The Lodge Bistro After reading your summary about The Lodge Bistro Chain‚ I would like to outline the problems and possible causes and try to show you a learning skill that you could implement to help solve these issues. The best way to do this is by using SWOT Analysis which will help to determine the Strengths‚ Weaknesses‚ Opportunities and Threats within the company. The graph below will help you to identify the areas and where they happen. (wikipedia.org) There are many problem areas or
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Chapter 13 Risk Analysis and Project Evaluation 13-1. Crusik Distribution Company thinks that there are two possible outcomes for its new facial care product: Either it will be very successful‚ or customers will not appreciate its “unique appeal.” The two outcomes are equally likely‚ but the successful outcome obviously comes with higher revenues. We can picture the situation like this: 50% 40% 30% 20% 10% 0% $1‚000‚000 $5‚000‚000 Thus Crusik’s revenues will be either $1M or $5M. The expected
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Chapter 4 Financial Analysis: Sizing Up Firm Performance 4-1. To create a common size income statement for Carver Enterprises‚ we need to express the given dollar amounts as proportions of sales. Transforming the dollar amounts into proportions allows us to compare Carver’s situation with other firms‚ even if those other firms have drastically higher or lower sales than Carver’s. Expressing each dollar amount as a percentage of Carver’s $30‚000 in sales‚ we find: Income Statement Revenues Cost
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Chapter 18 Working Capital Management 18-1. As was done in Checkpoint 18.1 in the text‚ we can evaluate Deere & Co.’s liquidity using net working capital and the current ratio. Net working capital is simply the difference between current assets and current liabilities‚ while the current ratio can be found as (using 2008 as an example): current assets current ratio = current liabilities $9‚197‚400 = = 0.61. $15‚083‚300 Since Deere’s current ratio is less than 1‚ its current
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Chapter 12 Analyzing Project Cash Flows 12-1. Captain’s Cereal’s new Crunch Stuff n’ Stars is expected to generate $25M in sales. However‚ 20% of that will be cannibalized from the original cereal‚ Crunch Stuff. Thus‚ the sales amount that should be allocated to the new Stars version is only (100% − 20%) of the $25M‚ or $20M. This is an example of finding an “incremental” cash flow. As shown in equation 12-1‚ we only want to consider what is different if we go ahead with the project: incremental
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Chapter 17 Financial Forecasting and Planning 17-1. We are to estimate the total financing needed (total assets) and net funding requirements (discretionary financing needed) for the next year (2011) for Zapatera Enterprises. We’ll start with total assets. We’re told that the firm’s 2011 sales will be $15M‚ and that the proportion of sales represented by operating expenses‚ current assets‚ net fixed assets‚ and current liabilities will be the same as for 2010. Thus‚ we can create Zapatera’s pro
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Chapter 14 The Cost of Capital 14-1. Templeton’s investment of $400M will be financed with $300M in debt and $100M in equity. Thus after the purchase‚ Templeton’s balance sheet (market value and book value‚ at t = 0) will look like this: ASSETS $400‚000‚000 DEBT $300‚000‚000 $400‚000‚000 EQUITY $100‚000‚000 $400‚000‚000 ) = 75% in debt financing‚ and ( $100‚000‚000 ) = 25% in equity Thus Templeton is using ( $300‚000‚000 $400‚000‚000 $400‚000‚000 financing. Its debt and equity weights are therefore
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Chapter 15 Capital Structure Policy 15-1. A. We can calculate Webb’s debt ratio using equation 15-1: total liabilities debt ratio = . total assets Webb’s total debt includes both its current liabilities of $750‚000 and its long-term debt of $750‚000. Webb’s total debt is therefore $1‚500‚000. Its total assets‚ which equal the total of its debt and owners’ equity‚ equal $2‚000‚000. The firm’s debt ratio is therefore: $1‚500‚000 debt ratio = = 75%. $2‚000‚000 Using its book
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Chapter 19 International Business Finance 19-1. To find the number of dollars that the business needs to pay‚ we simply need to multiply the foreign currency amounts by the direct quotes. That is: $ number of dollars required = (number of foreign currency units required) ∗ . forex Given the direct quotes given‚ we find: A part (a) (b) (c) B # of forex units required 10‚000 2‚000‚000 50‚000 forex CD yen francs C = A*B ($/FC) # of direct dollars quote required 0.8437 $8‚437.00 0
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Chapter 8 Risk and Return: Capital Market Theory 8-1. To find the expected return from James Fromholtz’s investment opportunity‚ we will use equation 7-3: where i indexes the various states of nature that are possible. We can picture the states of nature for James’s opportunity as: Despite the symmetrical appearance of the graph‚ the outcomes are not symmetrical: There are many more outcomes that are positive than negative. Only the 100% return (probability 5%) is negative; 95% of the weight
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