Unit 6 Marketing Discussion

[AB299: Associates Capstone in Management]

Assignment Details and Rubric

Go to Tim’s Coffee Shoppe and look in the back office. Inside the file drawer, labeled “Business” is Tim’s Coffee Shoppe Income Statement for the year for 2011. This is the most recent record Tim has. (I copied and pasted the statement below)

This year, several large businesses are moving in around his coffee shop and he expects business to increase. Tim needs to create a pro forma profit and loss (income) statement for this year, and you need to help him.

In this assignment, discuss whether each area in the pro forma income statement will increase, decrease or stay the same due to large businesses moving into the neighboring buildings into his area and explain your rationale why that line item will increase, decrease or stay the same. Remember, Tim serves coffee to many people who work in the area, so he would certainly expect a major increase in his business volume.

1) This assignment is not looking for dollar figures, but primarily your justification on why the line items will change, and what direction they will change, if any.

2) For the items you feel will change make any assumptions based on the increased sales volume and how it will affect income and expenses. (Describe these changes, and the effects the change will have on the other line items)

You can go on the Internet and search for videos covering financial statements.

These are the line items:

Income earned:

Expenses include:

Salaries

Rent

Depreciation

Supplies

Lease (on your refrigerator)

Tax

Interest (on loans currently held)

Insurance

Checklist:

 If you made assumptions, based on the increased sales volume and how it will affect income and expenses, please describe them and their effects on each line item.

 given what you have assumed and projected, will the total expenses increase or decrease? Why?

 given what you have assumed and projected, will the net profit increase or decrease? Why?

In a minimum of a 1-2 page double-spaced Word document using 12 pt. New Times Roman font, please respond to the line items above and the two questions provided.