Chosen Bun Bakery Case Study

THE CHOSEN BUN

Chosen Bun bakery financial statements helps us analyze and determine a company’s current situation thus enabling decision makers make prudent choices on the direction a company is to take. Chosen Bun financial statements given include statement of cashflows, balance sheet and income statement.

A) Statement of cashflows: Shows how much cash comes in and out of the business,as it reports the cash generated and used during the time interval.specified in its heading.

Cash from operating activities is compared to the company’s net income i.e. if it is consistently greater than the net income, then the company’s net income are said to be of high quality, whereas if it is lower than net income concerns are raised as to why the reported

4.How to create a target profit

Chosen Bun could create a target profit by first prioritising on market segmentation by aggregating prospective buyers into groups or segments that have common needs thus respond similarly to a marketing action. A target profit is simply the net operating income a management desires to achieve a specific amount of profit at the end of a business period. Market segmentation would help the company segment its customers based on the geographical region by area, demographically by age, gender, family size, income and life cycle.

One can use the cost volume profit equations and formulas to determine the sales volume needed to achieve a target profit. The main objective is to minimize risk to Chosen Bun bakery by detailing which products have the best chances for gaining a share of desired target market. Consequently, this enables the company increase its overall efficiency by focusing its limited resources on efforts the produce the best return on investment.

Sales price per unit= Variable expenses(cost per unit) + Total Fixed expenses + Target Profit = Sales price per unit - Variable expenses(cost per unit) - Total Fixed