CAROL (TITLE)
Ardeur de France is a brand
A felicitous morning to everyone especially to our
panelist and to our very own subject adviser, Mrs. Leove
Mutiangpili. I am Ann Carol Felisilda from BSA 3-2 and
together with me are my groupmates Cindy Alday,
Jeshiel Dimaano, Karelen Dinglasan, Darelene Rosales,
Vanessa Soria and Hannah Villanueva to discuss to you
the strategic plan of Ardeur de France.
CONTENTS
To start with, this are the contents of our paper. We have
7 modules wherein under module 1 was the introduction
that I would be explaining as well as the definition of the
industry under module 2. Also, under module 2 are the
Analysis of the Present Task Environment (Michael
Porter’s Five Forces of Competitive Framework) to be
discuss by vanessa, Macro Environment Analysis (PESTEL
Framework) which will be elaborated by Darlene, Threats
and opportunities to be explained by cindy, for more
information about strategic mapping we have Hannah
and Competitive Profile Matrix to be discussed by yours
truly together with the overview of the company
contained by module 3. The organizational chart will be
explained by jeshiel and vanessa and I would be
discussing the financial analysis. Jeshiel will futher
elaborate the value chain analysis and strength and
weaknesess will be discussed by vanessa. Moving on,
module 4 contains Vision and Mission both (current and
recommended) which will be explained by Hannah.
Cindy will discuss the annual objectives
IFE Matrix is on the hand of vanessa while EFE matrix will
be elaborated by Cindy as well as the IE matrix and lastly
under module 4 was the Proposed Corporate Strategy
which will be discussed by jeshiel. The module 5 was all
about Functional Strategy containing (Human resource,
Marketing, Operations, Finance) which will explain by
karelen. And under module 6 is the balanced score card
that I am going to discuss and the last module was all
about financial projections to be discussed by karelen
and Darlene.
INTRO
Filipinos are usually conscientious about personal
hygiene and maintaining a youthful appearance during
the day. However, due to our tropical climate and
everyday work, we cannot stop perspiring and being
exposed to the elements. That is why, daily, we depend
on perfumes to smell fresh and raise our morale. Ardeur
de France is a luxurious French-inspired perfume
renowned for its superior consistency, chic essences, and
long-lasting fragrance. Ardeur de France is a business
that caters to a diverse group of people. The company
began operations in August 2015, ARDEUR WORLD
MARKETING CORPORATION was founded on a solid and
unmatched dedication to improving lives. Ardeur World,
a wholly-owned subsidiary of Ardeur de France, is the
sole distributor and marketer of Ardeur de France -
French-inspired fragrances and personal care lines in the
market. Perfume is the next step in the evolution of
human expression by fragrance.
DEFINITION OF THE INDUSTRY
Cosmetics and personal care products are typically
classified into five distinct market segments: skincare,
haircare, makeup, fragrances, and toiletries. These
segments are complementary, and their diversity
enables them to meet the needs and desires of all
customers about cosmetics.
associated with the cosmetics and personal care
industry. Aside from perfume, it offers a superior line of
beauty soaps that address various skin issues, from
whitening to moisturizing. Cosmetics and personal care
are expected to grow in all segments over the next few
years. Digitalization and the coronavirus pandemic,
cosmetics, and personal care have migrated online,
providing shoppers with a diverse selection of products,
reviews, and distribution options.
VANE (PORTER)
Good Morning, I am Vanessa Soria and I will be
presenting the Analysis of the Present Task Environment
of Ardeur De France through Michael Porter’s Five Forces
Competitive Framework.
Porter’s Five Forces Model is strategic model that
enables Ardeur de France strategist to see in an eagle’s
eye view, to see the current standing or position of the
company against their rivalries. The five elements were
analyzed:
1.) Threats of New Entrants- is a threat, new competitors
pose to existing competition in an industry. As we have
mentioned earlier the demand for personal hygiene is
increasing therefore in perfume industry as well. New
entrants pressures the company’s creativity to develop
and improve their product. To mitigate this risk Ardeur de
France must manage all of these obstacles and create
successful barriers to protect its competitive advantage
such as investing in research and development and
building capacities.
