Topic

Billy’s Café and Fiona’s Fashion Financial Analysis

Requirements

Answer the following questions separately for each of the two businesses

Using the Profit & Loss statements provided, any key ratios you feel would help [2 decimal places] and through the completion of cash flow statements you should analyze and report on the performance of each business in 2016. What issues are they facing and what could they do about them?
Using the information provided calculate the January 2017 budgeted sales & profit for each promotion showing all your workings in P&L format.
Having done that Billy and Fiona have decided to ask your opinion of their January promotion plans. You need to identify what you see as the positive aspects of each promotion as well as any weaknesses.
Finally, you need to suggest any improvements you can think of that would help their businesses prosper through their proposed January promotion and on into 2017 making use of all the information you now have and taking into account everything you have studied this year.

Answer Preview

The owners of Billy’s Café and Fiona’s Fashion, which are located in Utopia Retail Park are hopeful that business will improve in January 2017 after experiencing dwindling sales from the beginning of 2016 and amidst growing competition in the shopping complex. A comprehensive analysis of the financial statements has indicated that both companies have issues with generating sufficient cash flow from sales. The business owners have devised promotional activities that they will test in January and fully adopt depending on their impact, Billy anticipates that a Loyalty Cards program will increase sales but lower average spend. Conversely, Fiona has developed a catwalk fashion show that is expected to increase average spend and raise sales.

Word Count: 3000 words