ACC 308 Milestone Two Management Brief.docx - Dewhirst – Management Brief 1 Final Submission Management Analysis Brief Sarah Dewhirst Southern New

ACC 308 Milestone Two Management Brief.docx - Dewhirst –...

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Dewhirst – Management Brief 1 Final Submission: Management Analysis Brief Sarah Dewhirst Southern New Hampshire University
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Dewhirst – Management Brief 2 Management Analysis Brief 1. Meeting Future Expansion Goal In 2018, Peyton Approved intends to open a second location. In order to accurately plan and budget the expansion, pro forma financial statements are used. These statements are used in a matter of forecasting to determine the possibilities as if a certain situation were to occur (Wahlen, Jones, & Pagach, 2017). Peyton Approved has determined how much a new space would cost to rent each month as well as the amount necessary to hire and train new staff for the new location. The company plans to forecast its 2018 income statement and balance sheet as if they earned and used the prior year’s revenues and expenses at 80%. Peyton Approved has been able to increase its revenue and earnings from 2015 to 2017. The company is confident that its second location will continue to increase its revenue as well as steady its AR turnover. In 2017, Peyton Approved had an AR turnover of 5.91, which shows that it can collect its receivables almost 6 times in an accounting period. With a high turnover ration such as this, the company
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