Be Our Guest

Be Our Guest Inc., a Boston based company, is a rapidly growing equipment rental company with substantial seasonality in its revenues and profits. In the spring of 1998, the senior management team is reviewing its financial plans in preparation for a meeting with the company's bank. The case provides an opportunity to forecast financial needs and consider the appropriate structure and amount of bank borrowing. � For years the company has been renting party supplies and furniture to caterers, event planners and hotels, it has also managed to grow gradually in a very volatile and seasonal business. The founder, Stephen Lizio and co-owners Al Lovata and Simone Williamson found it difficult to fund daily operations

The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.

Abstract : Analysis of financial statement of a company is an important because it is useful to obtain Information

Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.

The Gross Margin ratio represents the percent of total sales revenue that TCI retains after incurring the direct costs associated with producing the goods and services sold by them. It helps us distinguish, as much as possible, between fixed and variable costs. With a 20%, 15%, or 10% projected increase in sales, for 1996, we calculated TCI’s GM ratio to be 41.85% , and in 1997 to be 41.84%. This means that around 42% of TCI’s sales dollar is available to pay for fixed costs, like its potential long-term debt to MidBank, and to add to profits.

Be Our Guest is a growing firm specializing in providing high-end equipment and services to catering firms. The company is considering its financial needs and appropriate capital structure to ensure available funding for growth and flexibility as well as to meet the day-to-day needs of its highly seasonal business. This paper attempts to analyze the key success factors of the firm and assess the appropriate funding levels from both the company?s perspective as well as that of the bank.

As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.

The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s

Financial statements for banks have uniquely different analytical problem than statements for manufacturing, service and most companies in general. Therefore this analysis of JPMorgan and Chase 's financial statements requires a different approach in order to recognize the banks worth as an investment.

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor

This indicates that SDB’s ability of making profits is stronger than the average level. Meanwhile, SDB’s non-interest income level and operating expense were above the average level in 2002. Nevertheless, SDB’s ROAA was 0.9% in 2000 and was only 0.3% in 2002. This ratio was merely half of the average ROAA of other five joint-stock banks in 2002 indicating that SDB’s profitability of the assets was relatively weak as well as its ROAE at the same time. SDB’s ROAE was only one-third of the average ROAE of five joint-stock banks. Therefore, SDB’s performance was not good compared with its industry peers; the reason of SDB’s bad performance is that an increasing assets generating low net income.

year 20X2 which was 1.78 to 0.90 in the year 20X3. On the other hand,

A firm’s net profit margin assesses the efficiency of the firm’s operating management. The improvement of the net profit margin shows a better operating management; lower operating costs but this effect is partly offset by higher tax expenses. For Phelps Dodge, we see that the NOPAT margin increases over the presented years. The increase of the NOPAT margin is an effect of the increase of the net profit. We

VKM`s Profit Margin is increasing. A high or increasing profit margin can indicate that the company is in a position to price its products at premium. This can be seen in connection with entrenched business models, such as those selling a proprietary good or service, or by exploiting a monopoly position. On the other hand it maybe possible that Management is efficient in reducing costs and expenses resulting in an increased margin. While profit margin is directly related to pricing and cost, an increasing margin does not necessarily translate into increasing

In order to understand how Tesu meets cash requirements quickly, it is necessary to review the current ratio and quick ratio. The higher liquidity is generally better as it demonstrates that the company can repay its lenders. As seen in Exhibit 2, the current ratio is positive. However, it is decreasing from 2011 to 2012. Although the quick ratio increased slightly between the two years, it is still not at an acceptable level. The company’s liabilities are greater than their current assets due to the high costs of accounts payable, which has resulted in the low ratio numbers. Currently, Tesu has a significant sum of money owed in terms of unpaid wages and payroll taxes to the government. In order to increase liquidity, the company must increase its current assets. Generally acceptable levels for liquidity are 2.0+ for current ratio, and 1.0+ for quick ratio. As Tesu continues to grow in 2013, their current liabilities will begin to go down as they collect outstanding