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Posted by Mohamed Bampia some time ago
What are the assumptions for the below narrative which will help me draft the income statement or P&L statement. What is the difference between and assumption and a fact in financial plans - Orohena Pearls (owned by a business school roommate of Felix), an established supplier of Tahitian Pearls, located close to Pape'ete in Tahiti, is prepared to give him exclusive rights to sell their products in Switzerland for a six-year period in exchange for an upfront payment for those rights; - Single, undrilled, pearls sell in Tahiti for an average of 14,800 XPF each and Orohena Pearls (OP) is prepared to sell them to Felix at a 35% discount to this price (XPF is the international code for CFP francs the currency used in Tahiti and other parts of French Polynesia) - OP would ship to Felix on receipt of payment for each order; - Felix has found out that air freight (including insurance) from OP via courier would cost on average XFP 1,800 per pearl, and that the time from him placing an order to receiving the goods in Zurich would be three weeks (including the preparation and packing time in Tahiti); he would also have to pay the courier cost to OP on ordering; - Felix plans to order from OP monthly and intends to maintain a minimum stock of four weeks' worth of sales to ensure that he will be able to supply a suitable range of pearls to customers; - He will buy racking and a special safe at a total cost of CHF 5,700 to store the pearls, and has found a small commercial room nearby that he can rent for CHF 850 per month, payable monthly in advance, plus a security deposit of three month's rent (refundable in full if there is no damage to the premises); - He will also install an alarm system at an initial cost of CHF 5,500, plus a CHF 100 per month monitoring fee; - Felix will sell the pearls by internet only, and is planning to spend CHF 8,000 with a website designer to develop the site; - He has already spent CHF 9,000 on a market study that told him that once established, demand wou
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