Final Project
JerRol
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Group 8 Discussion
Part 6
Purposes of financial documents
· Demonstration to possible investors
Possible investors will use the financial statement and they will be able to understand how a company’s products work and how it addresses problem. So they will be able to see whether the company runs good business or not.
· Provide a measure to actual result
By the end of the financial report, it will help an organization measuring the actual performance of a business
· Risk evaluation
Determination of risk management is the combined effort of identifying, predicting and analyzing potential events that may negatively affect a company’s businesses
Types of Financial Documents:
· Personal financial statement:
This is a document or spreadsheet that outlines a person's financial position at a given period. This statement includes the general information about a person this statement helps individual to follow up and even track their financial goals and wealth this can be when the individuals apply using the credit (Shah et al 2020).
· Sources and Uses of Funds:
This is a statement that is often mentioned to as the current of funds statement, it delivers the machinery for writing of how a business presentation during an accounting retro prejudiced and was influenced by the main funding activities conversely if a business pays more debt than what it derives, they have to use the funds (Shah et al 2020).
· Proforma Cash Flow Statement:
This is a very popular bookkeeping practice that intelligences a voluntary report that is prepared by any commercial for presenting their monetary projections. It can be defined as the credible sum of money that flows in and flows out expected in the future time for a certain time (Shah et al 2020).
Income Statement:
This is one of the corporation’s core monetary statements that demonstrations their loss turnover and even the profit and even the loss statement. Even the income report and other statement of process is a financial report that delivers a rapid of a over a retro of time (Shah et al 2020).
Balance Sheet:
This is a monetary statement that reports a business assets liability and the shareholders equity, the balance sheet is one of the core financial statement used to evaluate a business. It’s a financial statement that provides a snapshot of what a company owns and owes amount invested by the shareholders (Shah et al 2020).
Common size financial statement
Depending on the location, Baskin Robins’ locations make differing amounts. However, the franchises constantly hit their sales goals and are very profitable. Starting a franchise does vary on costs due, to things like the location of the store and the size of it. On average it costs anywhere from $123,952 to $558,830
Three-year Income Projection
In the last three years, the company has seen its profits fall. From 2016-2019 US Baskin Robins went from $47.5 million in 2016 to $47.4 million in 2019. Even International the stores went from $119 million in 2016 to $115 million in 2019. Thus, showing that the company is having some growth issues.
Break-even points
Again, depending on the location, the cost of running a store can differ. The company likes to keep goals relative to competitors in the area of the store and does its best to keep it as low as possible. However, with all costs in mind, the break-even point for a store in 2019 would be 3.076 million dollars
Financial statement analysis
· Liquidity analysis
Liquidity analysis is built to access the ability of the business entity to convert assets to cash. Baskin Robbins’s cash liquidity for franchising a new location is $100,000.
· Profitability analysis
Profitability analysis is designed to estimate the cost and revenue of the firm which determines whether or not the firm is profiting
· Debt measures
Debt measure is designed as a ratio of total debt to total assets
· Investment measure (ROA and ROI)
ROA means return on assets and ROI is return on investment. The investors using these both analysis to keep measuring how the business is going whether its profiting or not.
Shah, N., Shah, A., Saxena, A., Jed, G. O. R. E., Khatri, J., Negi, V., & Gill, R. S. (2020). U.S. Patent Application No. 15/729,645.
Brian Bride Follow. (2015, December 13). FINANCIAL ANALYSIS - dunkin. Retrieved November 07, 2020, from https://www.slideshare.net/BrianBride/financial-analysis-dunkin
Franchise Chatter. (2020, July 06). Baskin-Robbins Franchise Costs Examined on Top Franchise Blog (2020 FDD). Retrieved November 07, 2020, from https://www.franchisechatter.com/2016/06/19/franchise-costs-detailed-estimates-of-baskin-robbins-franchise-costs-2016-fdd/
Team, T. (2019, April 10). How Has Dunkin' Brands Revenue Performed And What Is Its Potential? Retrieved November 07, 2020, from https://www.forbes.com/sites/greatspeculations/2019/04/10/how-has-dunkin-brands-revenue-performed-and-what-is-its-potential/?sh=77830543d4ab
https://www.justbusiness.com/franchising/baskin-robbins-franchise
