CHLOE’S CLOSET

(GROUP 3)
 Chloe Mendez
owns a clothing
company, Chloe’’s closet.
She has a team of tailor
who work for 8 hours
everyday from Monday
to Saturday. Demand for
her business is strong
but there seems to be
something preventing
 Chloe sells to both
building department
stores and small boutique
stores under the brand
Chloe’s closet. Some
brands also ask her to
manufacture their own
design. Business for Chloe
has been good since it
started last 2014. In fact,
despite the tough
 On December 4 2015, Chloe
received a billing investment from a
raw material supplier for an amount
of PHP 400 000 which will be due in
5 days. She is also scheduled to pay
her employee’s monthly salary of
PHP 70 000 the following day. Upon
checking her bank account, she only
has a PHP 67 000 balance. She
knew she had exceeded her sales
target last October and November so
 WAS HER MONEY STOLEN?

Being a CPA, she checked the bank statement and her financial records and found no mistakes.

Here is the latest financial statement of Chloe’s Closet as of November 30, 2015:
STATEMENT OF
FINANCIAL
POSITION

INCOME
STATEMENT
VERTICAL ANALYSIS
HORIZONTAL ANALYSIS
 IN THIS CASE:
Account Receivables Account Payables
YEAR TURNOVER DAYS YEAR TURNOVER DAYS
RATIO RATIO
2014 1.20 300 2014 0.45 800
2015 1.08 333 2015 0.75 480

Inventory
YEAR TURNOVER DAYS
FACTORS TO LOW
RATIO CASH BALANCE
2014 0.56 643
2015 0.5 720
 CONCLUSION
Due to the increase in accounts
payable turnover ratio, decrease in accounts
receivables turnover ratio and decrease in
inventory turnover ratio, we can conclude
that Chloe's closet degraded their
performance in 2015. They focused on sales
without considering these factors.