As Jill and Mike's taco/tequila business continues down at Dewey Beach, Delaware, there are some hiccups as you can imagine. Mike talked Jill into hiring new folks with part of the $50,000 loan that was supposed to go for expansion. Seemingly, these new employees have impacted the cash flow as errors increased lowering customer satisfaction and overall revenue during the peak season. Mike tried to act fast and fired the first set of staff but now the second set of employees are performing the same and his attitude is the faster he get rid of them the better.

Net Revenues went from $18,000 per month to $16,000 while operating costs went from $2000 per month to $4000 for a 3 month period from May to July, 2022. COGS also increased from $2000 to $4000. Jill is puzzled because she cannot see the reason for the lower revenue as all 3 months' Gross sales shows $19,000 on average. Mike and Jill are at odds because Jill thinks he is wrong for firing the workers as employee turnover creates inefficiency and adds unnecessary costs to a business. And Mike thinks the workers were impacting the financial efficiency of the business. Based on the data given, do you agree with Mike or Jill? Justify your response with some financial analysis. And propose one solution.

Using the various tools perform some calculations that are suitable to the problem ( vertical analysis, horizontal analysis, ratio analysis). Use the resources provided to learn more about the financial data provided. It may also be justifiable that the financial analysis points to a different source of the problem but you must explain your findings.