Week 9 EOC: Chapter 9 Apply What You've Learned (342-343)

“I think I can buy it at a great price,” said Dan Flood. He was talking about the Watershed Restaurant. The property was for sale and Dan was meeting with Loralei Glenn, his friend and an experienced restaurant manager. “It’s losing about 7 cents on each dollar sale now,” continued Dan, “but I know we can turn that around.” 

Loralei considered Dan’s proposal that they form a partnership, acquire the restaurant, and share in the profits they planned to make. She knew that, before it was possible to share profits, they would actually have to make a profit. That meant, to go from losing 7 cents per dollar to making money, they would have to increase sales, reduce costs, or both. She mentioned that to Dan. 

“Well,” he replied, “I’m not sure we need to increase the sales at all. If we buy at the right price, I think we just need to reduce our costs. You can do that!” 

Assume that the restaurant’s sales volume last year was approximately $1,400,000, and thus its loss for the year was about $98,000. 

1. If Dan and Loralei decide to buy the restaurant, some fixed costs would be incurred. List at least five important fixed costs that would be directly affected by the purchase decisions Dan would make regarding the acquisition of the property. 

A. If Dan and Loralei decide to buy the restaurant, there will be some fixed costs "A fixed cost is one that remains constant despite increases or decreases in sales volume (number of guests served or number of rooms sold)."(Dopson 317). There are five costs which I believe will be directly affected by their purchase, which will affecting whether or not they purchase the property. These fixed costs are as follows, music and entertainment, administrative and general, occupancy, depreciation, and interest.

2. If Dan and Loralei operate the restaurant, some variable costs would be incurred. List at least five important variable costs that would be directly affected by the operating decisions Loralei will make as she manages the restaurant. 

A. If Dan and Loralei operate the restaurant, there will be some variable costs "A variable cost is one that increases as sales volume increases and decreases as sales volume decreases."(Dopson 318). There are five costs which I believe will be directly affected by their decisions if they choice to purchases the restaurant. These variable costs are as follows, food cost, beverage cost, labor cost, consumables (i.e. napkins, etc.) and guest type.

3. Consider the decisions Dan and Loralei will make if they choose to acquire the restaurant. While clearly both are important, whose decisions do you think are the most important to ensuring the future profitability of the Watershed? Why do you think so?

A. Considering the decisions Dan and Loralei will need to make if they choose to acquire the restaurant, it is important to determine the menu pricing. "Perhaps no area of hospitality management is less well understood than the area of pricing food and beverage products"(Dopson 240). For these reasons I believe that they should follow Loralei's needs over Dan's when making the final decisions based on the fact the restaurant is currently losing money stating that the cost need to be based on sales more than just fixed costs.

Work Cited: 

Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.

Week 8 EOC: Chapter 8, Question 4

a. What were the total revenues in October 2009 and October 2010?

b. What was the GOP in dollars in October 2009 and October 2010?

c. What was the percentage of GOP to total revenues in October 2009 and October 2010?

d. What was the flow-through percentage achieved by Santi’s hotel? What is your assessment of that percentage?

Answers: 

a.    The total revenues for both October 2009 and 2010 can be found in the top section of the income statement. "The income statement reports in detail and for a very specific time period, a business’s revenue from all its revenue-producing sources, the expenses required to generate those revenues, and the resulting profits or losses"(Dopson 32). The total revenue for October 2009 was $545,000 and where the total revenue for October 2010 was 583,000.

b.  The gross operating profit can be found in the second section of the income statement."Gross operating profit (GOP) is, in effect, total hotel revenue less those expenses that are considered directly controllable by management."(Dopson 296).The gross operating profit in dollars for October 2009 was $162,000 and the total for October 2010 was $184,550.

c. The percentage of the gross operating profits to total revenues can be found in the second section of the income statement. The percentage of the gross operating profits to the total revenues for October 2009 was 29.71% and where the percentage of gross operating profits to total revenues for October 2010 was 32%.

d.  The flow-through percentage can be found at the very end of the income statement. "Flow-through is a measure of the ability of a hotel to convert increased revenue dollars to increased gross operating profit dollars"(Dopson 296).The flow-through percentage achieved by Santi’s hotel was 59.34%. My assessment of this percentage is good, it shows the manger has done things very efficiently.

Work Cited: 

Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.

