Page 9 - Sales Proposal - Craft Wicker and Things Limited

With very minimal marketing effort, Craft Wicker and Things Limited has a reported a 9% increase in sales over the period 2017 to 2018 which resulted in growth in net profit of 27%. Administrative expenses is the largest expense category which represents 61% of sales in 2017 and 58% in 2018.
The company however enjoys high margins due to its ability to properly source and purchase its raw material, resulting in cost of sales representing 24% and 23% of sales in 2017 and 2018 respectively.
Raw materials are sourced overseas, so upward movement in the price of the dollar will impact the cost of sales. Management must exercise good purchasing strategies to mitigate any serious impact on the costs. Interestingly with just a few players, factors that affect one affect all, and so any increase in price due to a depreciating dollar will affect selling prices across all players in the market.