Nancy’s coffee is just one of the business ventures that are facing the dilemma of being in the entrepreneurial industry for quite some time and yet searching for broader horizon and higher aims in the commerce path, particularly in the pecuniary benefit aspect. The financial statements are used in examining trends in key financial data, comparing financial data across companies, and analyzing financial ratios to assess the financial health and future prospects of the company. The ratios provide indicators of how well the company and its operations are performing.
The current ratio for 2001, 2002 and 2003 are at 12.84%, 19.94% and 15.77%, respectively. It is a liquidity ratio that ...view middle of the document...
In such a way goals and objectives will be achieved and a smooth success will go through it. Taking into account the Cash Flow Statement of the Nancy’s Coffee, there is a substantial increase of disposal on Property, Plant and Equipment due to the closing of the two stores. For the three consecutive years, it comes to our notice that there is a large amount of money lend for purchasing PPE’s, this strategy of the business is good because of the growing demand of the people of the product, you must initiate machineries that would able to produce large quantities, and as well as maintained its quality to the people. It is also observed that Principal payment of long-term borrowings decreases over the years, this is a good indication that the business are in its full capacity to pay its long-term debt over its creditors, it may lead to open new investor that may somehow be added to the capital of the company. Proceeds from long-term debt are also constantly increasing which do have a quite difference over its long-term payments. Principal payments under capital lease obligations reported an increase over the years, this is due to more and more stores are being established and built. It can be noted also, that financing activities in year 2003 have the largest cash outflow, and both investing in years 2002 and 2001. The cash decreases in years; this is a clear sign that the company is engaged more on investing and financing their resources in order to accumulate more investments that would be good sources of income/capital for the company that would attract more investors.
1) What should Beth’s strategy be for growing her company? What are her options?
Beth Wood has been figuring out growth strategies for her company. Growth here refers to attracting more capital, enhancing the value of the store, generate more income and reducing the overheads, and aiming stability despite competition. Nancy’s coffee is centered in shopping malls which has narrower customer groups and costs a lot of money specifically the high lease rates. Beth has to consider cutting back few of its stores located in malls and opening up chains along the streets but has to study first the target market and the likelihood of success, or consider franchising. Throughout the state, coffeehouses proliferated and competition is evident with Starbucks as the leading competitor, Beth has to aim stability and outwit other competitors. It was also pointed out that employee challenges were inherent in a retail business and thus have to be addressed immediately to forestall adverse effects on their job execution and in the business eventually.
2) What rate of growth should Beth strive for and why?
The Nancy’s coffee has to reach a size worthy of harvest and need to add...