Financial Statements

Part I: Analysis (Sections 1 – 3)

·  Sub-divide your analysis into three distinct sections: 1) Revenue, 2) Expenses, and 3) Profitability

·  For each section, review the financial statement below and comment on:

·  Current status, apply vertical analysis to both Actual Results and Budgeted Results.

·  Determine and comment on the variance as it applies to each section. Ask yourself things like:

o  How did management perform against what was budgeted?

o  What are the strengths and weaknesses of this operation per section based on your variance analysis?

·  Create graphs or charts to illustrate and help clarify your synopsis

Part II: Recommendations & Budgeting (Sections 4 and 5)

·  After your financial analysis in sections 1 – 3, add two more sections; 4) Recommendations and 5) Budgeting. 

·  Section 4: Based on your synopsis in sections 1 – 3, what recommendations would you make to upper management that would reduce expenses and increase revenues. For example:

o  Talk about your thoughts on product mix. Where should they focus their marketing dollars next year in order to increase profit margin?

o  How will your recommendation affect food cost?

o  What other recommendations would you make based on this year’s performance?

o  Consider doing some outside research of current fast food chains, compare how they perform versus this operation to support your recommendations 

·  Section 5: Prepare next year’s budget

o  Create next year’s budget based on what it would look like if upper management accepted your recommendations

o  Consider doing some outside research of current fast food chains, compare how they perform versus this operation to support your recommendations