Week 7 EOC: Trump and Small Business

While there are those that have already reacted to the news of Trump being elected, and the stock market has fluctuated. I think it is almost pointless to actually make a call on how this going to go with Trump in office. Most of the articles and opinions of this is all follow one of the main sentiments of the public, no one thought he was going to win. So once they get over that little hiccup in all their plans, I think we will get a better picture of what we will be dealing with. Though initially you have reports like "Under a President Donald Trump, markets expect higher volatility and higher prices for safe haven assets such as Treasuries, precious metals and the Japanese yen. How has Trump Getting Elected effected the Business Market"(pbs.org). 

Though watching the market bounce right back to normal, after the initial shock is the strongest indication of what is going to happen. "Well, that was quick. Wall Street's midnight anziety about Donald Trump's victory appears to have been for nothing. The market snapped back quickly Wednesday  morning, just hours after all the major indices tumbled badly overnight."(money.usnews.com). With all the coverage and grandizing what has been going on, I don't think anyone has really taken a moment to realize the world will keep turning. The fact of the matter is we have a president coming into office agian, that around half the country doesn't want. 

The protest have been growing and desolving as they do, and there are extremest on both side. But for me it will be ok because people know there is a shark in the water and they are watching it. The thing that I believe would upset the market more would be if the "Dump Trump" campaign actually achieved what they are trying to do. "But others are taking things a step further, signing an online petition and writing letters to members of the Electoral College, asking them not to vote the way their states did at the polls" (cnn.com). While I don't think it will happen, to see how the system would react to such an event. I would rather see him in office, and that's saying a lot.


http://www.pbs.org/newshour/making-sense/column-stock-market-doesnt-like-idea-trump-presidency/

http://money.usnews.com/investing/slideshows/8-ways-president-donald-trump-will-affect-wall-street

Week 6 EOC: Weed in the Work Place

As a personal opinion I believe that weed in the work place is actually a bad idea. While I whole heartedly believe that there are those who work better or can handle themselves in a professional manor. The fact of the matter is I have had to many experiences with people who don't know the boundaries of work place and getting to high.“Overall, however, there exists little evidence that cannabis use is associated with lower productivity and/or elevated health costs among full-time employees.” (NORML.org). Though this evidence counters my point, I think it speaks to the main reason I am against it, it is not the substance that I have an issue with rather the user.

That being said I think in certain industries it is acceptable and ultimately rest on the owners to decide what should be done. Though one of the biggest things to make that desicion beside industry specific oversight organizations will be insurance companies. The risk of having someone liable for the company under the influence will give any company pause, but I think the turn in the legal industry might see that curve a bit. "Options are increasing though Weiss said. “We’re seeing more of the big name players enter the market now that they’ve seen others dip their toe in successfully,” he said." (Forbes.com). I believe once these companies start having serious investments inside this industry, it will be the final tipping point for over all reform.

Whether this reform will justify allowing people to use weed in the work place only time will tell. With testing at the place it is today and the laws being so open, I don't believe there will be a definitive route for dealing with this issue. "Companies are trying to decide between two extremes: policies on positive test results to keep users out of their workforces, or loosening them to avoid driving away qualified employees."(theguardian.com).  I don't believe there is an easy answer, and I think any one should be warry of suporting either side to the extreme. That being said my generation hasn't put there foot down for too many things, but this seems to be one that we aren't giving up on.  

"NORML.org - Working to Reform Marijuana Laws." NORML's Model Workplace Policy for Cannabis -. N.p., n.d. Web. 07 Nov. 2016.
http://www.forbes.com/sites/julieweed/2015/07/05/insurance-companies-start-noticing-the-legal-cannabis-industry/#530cc87c5810
https://www.theguardian.com/sustainable-business/2015/apr/19/marijuana-workplace-drug-testing-employers-employees-medical-recreational

Week 4 EOC: Chapter 5 Question 2

a. Did the change in Cash reflect a Source or a Use of funds? What was the amount of that change?
b. Did the change in Net Receivables reflect a Source or a Use of funds? What was the amount of that change?

c. Did the change in Notes Payable reflect a Source or a Use of funds? What was the amount of that change?

d. Did the change in Retained Earnings reflect a Source or a Use of funds? What was the amount of that change?

e. What was the total amount of Sources and Uses of Funds?