2.) Bargaining Power of Supplies – Suppliers possess a
bargaining power towards Ardeur de France because
almost every company in the fragrance industry obtains
its raw materials from a variety of sources. They can put
pressure to them by raising supplies’ price and reducing
the availability of the supplies. To mitigate this, Ardeur de
France must secure a reliable and loyal suppliers that
can meet the company’s demand, effective supply
chain with a multiple supplier.
3.) Bargaining Power of Buyers – In a buyer’s perspective
we wanted to buy products in lowest cost possible and
high quality that is why Buyers can be demanding. In the
long run, this placed a strain on Adeur de France's
profitability. To mitigate this by establishing a strong
customer base.
4.) Threats of Substitute Products or Services- Today there
are lot of products that offers 2 in 1 effect such as lotion
that brighten skin and also has fragrance this possess a
huge threat to Ardeur de France because knowing
consumers they want products that worth every cent of
their money. To mitigate this Ardeur de France should
focus on quality rather than only selling products. By
focusing on the customer's core need rather than the
product they are selling. To convince consumer’s on
perfumes benefits.
5.) Rivalry among the Existing Competitors- Adeur de
France works in a highly competitive market and has a
negative impact on the company’s overall long-term
profitability. We can mitigate this rik By establishing a
long-term distinctness. By increasing its size, it would be
better able to compete.Instead of fighting for a small
segment, collaborate with rivals to expand the market
size.
DAR (PESTLE)
PESTLE analysis is a strategic tool to analyze the
organization's macro environment. PESTLE stands for -
Political, Economic, Social, Technological,
Environmental & Legal factors that impact the macro
environment of Ardeur De France. The macro-
environment factors can impact the Porter Five Forces
that shape strategy and competitive landscape. They
can impact an individual firm's competitive advantage
or overall profitability levels of the industry.
Political
Ardeur De France is a brand regulated by the FDA.
Food and Drug Administration is a government agency
that regulates certain food, drugs, cosmetics, and
medical products that ensures the safety of our nation's
food supply, cosmetics, and products that emit
radiation.
Ardeur de France is a brand associated with the
cosmetics and personal care industry therefore they are
expected to uphold a consistent standard of fda’s
regulation.
In terms of pricing, ardeur's competitors use competitive
pricing techniques, which they must keep in mind at all
times. Political stability and inflation are also important
factors in determining how businesses price their goods.
Both policies and development must be kept up to date
so that the organization can adapt to them
appropriately.
Economic
Businesses had to radically restructure their sales and
marketing strategies as a result of the Covid19
pandemic, which has severely impacted them. They
had to downsize internally, laying off a large number of
workers to reduce labor costs as a result of the drop in
revenue, which forced some businesses to close
permanently. Economic factors, indeed, have the most
significant impact on a business, regardless of its industry.
Social
Ardeur De France has excelled at identifying and
capitalizing on shifting consumer preferences. They
discovered the Filipinos' fascination with diverse
fragrances that cater to a wide variety of people. Their
experience helped them gain a competitive advantage
in the industry.
Technological
Companies have been inextricably linked to many of the
most recent technical advances that have emerged
since the beginning of the industrial age. The use of
social media skyrocketed, allowing for more contact
with consumers. From production to distribution,
technology provided opportunities for Ardeur de france
to increase brand recall and engagement.
Environmental
Ardeur de France, as a personal care and cosmetics
company, must consider a variety of factors, including
factories, distribution centers, and even the
transportation process. Much of this must be done in
compliance with current environmental policies. They
also ensure that the policies that businesses implement
as part of corporate governance are structured to
ensure that the company’s operations are ethical and
beneficial for society.
