Mid-Term Case Analysis Report
Raymond Liang (020783064)
June 23, 2009
Prepared for: John Miller Shelly Millman
Table of Contents
Executive Summary 3
Context/Background Information 4
Overview of Procedures 4
Profit and Financing Analysis 4 Revenue Analysis 4 Cost Analysis 5 Financing Activities 5 Advertisements 6
Action and Implementation 7
Appendices and Exhibits 9
Summer Dreaming Frozen Treat Company (SDFT Co.) is a company that sells frozen products across the city using pedal-powered carts. The company is planning for another year of operations, and has made a request to prepare a budget for …show more content…
Warehouse cost is a fixed cost, so the cost for April and May are $100 per month. Warehouse cost is on a six-month contract and monthly payments are required to be made at the beginning of each month.
Cart rental cost is based on the number of cyclist we need to hire each month. The cart rental cost for the month of April comes to $9,000 and May comes to $18,000 (see Appendices 4). The cart rental cost is also on a monthly contracted and required to be paid at the beginning of the month.
Total cash payment for costs for the month of April would be $51,870 and repayment of the $10,000 loan. The total cash payment for costs for May would be $169,965, including interest from the loan.
Since we are starting the month with no cash available and we are required to pay warehouse and cart rental costs at the beginning of April, we would need to borrow $10,000. The $10,000 can be easily repaid at the end of the month, and we would still have sufficient cash on available. In addition to the principal repayment, there is a 1% monthly interest that is required to be paid at the beginning of the following month. The interest cost of $100 incurred from April will be paid at the