Project description
NEW FOOTWEAR PRODUCT

SCENARIO:

You have developed a footwear product, which you believe could revolutionise the footwear market.

Following on from the Dragons Den success of Levi Roots Reggae Reggae Sauce (search the internet if you are unfamiliar with this story), you have decided to make a pitch to a small group of potential investors.

You know that any potential investor will expect you to have a good knowledge of how much your product will cost to produce and also of the expected level of sales and profit your product is predicted to make.

REQUIRED:

1. Prepare a marginal costing cost statement for your product on a per unit and 12 months sales/production basis. 5 marks

2. Produce the following financial documents for the first 12 months of trading:
a. Cash Budget(month by month)15 marks
b. Forecast Income Statement(for the year)10 marks
c. Forecast Balance Sheet(for the year)10 marks

3. Write a 1,000 word pitch explaining the costing and financial data from tasks 1 and 2 above, to your potential investors. 35 marks

Total 75 marks

1. Prepare a marginal cost statement for your product.

1-4

The marginal cost statement should be presented in marginal costing format.
(5 marks)

2. Produce the following financial documents:
a. Cash Budget
b. Forecast Income Statement
c. Forecast Balance Sheet

1-4

Students need to demonstrate understanding of the mechanics of the three documents, by producing three, appropriately formatted financial documents which all link together. The balance sheet should balance.

Mark allocation:
– Cash Budget
(15 marks)
– Forecast Income Statement
(10 marks)
– Forecast Balance Sheet
(10 marks)

3. Write a 1,000 word pitch explaining the costing and financial data from tasks 1 & 2 above, to your potential investors.

1-4

This document should be in a basic report format. Students must write the report in line with the assignment scenario, ie: the report is to be written TO your potential investors, FROM you (a potential entrepreneur).
Essential components of the report:
Title Page
Introduction
Main Section
Conclusion

Main Section: The Pitch
The purpose of the main section is to sell the idea of your new product to your potential investors, to persuade them to invest in your new business.
As this is an accounting and finance module, the emphasis of the pitch must be financial. Your potential investors will want to know what return they can expect on their investment.
As a minimum they will expect you to provide details of the following:
forecast turnover
forecast profit margin (%)
forecast value of the business
forecast cash flow
You should refer to the data and financial documents from tasks 1 & 2 and include them in the form of appendices to your report.
(35 marks)