Project Part 1
Onyx Corporation, a promising young jewelry company, has recently finished its second year of business with less than satisfactory figures on their financial statements. While the company’s assets increased from their initial year of business to their second year, their liabilities also increased. The owners of the company were disappointed to note that the company’s income statement showed a rather significant loss from the previous year (nearly $322,000 more) and both years have had seriously negative net incomes. The owners of the company expected a loss in their first year of business due to the initial costs of opening the business; however, they were rather surprised by this year’s increased loss.
In order to reduce losses for the organization and begin to make a profit from sales, Onyx Corporation has hired you as a consultant to create a business plan for the company as it moves forward. The owners have informed you that, based on their preliminary findings, their sales appear to follow a seasonal trend with higher sales focused around holidays, specifically Christmas and Valentine’s Day. The company’s sales for the rest of the year seem to be fairly evenly distributed. Although their sales only decreased by $13,000, the company would like you to identify possible reasons why their gross profit for the year was $43,000 lower than the previous year and how they can increase their profit in the future.
Additionally, the company is particularly interested in how they can minimize their advertisement expenses while still attracting customers. The company’s current marketing plan does not seem to be attracting enough customers to increase sales, and therefore the organization is worried that too much money is being spent where it is ineffective. Many of the customers that do visit the store only browse the selection of jewelry but do not actually buy anything. The owners have provided their current marketing plan issues for you to review and offer suggestions for improvements as the company designs its advertisements for the coming year.
In addition to these specific requests, the company would also like you to point out any issues from the marketing plan, balance sheet, or income statement you have noticed that you think the owners should be aware of and your recommendations for improvements. Any suggestions you provide will be helpful for the organization as they make changes for the future of the organization.