Read the case for Hooper\'s Outdoor Adventure store and answer the questions tha
ID: 386316 • Letter: R
Question
Read the case for Hooper's Outdoor Adventure store and answer the questions that follow.
Robert Hooper started Hooper's Outdoor Adventure in 1985. Hooper's carries an excellent selection of equipment for camping, backpacking, climbing, canoeing, skiing, and traveling. In the last 25 years, Hooper's has grown to include four full service retail locations. Hooper's services a major metropolitan area and several surrounding communities in the northern region of his state.
Robert opened Hooper's when he was 35 years old. He opened Hooper's for a few reasons. First, he and his family are enthusiastic outdoor lovers. Robert, his wife, and three children will spend the majority of their free time camping, hiking, or kayaking. Second, Robert knew that he did not want to work at an office job for the rest of his life. Third, Robert is a firm proponent of conservation and sustainability, and he wanted to open a store that supported that. Fourth, he noted that whenever he bought camping equipment from the discount or department stores in his town, the sales associates were not helpful and were often ignorant about the products.
Since Robert opened, his store has been a huge success. He is a well-known advocate of community efforts. The store is renowned in the state for their product knowledge, product assortment, and customer service. Robert has taken a conservative approach with expanding the store and only borrowing to the purchases of new buildings. His only outstanding accounts receivables are to the local university who purchase their outdoor supplies from him and are always prompt with payment.
Now Robert is considering retirement. Before he retires though, he would like to expand the store so that each of his three children have some financial security and have several stores to each to manage on their own. He would like to expand the store by adding three new stores; one in the southern part of the state, one in the neighboring state to the north, and one in the neighboring state to the east.
Robert has prepared the income statements and balance sheets for his four operations. Robert is preparing to present this information to a group of investors to help fund the expansion.
1.
In addition to his financial goals of supporting his family with Hooper's Outdoor Adventure, Robert Hooper also had ______________________ objectives for opening the store.
2.
What is the difference in gross margin at Hooper's Outdoor Adventure from 2009 to 2010?
3.
How much does Hooper's have in total current assets for 2010?
4.
What is the net profit margin percent for 2010 for Hooper's Outdoor Adventure?
5.
What is the operating profit margin as a percentage of sales for Hooper's Outdoor Adventure in 2010?
HOOPER'S OUTDOOR ADVENTURE HOOPER'S OUTDOOR ADVENTURE Balance Sheet Income statement 2010 $4.810 $2.407 $2.403 $1,770 2010 $480 $180 2.005 $85 $2.751 $42 $2,793 2009 410 150 $1.940 $80 $2.580 $38 2,618 $1.090 S50 $5 $1,473 2009 $4,650 $2.320 $2.330 $1 Cash Accounts Receivable Net Sales Cost of Goods Sold Gross Margin Operating Expenses Selling, General, and Administrative Operating Profit Margin nterest Taxes Net Profit Invento Other Current Assets Total Current Assets Other Assets Total Assets Current Liabilities Long-term Debt Other Liabilities Equity 710 $633$620Cutrent Liabilities31.330 $81 $203 $349 $78 $198 $32 $10 $1,421Explanation / Answer
1. Personal / Personal development
In addition to his financial goals of supporting his family with Hooper's Outdoor Adventure, Robert Hooper also had ______Personal development______ objectives for opening the store.
Robert Hooper wanted to open these stores for personal reasons such as his interest in outdoor activities, need to avoid regular office job and being an advocate of community effort and sustainability which would be fulfilled by the store.
2. The gross margin at Hooper's Outdoor Adventure in 2009 was $2330 and 2010 was $2403.
The difference in gross margin at Hooper's Outdoor Adventure from 2009 to 2010 = gross margin in 2010 - gross margin in 2009 = $2403 - $2330 = $73
3. The total current assets of Hooper's in 2010 = sum of ( cash + account receivable + inventory + other current assets = $480 + $180 + $2006 + $85 = $2751
4. Net profit margin % for 2010 for Hooper's Outdoor Adventure = (Net profit in 2010 - Net profit in 2009) /Net profit in 2009 *100 = 1.45%
5. Operating profit Margin in 2010 = $633
Net Sales in 2010 = $4810
Operating profit margin as a percentage of sales for Hooper's Outdoor Adventure in 2010 = ( Operating profit Margin in 2010 / Net Sales in 2010) *100 = $633/ $4810 *100 = 13.2%
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