Legal
Cosmetic fragrance ingredients must be protected in
the same way as other cosmetic ingredients are. The law
does not require FDA approval until they can be
marketed, but they must be safe for consumers when
used according to the label's directions or as most
people do. Ardeur De France made certain that they
followed all relevant laws, including those governing
employment, consumer protection, and so on.
CINDY (OW)
SWOT (strengths, weaknesses, opportunities, and threats)
analysis is a framework used to evaluate a company's
competitive position and to develop strategic planning.
SWOT analysis assesses internal and external factors, as
well as current and future potential
Opportunities are factors outside the organization that
the business can take advantage of to reach business
goals and move the business forward. Threats include
anything in the external environment that might cause
issues for a project or that pose a future threat to the
organization's success 1.5 The EXISTING THREATS AND
opportunities are going to be discussed in External factor
matrix.
HANNAH (STRATEGUC GROUP MAP)
To achieve long-term competitive success in an industry,
a business must first acquire a detailed understanding of
its competitive landscape. The strategic group analysis is
a highly effective method for gaining insight into direct
competitors.
The key tool for analyzing strategic groups is the strategy
group map. It enables the visualization and analysis of
industry rivals' competitive positions using factors (shared
traits) associated with their strategic importance.
Identifying primary competitors is one of the most useful
aids in developing a strategic group map. Naturally, we
must understand our competitors in order to evaluate
and assess the tactics that the organization must
implement in order to remain competitive. The following
step is to identify the strategic factors that differentiate
firms, such as product quality and features,
product/service diversification, market segments served,
and brand image. We plotted the companies
represented by two of the least associated variables on
the graph. After analyzing the group map, we will be
able to assist our chosen organization in developing and
identifying future competitive strategies in the market.
CAROL (COMPETITIVE PROFILE MATRIX)
The Competitive Profile Matrix (CPM) is a
strategic analysis that allows you to compare your
company to your competitors, in such a way as to reveal
your relative strengths and weaknesses.
With the table shown, the two main competitors of
Ardeur de France was Aficionado and ZenZest. There are
eight (8) critical success factors used for the competitive
profile matrix which are product quality, customer
service, brand reputation, marketing, price, innovation,
customer loyalty and location. As with the weight of the
given factors, product quality, customer service and
brand reputation got a 0.20 while, price, innovation and
customer loyalty has 0.10 weight score and marketing as
well as the location got 0.05. On the other hand, among
the three company, Aficionado got the highest total
score with 3.60 followed by Ardeur de France with 3.30
and ZenZest with 3.00. Although Ardeur got the total
average score of 3.30, it excels in product quality with
total weighted score of 0.8 together with the customer
service and brand reputation which became their
strength. Moreover, it’s lowest weighted score was 0.05
which is from the factor of location which is their
weakness and has to be imporved.
OVERVIEW
Ardeur de France was established August 2015. Ardeur
Philippines has become a launching pad for offering
high-quality yet reasonably priced products and income
opportunities to entrepreneurs both local and sooner
than later- abroad. Ardeur World Marketing Corp., is a
100%, Filipino owned SEC registered company-
corporation which exclusively distributes and markets
Ardeur de France fragrances in the country.
Approached with the opportunity to start in the industry
in August 2015, Ardeur World is expected to become a
forefront in the country’s Direct Selling and Multilevel
Marketing Industry when it comes to offering high quality
yet reasonably priced personal care fashion products
Driven by deep and unparalleled commitment to help
make a better life, ARDEUR DE FRANCE. was launched.
It’s corporate office was located at 4 F Caswynn
Building, No. 134 Timog Avenue, Barangay Sacred Heart,
Quezon City (In front of GMA 7 Network) while it’s
Batangas Branch was located at P. Burgos St. 16
Poblacion, Batangas City. Also, it has stock areas
wherein they have 24 franchise offices, 37 city boutiques,
32 town centers and more than 230 mobile kiosks.
JESHIEL (ORG CHART)
Moving on to its Organizational Chart, Ardeur de France
has three key officials. They are headed by Mr. Bismarck
Turingan. He is the Chairman of the Boards, who keeps
an eye on their company's earnings, sustainability, and
progress. He also makes an agenda for board meetings.
