Tim’s Coffee Shoppe set up outside looks very appealing for customers to go inside and have a cup of coffee. When looking at the inside the atmosphere looks appealing for customers. The business is also open every day from 6am to 2am with a bus stop close to the business so it is easier to get too when not having a vehicle. Notice that the restaurant is located next to the college. With having a coffee shop next to a college this will mostly attract more college students and also with having live entertainment this should get more customers to come in. With the live entertainment I noticed that there is no time schedule to when the live entertainment is going to be at the restaurant it just states that the live …show more content…
Finance and Accounting
The current ratio is current assets/current liabilities. So by looking at their balance sheet and income statement the current ratio is as follows: $26,071.39(total current assets)/4,746.92(total current liabilities) = 5.5.
An acceptable current ratio varies by industry. For most industrial companies, 1.5 is an acceptable current ratio. As the number approaches or falls below 1 (which means the company has a negative working capital), you will need to take a close look at the business and make sure there are no liquidity issues.
A relatively high current ratio, say 5:0 or above, is not necessarily a positive. It may indicate that the company's assets are not being used to their best advantage - management may be hoarding them instead of plowing them back into the business to help it grow, Or the firm may have too much inventory on hand, or possibly management is not investing the company's extra cash.
Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity found on the balance sheet. The return of equity = net income/shareholder equity. So by looking at the balance sheet and income statement the return of equity is as follows: 74,511(net income)/28,609.89(shareholders equity) = 2.6.