The purpose of this paper is to apply and illustrate what you have learned this semester, by submitting a full financial synopsis based on a hypothetical fast food restaurant. Below is a mock financial report indicating actual sales and expenses versus budgeted sales and expenses for a one year period of time. Review the report and write a 5 to 7 page financial review of this business incorporating the following areas:
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:
- How did management perform against what was budgeted?
- 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:
- Talk about your thoughts on product mix. Where should they focus their marketing dollars next year in order to increase profit margin?
- How will your recommendation affect food cost?
- What other recommendations would you make based on this year’s performance?
- 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
- Create next year’s budget based on what it would look like if upper management accepted your recommendations
- Consider doing some outside research of current fast food chains, compare how they perform versus this operation to support your recommendations
Paper:
- APA format – no abstract is required
- Must have a title page that includes date and your name
- Must have a Reference page at the end citing any outside resources for your analysis, have at minimum two sources
Submission Instructions: Submit as an attachment, including your name as part of the file name.
Review the assignment grading rubric.