Atlas Case Study Big Al Smith Moving Company Situation You are the New President of Fairfield County, CT based Big Al Smith Moving Company. Big Al Smith Moving specializes in local residential moving. Below are a few facts related to the company. In Fiscal year end 2020 the company has $3,000,000 in revenue which is largely consistent with the last three years annual revenue profile. They charge $300 per hour for 3 movers. On average it takes 3 movers 10 hours to complete a local move. This includes the boxing supplies as well as physically boxing and unboxing items. Big Al is very proud of his company and boasts that it lands basically every customer that calls. The company rents 10,000 square feet of office space and a lot for their trucks which is 80% more than they need providing ample room for growth. The lease expense is $12,500 per month and is on a month by month basis. The lease does not include utilities The company employs 40 movers (full time). The average hourly rate of the movers is $15 per hour plus benefits and taxes. The movers currently work an average of 2,000 hours per year The company leases 12 trucks for $1,000 per month each. The trucks are enough to move a standard 4+ bedroom house. The master leases with Ryder is up next month. The company currently has the following office personnel (salary as listed): president ($150k), VP - not related to Al Smith ($125k), Accountant($75k), Dispatcher ($50k), HR Manager ($50k) and a Receptionist ($50k) Attached is the current income statement for Big Al Smith Moving Company Assignment Overall, what would you recommend that Big Al do and why to improve the overall financial performance of the company (think outside the box)? Prepare your own version of a proposed 2021 pro forma income statement for Big Al Smith Moving Company and compare it to the existing 2020 income statement A B c D E F 1 Atlas Case Study 2 Big Al Smith Moving 3 4 5 6 2020 Actual Revenue for move $ 3,000,000 m 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Costs Hourly wages-movers Office salaries Benefits and employment taxes (40% payroll) Truck leases Fuel Repairs and maintenance (R&M) (trucks) office/lot lease Utilities Business Insurance Cell Phones Advertising Depreciation Professional fees Office supplies $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,200,000 500,000 680,000 144,000 250,000 50,000 150,000 25,000 5,000 1,000 5,000 50,000 5,000 2,000 Total expenses $ 3,067,000 27 net income $ (67,000) -2% 28 29 30 31 32 33 34 35 Atlas Case Study Big Al Smith Moving Company Situation You are the New President of Fairfield County, CT based Big Al Smith Moving Company. Big Al Smith Moving specializes in local residential moving. Below are a few facts related to the company. In Fiscal year end 2020 the company has $3,000,000 in revenue which is largely consistent with the last three years annual revenue profile. They charge $300 per hour for 3 movers. On average it takes 3 movers 10 hours to complete a local move. This includes the boxing supplies as well as physically boxing and unboxing items. Big Al is very proud of his company and boasts that it lands basically every customer that calls. The company rents 10,000 square feet of office space and a lot for their trucks which is 80% more than they need providing ample room for growth. The lease expense is $12,500 per month and is on a month by month basis. The lease does not include utilities The company employs 40 movers (full time). The average hourly rate of the movers is $15 per hour plus benefits and taxes. The movers currently work an average of 2,000 hours per year The company leases 12 trucks for $1,000 per month each. The trucks are enough to move a standard 4+ bedroom house. The master leases with Ryder is up next month. The company currently has the following office personnel (salary as listed): president ($150k), VP - not related to Al Smith ($125k), Accountant($75k), Dispatcher ($50k), HR Manager ($50k) and a Receptionist ($50k) Attached is the current income statement for Big Al Smith Moving Company Assignment Overall, what would you recommend that Big Al do and why to improve the overall financial performance of the company (think outside the box)? Prepare your own version of a proposed 2021 pro forma income statement for Big Al Smith Moving Company and compare it to the existing 2020 income statement A B c D E F 1 Atlas Case Study 2 Big Al Smith Moving 3 4 5 6 2020 Actual Revenue for move $ 3,000,000 m 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Costs Hourly wages-movers Office salaries Benefits and employment taxes (40% payroll) Truck leases Fuel Repairs and maintenance (R&M) (trucks) office/lot lease Utilities Business Insurance Cell Phones Advertising Depreciation Professional fees Office supplies $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,200,000 500,000 680,000 144,000 250,000 50,000 150,000 25,000 5,000 1,000 5,000 50,000 5,000 2,000 Total expenses $ 3,067,000 27 net income $ (67,000) -2% 28 29 30 31 32 33 34 35