9. You decided to pay yourself as the Restaurant Manager $2,500/mth until business grew. 10. Sales...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
9. You decided to pay yourself as the Restaurant Manager $2,500/mth until business grew. 10. Sales began slowly as can be expected in January, but picked up after March. The average sell- ing price per meal was $12. For the year, sales averaged $30,000 per month. 11. The cost of the goods sold was not very high, averaging 20% of sales. 12. Utility costs were as follows: Electricity $250/mth; Gas $300/mth; Water $200/mth; Telephone and Internet $300/mth. 13. Property and Liability Insurance: $1,800/yr. 14. Your vehicle expenses for gas, maintenance and car insurance totalled $4,000 for 2021. 15. As a small business, your Federal Tax rate is 9% and your Provincial Tax rate is 3%. 16. As of December 31 2021, you had no accounts receivable from your customers, but you owed your food and beverage suppliers $3,500. All other expenses were fully paid up. Your inventory of food and beverage ingredients amounted to $2,500. Income Statement Sales Less COGS Gross Profit Less Expenses (List) Total Expenses Net Profit Before Tax Taxes $$ Balance Sheet $$ Current Assets (List) Fixed Assets (List) Less Depreciation Total Assets the following sin Current Liabilities (List) Long Term Liabilities (List) Owners Equity Retained Earnings Net Profit After Tax Total Liabilities and Equity Managing Strategically Capstone - BMGT 265 Financial Analysis SANTONIA, Claire Name: Student #: No1580040 Objectives: Being able to read and analyze financial statements is an important skill for managers and investors. The objectives of this assignment are therefore to: 1. To assess your understanding of financial statements 2. To use financial statements to calculate financial ratios 3. To refresh calculation of breakeven analysis 4. To understand the different methods of valuing a business 1. Use the information below to create an Income Statement and Balance Sheet at the end of the first year of your new business You have just completed your first year in your own business. You have used all your experience work- ing at McDonald's and Tim Horton's to fulfil your dream of having open your own restaurant. All your friends and family said you won't be able to compete against the big chains, but you managed to survive your first year of business. But you do not really know if you made money or not, or how best to finance future expansion. So you thought it would be best to draft an income statement and balance sheet using the principles you learnt in your accounting and finance courses at Humber College. Use the information below to draft your fist year income statement and balance sheet for January 1 to December 31, 2021. On your Income Statement, be sure to detail your sales, COGS, Gross Profit, Expenses, Net Profit before tax, Net profit after tax. On your Balance Sheet, be sure to detail your Fixed Assets, Current Assets, Liabilities, Retained Earnings and Equity. Your first year of business went like this: 1. You decided to use your savings of $20,000 to start your new restaurant. 2. You registered your business as a Corporation, with 20,000 nominal shares of $1 each. 3. You went to your bank with your business plan to request a loan. They rejected your request as you did not have enough capital, collateral or credit history with the bank. 4. Your family gave you $30,000 to start your business. They did not expect any interest, but ex- pected to be paid back over the next 5 years. 5. You found a great location in Toronto to rent for $4,000 per month. You purchased the following: a. Stoves, fridges, freezers and other kitchen equipment for $15,000 to be depreciated at 20% per year. b. Tables, chairs and other furniture for $10,000, to be depreciated at 10% per year. c. Signage and fixtures for $5,000, to be depreciated at 10% per year. d. Cutlery, utensils, wares, pots, pans, menu's etc. for $5,000. These are expensed in the first year. e. You used your own car for your business which was valued at $5,000, and is to be depre- ciated at 20% per year. 6. You opened your restaurant on January 1, 2021 7. You launched your website and started advertising your opening specials on Social Media and your local community newspapers. Your spent $5,000 in marketing expenses in 2021. 