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Students are required to purchase this case from Vive Publishing. See “Ordering Instructions for Students” under the Course Syllabus section of DEL. Due date: 4:30 p. M. , October 21st. Vive case: 98138001 Synopsis On January 14, 2012, Amy Bourbon, sole proprietor of Bake Me A Cake (BEAM), set out to make some decisions regarding the company’s future strategy. BEAM had grown and Bourbon was considering a move because she was unsure of how much more Roth the current space could accommodate and wondered whether it was time to take the business to the next level.
Bourbon needed to decide whether to renovate her family home or to lease a commercial location for the business. Also, because Oregon wanted to improve Beam’s profitability, she was considering increasing cupcake prices; and she also wondered how BEAM should best advertise for fiscal 2012. Bourbon decided she would first analyze the company’s three-year financial performance and then project financial performance for fiscal 2012, depending on re decisions.
She hoped to implement all changes before April 2012, when the next busy wedding season would begin. Assignment Vow are a undergraduate accounting student who has offered to help Amy perform the necessary analysis. Use the following as a guide to assist in completing the assignment. 1 . What are Beam’s strengths and weaknesses? 2. Identify threats and opportunities in the industry. 3. Analyze the company’s statement of cash flows for the year ended December 31 , 2011. 4. Analyze the relevant financial ratios for BEAM. Outline the pros and cons of renovating the family home versus leasing a location. Complete a differential analysis for these two alternatives. 6. What are the advantages and disadvantages to increasing cupcake prices? Calculate the direct cost per cupcake. What would the contribution from cupcake sales be for the suggested price points? 7. Create an advertising strategy for the next fiscal year that meets Amoy’s needs. 8. Recommend the changes that Amy should make, based on {Our analyses. 9.
Prepare a projected statement of earnings and balance sheet for the year ended December 31, 2012. This report is to be written as a long business report (see DEL for various documents). It requires a cover page, executive summary, table of contents, introduction, body, conclusion, and appendices. Students will have a maximum often (10) pages, plus an additional five (5) pages of appendices available to present their analysis. The cover page, executive summary, and table of contents do not count toward the overall page count for the report.