heir estimates, tions of American wome when the sizing charts were the company would most probably experience a 50 percent are different from the body proportions oftoday's growth rate, compared to the 25 percent they had expe Specifically, American women 939 were ienced over past two years. They knew that if they more slender and shorter. The result is that were to avoid cash flow problems from the anticipated difficult for some wome n to find clothing that fits wel growth, they needed to anticipate the asset requirements Sepcember 2009 issue of Fashionista Magazine, Jantz and additional financing that would be required to sus- who stand feet tall, said ain their business The owners believed they would need to purchase were tired of mor finding the clothes that were state-of-the-art ndustrial sewing machines, cut decided it would be a good venture tables, and pressing machines at a cost of S280,000. The to create products for today women based on bust new equipment would be depreciated over 14 years, usin cap size and torso length. straight-line depreciation. Jantz also thought that the opportunity following assumptions were appropriate 1. Cash, accounts receivable, and inventory would and Palmer, this problem represented an oppor- follow their same relationships to sales as in the past After considerable research, they decided to start wo years that is, ach asset would maintain the aver that produced fitted clothing for today's young age asset-to-sales percentages experienced in 2012 They recruited a young up-and-coming fashion and 2013 Joy Lee, who had experience in apparel design 2. cost of goods sold and marketing expenses are major women's clothing Both the business, they brands. months variable and would approximate the same percentage offered their first dresses for sale online. of sales as in 2012 and 2013. in early 2010, the firm began supplying clothes General and administrative costs are fixed in nature well-known high-end retailers. Within a year after but should increase to S130,000 in the next year a supplier to these exclusive retail outlets, the 4. The interest rates on the already outstanding debt order to production orders had more than doubled. would be renegotiated, which would reduce the inter- ers in keep up, the firm added five more team mem est on this debt to S45.000 October 2010 5. The firm's tax rate should be about 40 percent Case 11 Ashley Palmer Clothing, Inc

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