Then, the next position is the President. He is Arven
Valmores. He is Mr. Turingan's most senior corporate
officer. He is in charge of putting the board's vision into
action and ensures that their company's budget,
priorities, and vision are maintained. Lastly is the
Marketing Director, who is Poj Obien. Obien is in charge
of creating extremely successful marketing programs to
widen the reach of the business and to have more
distributors.
VANE (BINARY)
A binary structure is a multilevel marketing or network
marketing incentive plan that requires distributors to
have either two direct or first-level distributors. Any
additional distributors sponsored are put below the
sponsoring distributors' first-level distributors. New
distributors are drawn to this idea because it allows them
to earn commissions by sponsoring only two distributors
and allowing those who signed up earlier to have
distributors below them . As we can see in the Ardeur the
France binary structure Marites Fortu has acquired the
most package.
CAROL (FINANCIAL ANALYSIS)
Driven by a profound and unwavering
dedication to making the world a better place, this
business was launched. Ardeur de France just like the
other business experienced unstable income due to
different factors. From 2019, the business run so well and
it generate a great amount of income but due to Covid-
19 pandemic, it affects the whole cycle of the business.
From the financial ratios table of the company,
the current ratio of the prior year (2019) was 1.590 while
the current year (2020) was computed as 1.639. Both
year has a good resulted ratio as current asset was
greater than it’s current liabilities. On the other hand, the
acid test ratio of 2019 was computed as 1.312 and 1.339
for 2020. This means that the quick assets of Ardeur can
cover the current liabilities of the company. When it
comes to debt to equity ratios. 2020 and 2019 has good
ratio with 0.916 and 0.762 respectively. The ratio was said
to be good because the equity is higher than liabilities.
In terms of asset to equity, 1.916 was computed for 2020
and 1.767 in 2019. Lastly, the interest rate coverage ratio
of ardeur was 21.696 and 32.153 respectively for the
years 2020 and 2019.
JESHIEL (VALUE CHAIN)
Value chain analysis serves as a way of adding value to
the products themselves. It is composed of primary and
secondary activities. Ardeur de France has five primary
activities, and the first is inbound logistics. They are
concerned with material processing, warehousing, and
designing. They also make sure that their materials are
stored properly. Next are their operations. They focus
more on their product features. They also prohibit animal
testing and tend to focus on the greening process. The
third primary activity is outbound logistics. Their
outbound logistics is just like what other global company
do. First, they will store the manufactured product. Then,
they will wait for the distributor to send a purchase order,
and the main office will send their orders to their
warehouse. The fourth one is marketing and sales. Ardeur
de France is also effective in recognizing and
capitalizing on changing customer tastes. As of now,
they already have over 100,000 official members or
distributors with 200,000 bottles of perfume sold. The last
primary activity is their Service. They focus on their
members and provide them with high-touch quality
customer service. They also make sure that all officers,
staff, and members are working well. To boost the image
of their brand, they chose Ruru Madrid as their endorser.
 The next main activities involved are secondary.
Firm Infrastructure is the first secondary activity. To
maximize its value through this activity, they make sure
that they keep their operating cost under control. They
also look to different technological advancements so
they can use them efficiently in making their products.
Another secondary activity is human resources. They
have talented and innovative human resources.
Because they have distributors in different parts of the
country, even internationally, they also make sure that
various divisions are well-handled. Next is technology
development. Ardeur de France uses the strategic
modernization initiative (SMI) to maintain enterprise-wide
data integration. Moreover, they currently use design
agencies like in-house research and development
activities to maximize the use of technology. Lastly is the
procurement activity. The business is dependent on
several more suppliers and primarily uses specialty
chemicals, essential oils, and alcohols throughout the
creation of perfume. However, there are also some
resources that exclusively from a single supplier. The
drawback of one single supplier is the possibility of
shortage if ever it failed to cater to the need of the
Ardeur de France.
