Using The Greasy Spoon Diner balance sheet in Exhibits 13-7 and 13-8, answer the following: a. What
Question:
Using The Greasy Spoon Diner balance sheet in Exhibits 13-7 and 13-8, answer the following:
a. What are the debt-to-equity ratios at the beginning and end of the 2013 fiscal (business) year? Has it improved? If so, by how much?
b. The restaurant has less cash at the end of the year than it had at the beginning. Is this a bad thing or not? Explain.
c. Does the restaurant have enough cash to pay its expenses going into 2014? Why or why not?
d. If the restaurant grew its owner’s equity by 31 percent during the 2013 fiscal year, at that rate, how much will the business have in owner’s equity after one more year (on December 31, 2014)?
e. The restaurant added some capital equipment during the year.
Did it take out another loan for that equipment, or did it pay cash? Explain your thinking.
Step by Step Answer:
Entrepreneurship And Small Business Management
ISBN: 9781292078670,9780133801248
2nd Edition
Authors: Steve Mariotti , Caroline Glackin