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10 pages/β‰ˆ2750 words
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4 Sources
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APA
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Business & Marketing
Type:
Essay
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English (U.S.)
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La Paloma Restaurant and Bar Financial Analysis Research

Essay Instructions:

I want the same la paloma restaurant financial analysis you have on your site done for me but using the balance sheet I sent in and it should be compressed in ten pages. I am uploading the La Paloma paper on the website, as well as the balance sheet.
Hint
As you analyze the financials of La Paloma, don't under estimate the impact of the renovation and expansion of the facility. The financial statements reflect reality in operations. A major renovation or expansion will disrupt business. People don't want to eat surrounded by construction. In fact, it is not unusual for a business to actually close for a few weeks or months if the renovation is very disruptive. For example, a local restaurant repaved their parking lot a week ago. It took several days and parking was limited. They lost business because people couldn't park. This will be reflected in the financial statements.
A large portion of the expansion was financed with cash. This is not a problem. In fact, saving cash for investment in the business is a good idea. Having large cash balances in a business account is often unproductive unless needed to cover cash flow issue. The return on the cash investment in the business will be much greater than interest earned in a bank account. Don't just look a numbers or trends, but analyze what is happening in the business (i.e., the reality of the situation). Sometimes what looks like a problem really isn't.
When a business invests in assets for an expansion, it often takes time to fully utilize the new assets. You can't expand incrementally and short-term excess capacity is the norm. Therefore, the time it takes to expand the customer base to fully utilize new investments could make the financials look worse for a short time. If all goes as planned, however, the expansion should pay off in the future with increased business and profit.Remember, to address the issue of opening a new location as suggested in the business profile. Often this is the only way to really scale-up this type of business.
Remember, this is a restaurant. Use your common sense to analyze the numbers. What would be typical expectations for a restaurant? How does it work? How would the type of business impact the numbers? Just use your common sense to help.

Essay Sample Content Preview:

La Paloma Restaurant and Bar Financial Analysis
Name:
Institution:
Date of submission
La Paloma Restaurant and Bar Financial Analysis
* Executive Summary
The La Paloma Restaurant and Bar Ltd is a fully operational food and drinks service establishment that was established by John and Skyler Surmosa as a Subchapter S Corporation in 2005. The restaurant is well known for a variety of cuisines such as the Mexican dishes, signature Italian cuisines, seafood, steaks and a full bar. The evening sessions comprise entrées that goes between $ 15 and $ 35. The operational periods include both the day and night shifts for seven days with opening time at 11:00 a.m. and closing time of 10:00 p.m. in the year 2014, the enterprise had 40 employees that were operating in both shifts. However, the number increased to 46 after its expansion. These employees received their payments at the competitive rate with the market-levels based on their training and experience. Also, the enterprise has three trained chefs. The premise has three managers of whom on operate at the lunch shift and the other tow at the busier evening shift with one manager acting as the general manager. However, both John and Skyler may work as managers during the busy periods.
John and Skyler used both a down payment mortgage from the local bank and SBA 7 (a) loan for the purchase of the building and equipment as well as a start-up for the enterprise respectively. As at the year 2010, the enterprise had a $ 450,000 renovation as well as an expansion that the owners managed through a bank loan of $ 300,000 and $ 150,000 in cash. However, the ultimate goal of the owners is to expand the enterprise through the opening at another business in another city. Therefore, the financial analysis of La Paloma Restaurant and bar will cover the year 2012 through 2016.
* Financial Health Assessment
La Paloma Restaurant and Bar has been performing well financially and net profit from the year 2012 except for the year 2015 where it registered a net gain of $ 6,947. Besides, there has been an increase in the Return on Owners Equity coupled with the Return on Assets above the industry standards. Similarly, the enterprise has been noting an increase in both contributed assets and efficiencies due to rising Net Sales compared to the Fixed Assets and the Owners Equity. These improvements are in the collections on credit sales indicated by the increasing trends in the receivables turnover. Regarding the control of the operating expenditure, the restaurant is performing at a fair level in all its departments except the advertisement and utilities. The liquidity is high compared to the industry standard with its interest expenses that are proportional to the sales amidst high debt assumption.
Irrespective of the good indicators of its performance, La Paloma Restaurant and Bar has indicated an increasing trend in the Inventory and Receivables which is high above the industry standards. The company's receivable collections are below the 30-day policy hence the receivables turnover becomes lower than the industry standard. This little trend is also exhibited on the Inventory Turnover with an increasing trend in the inventory levels compared to the sales proportion. There is ...
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