VANE (SW)
In this part I’ll be defining strength and weakness and
later on I will present Ardeur de France strength and
weakness in the discussion of IFE extensively.
Strengths describes an organization's positive attributes
and where they excel at, making it their advantage and
that distinguishes it from their competitors.
Weaknesses on the other hand, are the areas of the
business that are lacking and need to improve to remain
competitive. It hinders the organization from performing
at its optimum level
HANNAH (VISION AND MISSION)
The importance of developing a vision and mission for a
business is critical for strategic plan. It helps the
employee know the purpose of its existence and core
values on which it is governed. It is a critical component
of a business's strategy since it assists in setting priorities,
allocating resources, and ensuring that everyone works
toward common goals and objectives, so giving a road
map for the future.
As we can notice on the slides, Ardeur de France stated
its vision and mission mostly in outline form. There is not
much to be changed, only the way it should be
presented like most visions and missions of the
organizations. Also, the organization expressed its vision
and mission in the most sincere way. Most importantly, it
met the standards of making a vision and mission which
every individual in the organization could adhere.
CINDY (ANNUAL OBJ)
Annual objectives are usually one part or phase of the
organization’s longer-term goals
Annual objectives are short-term milestones that
organizations must achieve to reach longterm
objectives
We have the strategic and financial objectives since
both of them are vital in the organizations to transform
their mission statement to a more concrete plans and
projects
Strategic objectives
To cater unique customer needs and high level of
service with greater efficiency that provides impressive
quality to the end customers
To continuously enhance the value and quality of the
products they offer
Since objectives should be measurable, quantitative,
realistic or challenging ardeur aim to
VANE (IFE)
the table shows the strength and weakness of Ardeur de
France as well as the Internal Factor Evaluation Matrix.
The IFE Matrix is a useful tool for developing strategies,
hence it is important to perform this activity.
As we analyze the table we can conclude that the two
most important reasons for success in the perfume and
fragrance industry are “experienced formulators,
chemists, and process engineers, and the company uses
imported fragrance oils from France,” and "Their
products are reasonably and competitively priced and
marketable," with a weighted score of 0.40 and .32
respectively according to the table above. “Availability
in domestic and international markets” and “BIR & SEC
Registered” are also strong points for the store.
In terms of their flaws, the store's biggest issue is its
website's lack of visibility, with 0.02 weighted score. This
organization achieves an above-average overall
weighted score of 2.63, indicating that store operations,
plans, policies, and procedures can all be improved.
CINDY (EFE, IE)
External Factor Evaluation matrix summarizes and
evaluates the external factors such as economic, social
or environmental
As we can see the total weighted average is 3.06 which
means that ardeur de france response very well to the
opportunities and threats that exist, firms strategies
effectively take advantage the existing opportunities as
well as they minimize the potential adverse effects of
external threats. One key factor to be successful in this
business is growing adaptability of innovative products
which weights 0.10, since product innovation increases
the chances to react to changes as well as it help to
foster competitive advantage as it allows to build better
products for the customers.
The Internal-External Matrix is based on two key
dimensions: (1) the IFE total weighted scores on the x-axis
and (2) the EFE total weighted scores on the y-axis. As we
can see, Ardeur de france is in region 1 of cell 2 that can
be described as grow and build. Region1 is the best
regions for divisions, hence the most appropriate
strategy for these division are market penetration,
market and product development as well as horizontal,
backward and forward integration. That’s why we can
say that ardeur de france is one of the successful
organizations since the portfolio of their business are
positioned in region 1.