Answers:

a.  The change in Cash reflected a use of funds. The amount of change was $14,000 from cash. This is designated as a use because it is an outflow of cash "Sources represent inflows and uses represent outflows of funds for the hospitality business." (Dopson 147). 

b. The change in net receivables reflected a use of the funds. The total amount changed was $40,000 from net receivables.

c.  The Change in Notes Payable reflected a use of funds. The total amount changed was $44,000 in notes payable.

d.  The change in retained earnings reflected a source of funds. The total amount changed was $104,000 in retained earnings. The distinction of whether it was a use or source comes down to "Retained earnings represent the accumulated account of profits over the life of the business that have not been distributed as dividends. If your retained earnings increases, that means you have increased your net income for the year, thus providing a source of funds." (Dopson 152). 

e.  The total amount of sources and uses balanced out, with each having $743,000 in their respective categories. "If a business is not considered by lenders and investors to be a going concern, that business will likely find that its ability to borrow money is severely diminished."(Dopson 147).

Work Cited: 

Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.

Week 4 EOC: Chapter 4 Question 3

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

Answers:

a. Rachel's cash percentage is higher than the chain's average percent for cash which is 6.7% where Rachel's is at 18.9%. I believe this means that as an owner of a franchise within the chain Rachel's priorities has made her operate her business at a higher standard to ensure her own success. This can be show by her equity "The balance sheet is designed to show the amount of a business owner’s free and clear ownership"(Dopson 115). 

b. Rachel's inventories percentage is higher than the chain average percentage which is 1.3%, where Rachel's is at 11.4%. Though it is wise, I think that having such a high percent in inventory can become a threat, though at the current state it still seems to be managed. As a surplus can be useful especially if they are going into their slow periods "It is clear, however, those who operate a business must consistently have sufficient cash on hand to pay their employees, their vendors, and the taxes owed by the business" (Dopson 117). 

c. Rachel's accounts payable percentage is higher than the chain average percentage which is 10.5% where Rachel's is at 11.3%. This one of the areas where being well over is understood based on the business the company seems to be doing more than the average. The fact it is only slightly over the chain average while the other are more of a positive to be higher. This puts this store in good position with their vendors "it would not be unreasonable for these vendors to ask to see their customers’ respective balance sheets before a decision was made regarding the wisdom of extending credit to them."(Dopson 117). 

d. Rachel's notes payable percentage is higher than the chain average percentage which is 1.1% where Rachel's is at 2.5%. This is just the trend of the overall balance sheet as it matches the trend shown with account payables with only being slightly higher and being accountable to the fact the over all company seems to be doing more business over the chain average.

Work Cited: 

Dopson, Lea R. Managerial Accounting for the Hospitality Industry. Wiley, 09/2008. VitalSource Bookshelf Online.

Week 3 EOC: Best Restaurant Experience

The best restaurant experience that I have ever had is from a restaurant in Chicago, IL called Heaven on Seven. "Jimmy's goal was then and is now for "Heaven on Seven" to be the best Louisiana style restaurant outside of New Orleans."(http://www.heavenonseven.com). I believe he has achieved that goal, but I couldn't say for sure as I have never actually been to New Orleans. But the three times that I have been able to go here, I have been extremely impressed with the food. 

There isn't one specific time that stands above the rest, as each had their own merits to why I liked them. The first time I went there it was the first time I had something other than ramen"The most problematic nutrient is sodium. This noodle product has 1170mg of sodium, over 50% of the recommended daily allowance. Yikes." (fooducate.com) or Mcdonalds in almost nine months and the food lived up to the restaurants name. The second time was for my graduation dinner and was shared with my family, a friend of mine and his family. The atmosphere that the restaurant had with all the different decorations and hot sauce bottles helped to smooth over what had the potential to be a very awkward dinner. 

Sadly though the third experience was when I was moving to South Carolina and I wanted to meet up with some friends on the way through Chicago. I found out they had closed the location I had enjoyed going to, but they still had two others. The second location didn't have the same open feeling but still had all the charm. "The right color goes a long way toward setting the desired mood, whether it's bright white walls and green accents that represent nature for a vegetarian restaurant or rich wood tones and warm paint colors for a British-style pub."(chefs.edu). The shift in location though had no effect on the other factors of the restaurant, the food and staff were amazing. So though it wasn't just one time each was amazing in their own right.   

Work Cited: 
http://www.heavenonseven.com/
http://www.fooducate.com/app#!page=post&id=57A352B3-20A1-076D-4F78-85661772C8BA
http://www.chefs.edu/culinary-central/14/10/five-tips-for-creating-a-great-atmosphere-in-a-restaurant