8. You hired two employees, one for the kitchen and another to serve customers. You would fill in as required. You paid your employees $15 an hour. They worked 10 hours/day from 11 am - 9pm 6 days a week. 2 Use the financial statements above to calculate the following measures: Measure 1. Current Ratio 2. Debt to Equity Ratio 3. Gross Margin 4. Return on Sales (ROS) 5. Return on Equity (ROE) 6. Earnings per Share (EPS) 7. Price Earnings Ratio (PE) Formula Current assets / current liabilities Total debt/total equity Gross profit/ sales Net profit/ sales Net profit/total equity Net profit/ shares outstanding Share Price/EPS Value 3. The general formula for calculating break-even units is Break-Even Units = Total Fixed Costs / (Unit Selling Price Unit Variable Cost). Considering the variable costs, fixed costs and average monthly sales, how much sales are required monthly to break even? Show your working. State your assump- tions. - 4. Calculate the value of this business using the following simplified (rule of thumb) measures: Measure 1. Cash Flow 2. Earnings Multiplier Formula 3 x (Net Profit + Depreciation + Bank Interest) 5x EPS x Shares Outstanding Value 3. Market Value 4. Book Value Share price x Shares Outstanding Assets Liabilities 9. You decided to pay yourself as the Restaurant Manager $2,500/mth until business grew. 10. Sales began slowly as can be expected in January, but picked up after March. The average sell- ing price per meal was $12. For the year, sales averaged $30,000 per month. 11. The cost of the goods sold was not very high, averaging 20% of sales. 12. Utility costs were as follows: Electricity $250/mth; Gas $300/mth; Water $200/mth; Telephone and Internet $300/mth. 13. Property and Liability Insurance: $1,800/yr. 14. Your vehicle expenses for gas, maintenance and car insurance totalled $4,000 for 2021. 15. As a small business, your Federal Tax rate is 9% and your Provincial Tax rate is 3%. 16. As of December 31 2021, you had no accounts receivable from your customers, but you owed your food and beverage suppliers $3,500. All other expenses were fully paid up. Your inventory of food and beverage ingredients amounted to $2,500. Income Statement Sales Less COGS Gross Profit Less Expenses (List) Total Expenses Net Profit Before Tax Taxes $$ Balance Sheet $$ Current Assets (List) Fixed Assets (List) Less Depreciation Total Assets the following sin Current Liabilities (List) Long Term Liabilities (List) Owners Equity Retained Earnings Net Profit After Tax Total Liabilities and Equity Managing Strategically Capstone - BMGT 265 Financial Analysis SANTONIA, Claire Name: Student #: No1580040 Objectives: Being able to read and analyze financial statements is an important skill for managers and investors. The objectives of this assignment are therefore to: 1. To assess your understanding of financial statements 2. To use financial statements to calculate financial ratios 3. To refresh calculation of breakeven analysis 4. To understand the different methods of valuing a business 1. Use the information below to create an Income Statement and Balance Sheet at the end of the first year of your new business You have just completed your first year in your own business. You have used all your experience work- ing at McDonald's and Tim Horton's to fulfil your dream of having open your own restaurant. All your friends and family said you won't be able to compete against the big chains, but you managed to survive your first year of business. But you do not really know if you made money or not, or how best to finance future expansion. So you thought it would be best to draft an income statement and balance sheet using the principles you learnt in your accounting and finance courses at Humber College. Use the information below to draft your fist year income statement and balance sheet for January 1 to December 31, 2021. On your Income Statement, be sure to detail your sales, COGS, Gross Profit, Expenses, Net Profit before tax, Net profit after tax. On your Balance Sheet, be sure to detail your Fixed Assets, Current Assets, Liabilities, Retained Earnings and Equity. Your first year of business went like this: 1. You decided to use your savings of $20,000 to start your new restaurant. 2. You registered your business as a Corporation, with 20,000 nominal shares of $1 each. 3. You went to your bank with your business plan to request a loan. They rejected your request as you did not have enough capital, collateral or credit history with the bank. 4. Your family gave you $30,000 to start your business. They did not expect any interest, but ex- pected to be paid back over the next 5 years. 5. You found a great location in Toronto to rent for $4,000 per month. You purchased the following: a. Stoves, fridges, freezers and other kitchen equipment for $15,000 to be depreciated at 20% per year. b. Tables, chairs and other furniture for $10,000, to be depreciated at 10% per year. c. Signage and fixtures for $5,000, to be depreciated at 10% per year. d. Cutlery, utensils, wares, pots, pans, menu's etc. for $5,000. These are expensed in the first year. e. You used your own car for your business which was valued at $5,000, and is to be depre- ciated at 20% per year. 6. You opened your restaurant on January 1, 2021 7. You launched your website and started advertising your opening specials on Social Media and your local community newspapers. Your spent $5,000 in marketing expenses in 2021. 