JESH (CORPORATE STRATEGY)
In line with the result of IE Matrix, which shown
that intensive and integrative strategies can be most
appropriate to be its strategies; we came up to
proposed four corporate strategies. Corporate strategies
are set as one of the foundations of a business. The first
corporate strategy is to expand the perfume line’s
exposure. It can be considered as a market
development strategy since the company will introduce
its existing products to different and new markets. For
instance, Ardeur can develop a show booth in a new
market to promote its existing products. They can
encourage people to explore each perfume by
providing enough samples of cards and marketing
materials. Next is to adapt to the trend in advertising and
promoting the business more. Online marketing is one
example of it. They can advertise their product more on
Facebook or Instagram since these platforms are both
popular nowadays. They can also look for influencers
who will promote their products. It can be their aid as
their market penetration strategies. As their marketing is
enhanced and developed, they can gain more
purchases and usages from existing customers. The third
one is to annually introduce new products to existing and
new markets. For instance, as part of their product
development, Ardeur de France can produce a scent of
perfume that suits the weather condition of the target
market. They can also offer personalized products, which
will be a great idea as gifts to customer’s loved ones.
They can also enhance their packaging. If they have
enough capital and resources, they can look and merge
with their suppliers as their backward integration
strategy. It will help to lessen their expenses in developing
the products. Lastly, the business should increase the
visibility of their website. As of now, Ardeur de France’s
website is not that visible. It has less information
compared to other business websites. They should
increase their visibility in a way that customers’ can look
for their products and their prices on the website. It is
beneficial to them if they have options where customers
can write and look for reviews.
KARELEN
61st Slide TITLE
The 5th module of the strategic plan is about the
functional strategy of Ardeur de France.
62nd Slide FINANCE FUNCTION
The finance management is primarily concerned with
two functions. First, is the acquisition of funds necessary
for its operation. And second, is the proper usage of
these funds in order to obtain financial results that
would be attractive to the firm’s present and potential
investors.
63rd Slide STRATEGIES (FIN)
In order to achieve its purpose, the management shall
properly designate their funds to further boost the firm’s
competitive position.
They may also assess their profitability to determine the
areas wherein the funds are not utilized effectively. By
doing these, the management can maximize their
resources and allocate funds where they can generate
more income.
64th Slide MARKETING FUNCTION
Next is the marketing function. It is important as it helps
the company in introducing the business to the market
and establish its relationship with the customers.
65th Slide STRATEGIES (MARK)
There are several strategies they can employ to realize
the objectives of the marketing function.
First, they may set the demographic characteristic of
their target market. Through this, they can establish
market niche which can satisfy the needs of the firm’s
intended market.
They may also come up with a creative product
advertisement, whereas they can also hire artists or
influencers who can represent the firm.
Moreover, they may offer promotions, as well as
freebies and product packages which can be an
effective tool in introducing the firm’s new products.
Lastly, to establish a relationship with the customers, the
firm may open a customer feedback board where they
can freely express their personal experiences with the
services and products of the business. This can help the
company in improving their products, and in
establishing their credibility to the future customers.
66th Slide HUMAN RESOURCE FUNCTION
Human resource, on the other hand, focuses on
improving the workforce of the company to ensure that
all plans established by the management are being
implemented effectively
67th Slide STRATEGIES (HR)
The management may perform the following strategies:
They may assess the knowledge, skills and abilities of the
employees and distributors to know if they are efficient.
Accordingly, they may also conduct webinars and
trainings depending on their assessed abilities to work
on their weaknesses, and be able to use their learnings
to the firm’s operations.
68th Slide OPERATIONS FUNCTION
The last business function is operations function. It
manages the usage of the available resources in order
to maximize the firm’s production of goods and
services.
69th Slide STRATEGIES (OPE)
The management may offer their products in a
competitive price to gain advantage over the
competitors. They may also invest in research and
development to produce a product in a lower cost
without losing its quality. By doing so, they can offer
their products in a cheaper price, increase market
share, and consequently, increase their income.
They may also use social media platforms in updating
the firm’s available products to easily accommodate
the customers. Aside from this, they shall monitor the
inventory levels of the product to avoid stock outs.
Lastly, they may check the progress they have made
during the period to know which strategies had positive
results to the operations.
CAROL (BALANCED SCORECARD)
A balanced scorecard is a strategic management
performance metric that helps companies identify and
improve their internal operations to help their external
outcomes. With this, Ardeur de France contains 6
perspective namely, customer, members/ distributor,
operations/ process, community/ social responsibility,
business ethics/ natural environment and financial.
