As you can see from the income statements Sweet Dreams is profitable 2 of the 3 months while Fine Cigars is not for either of the 3 months presented. However Fine Cigars has positive cash flow while Sweet Dreams does not. Both owners of these establishments are friends and you have been asked to explain to them the consequences of their particular business models and how these current circumstances might look 12 months from now.

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Explaining the consequences of their business models and how these circumstances might evolve over the next 12 months requires a deeper analysis of th... View the full answer