8. You hired two employees, one for the kitchen and another to serve customers. You would fill in as required. You paid your employees $15 an hour. They worked 10 hours/day from 11 am - 9pm 6 days a week. 2 Use the financial statements above to calculate the following measures: Measure 1. Current Ratio 2. Debt to Equity Ratio 3. Gross Margin 4. Return on Sales (ROS) 5. Return on Equity (ROE) 6. Earnings per Share (EPS) 7. Price Earnings Ratio (PE) Formula Current assets / current liabilities Total debt/total equity Gross profit/ sales Net profit/ sales Net profit/total equity Net profit/ shares outstanding Share Price/EPS Value 3. The general formula for calculating break-even units is Break-Even Units = Total Fixed Costs / (Unit Selling Price Unit Variable Cost). Considering the variable costs, fixed costs and average monthly sales, how much sales are required monthly to break even? Show your working. State your assump- tions. - 4. Calculate the value of this business using the following simplified (rule of thumb) measures: Measure 1. Cash Flow 2. Earnings Multiplier Formula 3 x (Net Profit + Depreciation + Bank Interest) 5x EPS x Shares Outstanding Value 3. Market Value 4. Book Value Share price x Shares Outstanding Assets Liabilities
Expert Answer:
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
Students also viewed these accounting questions
-
Use the information below to draft your fist year income statement and balance sheet for January 1 to December 31, 2020. On your Income Statement, be sure to detail your sales, COGS, Gross Profit,...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement in the previous problem, supply the missing information using the percentage of sales...
-
On March 31, Katherine Bertolla retires from the partnership of Bertolla, Callahan, and Khazeie. The partner capital balances are Bertolla, $34,000; Callahan, $45,000; and Khazeie, $21,000. The...
-
If the demand function is P = 3000 - 2Q find expressions for TR and MR. Calculate the marginal revenue when Q = 9 and give an interpretation of this result.
-
Plaintiff grounds manager sued a manufacturer, Monsanto, alleging that herbicide use caused his non-Hodgkins lymphoma. The jury awarded the plaintiff \($39.3\) million in compensatory damages and...
-
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the companys normal activity level of 60,000 units per year is: The normal selling price is...
-
2. Consider a consumer with CES utility u(x1, x2) = x + x2- (a) Does this consumer have preferences the "increasing difference prop- erty"? How about the strict increasing difference property? Make a...
-
22. How many times will the string "Here" be printed? count1 = 1; while (count1
-
What is direct democracy? What is representative democracy? What was the stated purpose of the Constitutional Convention in 1787? What was the impact of Shay's rebellion on American politics? What...
-
1. Consider the ODE model for Newton's Law of Cooling. We have some object that has a temperature of T degrees F after t minutes of being placed into an ambient environment that has a constant To...
-
In application, sensitivity analysis is a useful and practical way to Group of answer choices determine the feasible region. find an extreme corner point. consider mathematical shortcomings. consider...
-
Deriative this function (gradient descent) J(0) = m!Eg)logho(z))+(1 gi))log(1ho(z)))] to get the result 8; := 0; -, J (0) gii => m m m =1
-
31 1) Evaluate ] [ (y z + y + x k). dA, where S is the boundary of the cube - 12x51 S -14 0 2 2 y ! O2) show that (x.x). nds = 6V volume Contained where Vis by S Consider the two adjacent site of a...
-
Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1. Supplies for...
-
What are the six activities involved in the physical supply/distribution system?
-
Explain the meaning of the following statement: Managing multiculturalism within the international marketing organization and within the markets it serves is what makes international marketing...
-
EFI Logistics, headquartered in San Francisco, is a company providing a wide range of services to exporters and importers. In addition to performing the traditional foreign freight-forwarding and...
-
Better Way (Thailand) Company Limited was founded in 1988 by Thailands king of direct selling, Dr Amornthep Deerojanawong and Boonyakiat Chokwatana. Dr Amornthep had worked as a medical doctor at...
-
Explain how an ABS is structured.
-
Explain how an ABS CDO is structured.
-
Why do you think we would want to draw these two extra lines onto the handwritten account?
Study smarter with the SolutionInn App