In the July 2017 forecast scenario for American Eagle Outfitters, using the model's assumptions, what is gross profit for the year ending 1/31/2023?

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Multiple Choice

In the July 2017 forecast scenario for American Eagle Outfitters, using the model's assumptions, what is gross profit for the year ending 1/31/2023?

Explanation:
Gross profit comes from net sales minus cost of goods sold. In this forecast model, you use the July 2017 assumptions by applying the projected net sales for the year ending 1/31/2023 to the gross margin (or equivalently subtract the forecasted COGS as a percentage of net sales). Doing that with the model’s revenue and margin for that year gives a gross profit of 1,709,188. The other numbers would require either a higher revenue or a higher gross margin than the scenario provides.

Gross profit comes from net sales minus cost of goods sold. In this forecast model, you use the July 2017 assumptions by applying the projected net sales for the year ending 1/31/2023 to the gross margin (or equivalently subtract the forecasted COGS as a percentage of net sales). Doing that with the model’s revenue and margin for that year gives a gross profit of 1,709,188. The other numbers would require either a higher revenue or a higher gross margin than the scenario provides.

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