Scenario 6.1 Use the Following to Answer the Questions

question 80

Multiple Choice

Scenario 6.1
Use the following to answer the questions.
Lil' Angels Kids Spa offers various treatments designed to appeal to the younger customer.Treatment options include manicures,pedicures,facials,tea parties,and dress up photos.Parents can even purchase a birthday party package.Currently,Lil' Angels offers its services only to girls under the age of 14.Originally begun in Delaware,Lil' Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to 17.The company realizes that some changes may be needed.For example,management wants to find out if the older girls will be interested in their birthday party and tea party services.
-Refer to Scenario 6.1.What method should Lil' Angels use to forecast sales in new regions?

• A)Sales force survey
• B)Time series analysis
• C)Correlation method
• D)Market test
• E)Regression analysis

---

Definitions:

Pro Forma Earnings

Financial results excluding one-time events to give investors an idea of a company's normal earnings potential.

Basic EPS

Basic Earnings Per Share, a calculation that shows how much earnings are available to common stockholders, on a per-share basis.

Sustainable Earnings

Earnings resulting from the core operations of a company, expected to continue into the future without significant variation.

Equity Change

Refers to the movement in a company’s equity value over a period of time due to factors like earnings, share buybacks, and dividends.