Week 6 Frank Hot Dog Cart Financial Statements Discussion Six months have gone by and Frank is doing pretty well….he thinks…but when he is asked if he

Week 6 Frank Hot Dog Cart Financial Statements Discussion Six months have gone by and Frank is doing pretty well….he thinks…but when he is asked if he is making any money, he has to stop and consider, “Am I”? We are going to make some assumptions and help him determine whether or not there is a profit. I have started the discussion with some assumptions about how Frank has performed from a sales and cost perspective. All of you will then brainstorm together focusing on answering the question “Did Frank turn a profit after the first six months of business?” Frank’s Hot Dog Cart Financials
Bank Write-Up:
Attached in a separate word document
Current Financial Statements (use the links below to access the templates)
Income Statement
Balance Sheet
als
he links below to access the templates)
Frank’s
INCOME STATEMENTS
Revenue
$
Three Months Ended
December 31,
Six Months Ended
December 31,
2019
2019
18,000
$
26,254
Operating expenses:
Cost of revenue
4,560
6,254
Sales and marketing
2,470
4,620
990
1,520
General and administrative
Total operating expenses
Net income
8,020
$
9,980
12,394
$
13,860
Back to Main
Frank’s
BALANCE SHEETS
December 31,
2019
Assets (expand the list to include all assets) – Required for Part 1 & Part 2
Current assets:
Cash and cash equivalents
$
Accounts receivable
10,110
11,240
Inventories
1,265
Other
3,240
Total current assets
Property and equipment, net of accumulated depreciation
of ____
Total assets
Liabilities and stockholders’ equity (Required for Part 2)
Current liabilities:
Accounts payable
Accrued expenses
Other
Total current liabilities
Long-term debt
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Money from Mom & Dad
Total stockholders’ equity
Total liabilities and stockholders’ equity
25,855
7,940
$
33,795
Back to Main
Bank Write-Up
I am a customer-centric individual who looks forward to my giving my customers
ultimate experience. Customer satisfaction is at the heart of the services I offer. My attractive
cart sits in the midst of a highly industrialized town centre which is densely populated. There
is a mixture of potential buyers due to the many social structures in place including colleges,
universities, religious houses as well as factories. The target market is a mixed population of
both casual workers and office staff who use every break to visit my cart for a hot dog. Once
a customer tastes one of my hot dogs, they have no option but to take more-as they have
finally confessed that one is never enough. The best aspect of this business is that there is no
off-season for hot dogs-every time is time for hot dogs.
Good pricing of my hot dogs’ way below the market price of $6 has attracted
customers of all classes. This has boosted my sales to a large extend and I anticipate to sell at
least 250 hot dogs per day. Good prices have made demand to match the purchasing power of
my target market and this as a result has boosted the amount of sales per day. My hotdogs
come with free chili and tomato sauce.
Quality of my hot dogs has also attracted the middle-class earners who value quality
rather than price. This has positioned me above the competition in the marketplace. While
there are competing sellers in my vicinity, I have differentiated my hotdogs through
packaging and branding, something which makes not only the content of the package
attractive but also the physical appearance of the packaging. In the advent of technology,
people can now book their hotdogs online and have them delivered to their doorsteps. This
has increased customer satisfaction and hence the level of sales.

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