Lemonade Stand Economic Report Essay

745 WordsOct 8, 20113 Pages
Economic Report 1 Economic Summary of the Lemonade Stand Toreka Lewis Ashford University BUS 599 Introduction to Quantitative Principles Dr. Harrison Green September 23, 2011 Economic Report 2 This report provides quantative information on the lemonade stand, sourced from financial statements, the business journal, and financial data collected during all three seasons. The following economic summary report will tell how well the lemonade stand’s business is performing by deducting the stand’s capital costs from its profits. Through analysis of the previously stated quantative information, the company will be able to measure how well the stand is using capital to build economic value. The economic summary…show more content…
As a result of higher current ratio, the stand will be able to obtain necessities from short-term creditors such as supplies, easier than before. The ability to obtain supplies and other necessities from short-term creditors will allow the stand to expand and perhaps secure a more profitable Season Four. In addition, the decrease in the debt-equity ratio is another positive sign that shows us that the stand can be successful in the future if managed properly. The owners of the lemonade stand place a value of $50.00 for each season toward being their own and thus have the freedom and flexibility that they would otherwise not experience while working another person or company. This form of revenue can be found in the stand’s implicit revenue on the stand’s balance sheet and is added to the value of learning how to run the business; $25.00 for Season One; as well as gaining more information and/or education on increasing profits and learning how to better manage the stand. During the third season, the stand was more concerned with maximizing returns on resources and therefore leads to a greater economic profit for that season. When the information contained in the business’ financial statements is used to create strategic objectives, such as maximizing returns on resources, the stand will be able to focus on those activities that will produce the desired result and also guide the owners in the management business. By focusing on activities

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