Purpose
The purpose of this assignment is to further expose you to financial analysis through which the financial success or failure of a business enterprise can be measured to identify areas requiring changes. This assignment will also enable you to develop critical thinking skills that you will need in examining business financial information and then identify key business issues that need attention. Business changes often require managing the business processes which will improve revenue, reduce cost and satisfy the stakeholders.
You are a consultant to the board of directors at TDL Coffee & Donuts. Your final submission is 4-page report for the Board of directors.
Your report should identify the main financial issues with TDL Coffee & Donuts Ltd. You are also required to make recommendations on what should be done in the longer term in regard to the management of the business and with respect to leverage.
The page count does not include your Cover page, Table of Content, Executive Summary and the Appendices.
Your report should include the following in the appendices, which must be appropriately referenced within the body of the report:
1. Trend analysis of the income statement and balance sheet using 2008 as the base to compare the rest of the years
2. Ratio analysis showing TDL Coffee & Donuts's .The ratios should be for years 2008-2013.
3. Calculate and describe Degree of Financial Leverage, Operational Leverage and Combined Leverage.
4. Operational, Financial and degree of Combined leverage.
5. Calculate the sustainable growth rate and if new funds are required too sustain a 15% increase in sales for 2013.
6. The board would also like to examine using the 2012 actuals with the retirement of 50% of the outstanding equity with long-term debt at 3.5% with a 10% compensating balance. What would be the interest on the commercial mortgage? How would this impact leverage and ratios? Recalculate the Balance Statement and Income Statement given the boards direction and compare to 2012 actuals.
Attachment:- Assignment.rar