8-10. Given the following data, on a separate sheet of paper create monthly and yearly income statements for this fast-food restaurant in New York City.
a. Sales for the month of June were $300,000. Sales for the year were
$2,600,000.
b. The sum of $66,000 was spent on food in June ($792,000 for the year). The store spent $9,000 on paper to wrap food items in June and $108,000 for the year.
c. Taxes for June were $15,000. For the year, they were $233,000.
d. Fixed operating costs for June were $175,000. Operating costs for the year,
they were $1,000,000.
e. Use Excel or other software to createa graph showing the monthly and yearly income statements for this business.
8-11. If the owner of this fast-food restaurant invested $300,000 in start-up costs, what was his ROI for the year? (Assume June as average.)
8-12. Calculate the financial ratios (ROI and ROS) for both the monthly and the yearly income statement. What do the financial ratios tell you about this business?
8-13. What would the profit before taxes be if the owner finds a paper supplier that only charges $100,000 for the year?
8-14. What would the profit margin for the year be in that case?
8-15. Suppose the owner wanted to raise profits by $5,000 a month. What would you recommend he do, and why?
8-16. State the financial equation for the balance sheet in three different ways.
8-17. How is depreciation treated on the balance sheet and what is the logic behind the treatment?
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