Investor Report for Pet Haven Supplies (Other (Not Listed) Sample)

Investor Report for Pet Haven Supplies [Your Name] Southern New Hampshire University Introduction Our company majors in eco-friendly pet products. We seek top-class and functional solutions that would make a difference in everyday living. We envision building a strong brand within the eco-friendly market through continuous innovation and product development without ever compromising on our sustainability. We see our products as an irrevocable part of everyone's future, in every home, to better the health of our planet. We'll expand our reach through strategic partnerships while being careful to continue sustainably growing our product line. Purpose The purpose of this report is to convey the financial performance of our company to its investors and stakeholders, emphasizing our compliance with preliminary estimates. Accounting information is very important because it helps in clearly seeing the health of a business; such disclosure will increase confidence among its investors by guiding any strategic decisions properly. Methods and Approach In preparing our financial report, we used some management accounting techniques like variable and fixed cost analysis to probe into the cost structure, contribution margin analysis for assessing profitability, and break-even analysis to work out how much sales volume needs to be recovered to cover the same cost. We also compiled a Statement of Cost of Goods Sold and an Income Statement so that all our financial activities are represented at one glance. In our variance analysis, we were guided on performance versus budgetary projections. During this exercise, we observed the industry standards and the AICPA code of ethics, ensuring accuracy, transparency, and integrity in our financial reporting. Financial Strategy In reviewing our original business plan with costing strategies, it is important to integrate the concept of sticky costs (Rounaghi et al., 2021). Our business plan was founded on the direct division of fluctuating costs into straight-line changes in sales. Now, realizing that fast-escalating costs do not drop as quickly as they climb, we provide a more informed approach. The strategy should consider a natural human aversion to spending less on resources during the downturn. Such stickiness might be handled by designing flexibility in workforce strategy and allowance for alternate deployment of resources. Temporary contracts or multi-skilling workers in some functions could provide room for flexibility while maintaining productivity. A well-thought-out cost management system may include tools such as activity-based costing and kaizen costing to outline exactly the inefficiencies in operations (Rounaghi et al., 2021). This helps in making conscious, proper decisions based on long-term goals by understanding the drivers of structural and administrative costs. We have to refocus our competitive strategy towards differentiation and the creation of value so that any cost reduction should not affect the quality and uniqueness of our products. This could not only help retain control over costs but also improve market positioning due to customer satisfaction and loyalty. By recognizing cost stickiness and applying the strategic management tools at our disposal, we will be able to develop a robust and flexible business model that will be capable of supporting sustainable growth and profitability. Costing System Job order costing could best be described as the most effective cost accounting system for our pet products business since it can assign costs to unique and customized products. This system works particularly well where the deliverables are distinctive products or services, and hence finds it easier to keep a closer track of the materials, labor, and overhead associated with the orders (Eydman, 2016). However, since there is a high possibility of the subject pet products being highly customized, the job order costing gives a proper reflection of the details of input costs for each subject item. In job order costing, we will be able to trace costs accurately by creating a job cost sheet for every order (Eydman, 2016). This captures direct materials, like fabric or stuffing, and direct labor in the form of sewing or assembly time. Overhead would then be allocated based on some cost driver, such as the number of hours spent with a machine to make these items. This provides detailed tracking to permit pricing to be transparently based on which exact resources are consumed in order from the customer. In contrast, process costing will be less suitable for our business. It aggregates costs across a continuous production process, typically used for homogeneous products like soap or chemicals (Eydman, 2016). Because process costing averages the cost across thousands of identical items, it becomes very difficult to track unique product costs in such a system. Job order costing will provide more accuracy and relevance for our pet products business, where customization and differentiation of the products are key. Ultimately, job order costing will give our business the flexibility of the pricing and production structure that makes sure each product cost structure is unique (Eydman, 2016). This approach will enhance our capability of meeting customer expectations, as it delivers tailored products with transparency in their pricing, an edge our business gets against competitors employing more standardized costing approaches. Selling Prices * Collars $20 * Leashes $22 * Harnesses $25 I had to be very careful about market expectations regarding selling prices for collars, leashes, and harnesses while working within our cost structure. Those prices were positioned so that they would provide a competitive advantage in terms of better profitability. At a selling price of $20 each for the collar, the contribution margin would be $10.90 per unit. This can be calculated by taking the selling price and subtracting the variable cost per unit, which is $9.10 in this case. Based on this break-even analysis, we are looking at 370 units if we are to recover fixed costs and 398 units if we are to realize profits pegged at $300. Theoretically, this price will balance customers' ability to afford with an adequate margin, that is, to hit profitability targets. Leashes sell for $22, providing a contribution margin of $9.90. At this price, with a variable cost of $12.10, we will cover our fixed costs of $4,028 with a break-even point of 407 units. To achieve a target profit of $400, we must sell 448 units at this price. This price is competitive in the market and yields an adequate return to help us achieve our financial goals. The contribution margin on harnesses, which sell for $25, rounds out at $10.40. Variable costs are $14.60, and we would need to sell 405 units to break even and 453 to hit the target profit of $500. This pricing strategy reflects added value and more quality perceived in harnesses, thus letting us capture a market demand while covering the costs and ensuring a profit. Contribution Margin The contribution margin is the sales price per unit minus the variable cost per unit. It is $10.90 for the collar, $9.90 for the leash, and $10.40 for the harness. This will tell how much each of these products will contribute towards covering fixed costs and then a profit. I computed break-even points and levels of target profit through cost-volume-profit analysis, showing how changes in costs and selling prices affect profitability and, hence, the process of making decisions. Target Profits Break-even analysis to realize the targeted profits holds that for collars, leashes, and harnesses, the required units are to make a $300 profit, 398, 448, and 453 units of collars, leashes, and harnesses, respectively. For a profit of $500, these figures rise to 416, 468, and 467 for the respective products. These targets were chosen based on cost-volume-profit analysis, considering contribution margins of $10.90 for the collars, $9.90 for the leashes, and $10.40 for harnesses. This will cover fixed costs of $4,028 for the collars and leashes and $4,202 for harnesses, with a desired level of profits. The realistic setting of profit targets is important in keeping the business and maximizing the utilization of resources subject to market demand and price competitiveness. Financial Statements Statement of Cost of Goods Sold Using the Statement of Cost of Goods Sold, the total costs came to $28,259 for the month, which then was the COGS, since there was no ending work in process inventory. The actual COGS would be compared to budgeted benchmarks to assess performance. If the budgeted COGS was roughly around $28,259, it has been managed effectively and stayed within expected budgetary ranges. However, if it overshoots the budget significantly, then it will truly imply that the spending on materials, labor, or overhead is higher than expected because of inefficiencies or maybe unexpected expenses. On the other hand, when actual COGS comes in lower than budgeted, that may signal cost-saving measures or operational efficiencies. Income Statement According to the income statement, total revenues are $38,020, and gross profit is $9,761, which indicates good cost management in relation to sales. After including expenses of $5,715, net income was $4,046. That means that although the company maintained a sound revenue stream and controlled direct costs quite effectively, there is a scope for improving its structure toward reducing operating expenses to boost net income further. To assess performance...