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All of the three companies
Astrobucks Coffeehouse, White Mountain Coffee, and KrunchyKrust Donuts are related
to coffee business. Astrobucks Coffeehouse is one of the high-quality coffee
bean brewer and roaster, and customers are offered with delicious coffee
products and beverages. The company started its operations in 1978. White
Mountain Coffee started its business in 1982 as a small coffee café, and its
business grown with the passage of time. KrunchyKrust Donuts was founded in
1955 by Herschel Watrobsky. The company does serve coffee beverages, but they
are specialized in serving pastries and donuts. It is evident that all three
companies are doing business for so many years in their market, and have tasted
success and failures in this journey.
Financial Analysis and Recommendations of Astrobucks
Coffeehouse, White Mountain Coffee, and KrunchyKrust Donuts
Looking at the initial information of three companies, it is evident that all of them are related to coffee business, and have marked their success with a different level. It is important to have a financial analysis for all of them to see that which financial areas are doing well in two years comparison, and which areas need improvements so that considerable recommendations are provided for these three companies. So, here is the recommendation sheet to analyze and discuss financial areas such as Income Sheet, Balance Sheet and Statement of Cash Flows with viable recommendations:
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Make Your Recommendation |
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Which
of the three companies is in the strongest financial shape? Which of the
three businesses is performing the best? How do you know that? Try
to support your answer with specific financial information. |
Looking
at the income statement, it is revealed that net income for Astrobucks was $212,686
in year 1, whereas $268,346 for year 2. The net income for White Mountain was
$ 5,970 for year 1 and $ 6,266 for year 2. On the other hand, net income for
KrunchyKrust was $ 26,378 for year 1, and $ 33,478 for year 2. According
to balance sheet, the total assets of KrunchyKrust in year 2 were $ 410,487,
whereas total liabilities were 137,135. The total assets of White Mountain in
the year 2 were $ 59,990, and total liabilities were 24,842. The total assets
for Astrobucks in year 2 were $ 2,729,746, and its total liabilities were 647,319.
According
to Cash Flow Statements for all three companies, it was revealed that as per
Cash Flows, the net income for Astrobucks in tear was $ 268,346, and this
amount for KrunchyKrust’s net income was $ 33,478. On the other hand, net
income as per cash flows for White Mountain was $ 6,266. Looking
at all of the financial stattistics for these three companies, it is quite
evident that Astrobucks is way ahead from other two companies in terms of its
financial performance. The company’s net sales as well as net income was way
ahead from other two competitors. There is a vast different between these
three companies in this regard, for instance net income for Astrobucks was $
268,346, and net income for White mountain was $ 6,266, and net income for
KrunchyKrust was $ 33,478. It is clear that Astrobucks is earning net income
in six figures, whereas KrunchyKrust earning in five figures and net income
for White Mountain is just in four figures. It is also clear that White
Mountain is the lowest financial performer as compared to other two companies.
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What
can you infer about these companies from looking at their financial
statements? Try to show that you can analyze the financial statements. |
Looking at the numbers for all three companies, it was shown
that net sales for Asrobucks in year 2 were $ 4,075,522, whereas net sales
for year 2 for KrunchyKrust were $ 491,549, and net sales for White Mountain
were $ 116,727. It means that other two companies in comparison with
Astrobucks are low in their net sales, which means that they need to increase
their sales so that they can earn more revenues and profits, which ultimately
will have a positive impact on their net income. It is recommended to White
Mountain that they should expand their business to other locations and look
for new business opportunities so that they can increase their financial
performance, which is way lower than the other two. It is also recommeneded
to KrunchyKrust that they should see which business areas or locations are
not earning enough revenues and profits for them, then they should revise
their business startgy by increasing sales on those outlest, or close them if
they are not enough profitable for them. Astrobucks is recommended to
continue their business the way they have been doing. |
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