Under customer, we have a measure of target of
increasing new customers by 15% on the 1 st quarter of
2021. And then, to recruit new member and distributors
by adding 10-20 members on the 1st quarter of 2021. On
it’s operations/ process, Ardeur plans to have new
Batangas Branch amid pandemic by opening branches
in Bauan, Tagaytay City and Sto. Tomas By the end of
2021 to 1st quarter of 2022. Unde community/ social
responsibility, Ardeur has to increase it’s monetary
contribution by 5% in fundin for community programs on
the 2nd quarter of 2021. Business ethics/ natural
environment talks about offering eco-friendly packaging
by adopting the packaging or ardeur world on it’s 1st
quarter of 2021. Lastly, is to reduce It’s operating costs to
increase net profit by reducing amount spent on
operating expenses by 15% by the end of 2021. All pf
these are responsible of batangas city branch head Mrs.
Marites Aguado Fortu.
KARELEN (FP)
73rd Slide FINANCIAL PROJECTIONS
The last module contains the financial projections of
Ardeur de France for the three upcoming years of its
operations.
74th Slide INCOME STATEMENT
The researchers used the 2018,2019 and 2020 financial
statements of Ardeur de France as the basis of the
firm’s projected amounts from 2021 to 2023.
For the first year of projection, year 2021, the
researchers used weighted moving average method of
forecasting. It is deemed effective in obtaining more
timely and relevant financial data as it gives greater
weight on the recent data and lesser weight on the
older data.
Since the company was greatly affected by the
pandemic during 2020, it has recorded a 19% decrease
in the firm’s total net sales compared to 2019.
During the past year, the company incurred higher
operating expenses, while generating lesser income.
Until now, the pandemic is still ongoing, there are
community restrictions, and economic instability.
Hence, these events were considered in the forecast as
this recent financial statement of the company, having
more weight than the older years where such event has
not yet taken place, reflects the present condition of
the industry.
Therefore, the computed amounts in the 2021 forecast,
show more accurate measure of financial information
as the aforementioned conditions can affect the
operations of the business in the succeeding years.
For the year 2022 and 2023, the researchers used 5%
growth rate in the projected income statement. During
these years, the management would be focusing on
the marketing of their products, thus, they expect that
the selling expenses will also increase. However, due to
this strategy, the management may generate more
income which can cover these expenses.
Possibly, there are still risks of economic instability, so the
5% growth rate is just an optimal measure of forecasting
revenues and expenses, and it still shows the results of
the management’s effort to increase the sales of the
company.
DAR (FP)
For the statement of financial position, we calculated
the year 2021 projection using a weighted moving
average method. Each of the observations used to
compute the forecasted value is weighted equally when
using the moving average process. In certain cases, it
might be useful to place more emphasis on findings that
are closer to the forecasted time frame as this yields a
much smoother estimate of the trend-cycle. In the years
2022- and 2023, projection was calculated using the
projected outcomes of the policies and plans to be
implemented during those time periods.
In arriving at these values, we consider the following key
assumptions:
Businesses are expected to resume normal operations in
2022, assuming all goes well. Operations will resume
smoothly by then, so current assets such as inventories
are expected to grow significantly in comparison to
other current assets such as cash, ar, and investments. As
you can see in the numbers, inventories grew a lot
compared to other assets.
When it comes to Noncurrent assets such as property
and equipment, goodwill, and other intangible assets,
these are expected to grow a lot too as a result of the
increase in new franchisees and distributors.

In the liabilities section, Of course, as spending increases,

payables are expected to increase significantly as well,
as reflected in the projections for both 2022 and 2023.
Aside from that, all other accounts grow normally.

In the stockholders equity account, as stated earlier, net

income is expected to grow significantly too and other
than that, others grow just as usual.

All in all, these projections are just purely estimates, it will

still vary depending on different factors that can directly
affect the operation of the business.