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  • Brillantes, Isabella Francesca C. Paraso, Noelle Patricia E

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    This document compares the projected sales, costs, and profits of a niche razor and cartridge company versus a mainstream company for their first year. For the niche company, gross sales are projected to be $208 million with a profit of $29.6 million. For the mainstream company, gross sales are projected to be $257 million but with a lower profit of $11.8 million due to higher advertising and production costs and cannibalization effects. The document provides financial projections including unit volumes, prices, revenues, costs and profits for both companies.

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    Clean Edge P&L

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    This document compares the projected sales, costs, and profits of a niche razor and cartridge company versus a mainstream company for their first year. For the niche company, gross sales are projected to be $208 million with a profit of $29.6 million. For the mainstream company, gross sales are projected to be $257 million but with a lower profit of $11.8 million due to higher advertising and production costs and cannibalization effects. The document provides financial projections including unit volumes, prices, revenues, costs and profits for both companies.

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    © All Rights Reserved
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    50 views1 page

    Brillantes, Isabella Francesca C. Paraso, Noelle Patricia E

    Uploaded by

    Bella Brillantes
    This document compares the projected sales, costs, and profits of a niche razor and cartridge company versus a mainstream company for their first year. For the niche company, gross sales are projected to be $208 million with a profit of $29.6 million. For the mainstream company, gross sales are projected to be $257 million but with a lower profit of $11.8 million due to higher advertising and production costs and cannibalization effects. The document provides financial projections including unit volumes, prices, revenues, costs and profits for both companies.

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    © All Rights Reserved
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    of 1

    Brillantes, Isabella Francesca C.

    Paraso, Noelle Patricia E.

    Niche Mainstream
    Pro & Avail Clean Edge (Niche) Total Company Pro & Avail Clean Edge (Mainstream) Total Company
    2009 Year 1 Year 1 2009 Year 1 Year 1
    Razor Cartridge Razor Cartridge Razor Cartridge Razor Cartridge Razor Cartridge Razor Cartridge
    Unit Volume N/A N/A 1,000,000.00 4,000,000.00 N/A N/A 3,300,000.00 9,900,000.00
    Price per unit (Manufacturer Price) N/A N/A $9.09 $7.35 N/A N/A $7.83 $6.22
    Gross Sales per Unit N/A N/A $9,090,000.00 $29,400,000.00 N/A N/A $25,839,000.00 $61,578,000.00
    GROSS SALES $170,000,000.00 $38,490,000.00 $208,490,000.00 $170,000,000.00 $87,417,000.00 $257,417,000.00

    Production Cost per unit N/A N/A $5.00 $2.43 N/A N/A $4.74 $2.24
    Overall production cost per variable N/A N/A $5,000,000.00 $9,720,000.00 N/A N/A $15,642,000.00 $22,176,000.00
    Gross Production Cost N/A $14,720,000.00 N/A $37,818,000.00
    Capacity Costs N/A $610,000.00 N/A $1,710,000.00
    TOTAL COGS $78,000,000.00 $15,330,000.00 $93,330,000.00 $78,000,000.00 $39,528,000.00 $117,528,000.00

    GROSS PROFIT $92,000,000.00 $23,160,000.00 $115,160,000.00 $92,000,000.00 $47,889,000.00 $139,889,000.00


    GROSS MARGINS 54.12% 60.17% 55.24% 54.12% 54.78% 54.34%

    Advertising $19,100,000.00 $7,000,000.00 $19,100,000.00 $19,000,000.00


    Consumer Promotions $11,500,000.00 $6,000,000.00 $11,500,000.00 $17,000,000.00
    Trade Promotions $13,700,000.00 $2,000,000.00 $13,700,000.00 $6,000,000.00
    TOTAL A&P $44,300,000.00 $15,000,000.00 $59,300,000.00 $44,300,000.00 $42,000,000.00 $86,300,000.00
    SG&A (OPEX) $21,700,000.00 $26,236,000.00 $21,700,000.00 $21,700,000.00
    TOTAL COSTS $144,000,000.00 $30,330,000.00 $85,536,000.00 $144,000,000.00 $81,528,000.00 $108,000,000.00

    Operating Profit $26,000,000.00 $8,160,000.00 $29,624,000.00 $26,000,000.00 $5,889,000.00 $11,770,371.20


    Profit as % of sales 15% 21% 14% 15% 7% 5%

    CANNIBALIZATION EFFECT Cartridge Razor Razor Cartridge


    Unit Volume 1,000,000.00 4,000,000.00 3,300,300.00 9,900,900.00
    Profit per unit for Pro and Avail $1.76 $2.80 $1.76 $2.80

    Cannibalization Rate 0.35 0.35 0.60 0.60


    Cannibalization Cost $616,000.00 $3,920,000.00 $3,485,116.80 $16,633,512.00

    Overall Cannibalization Cost $4,536,000.00 $20,118,628.80


    Profit After Cannibalization

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