Question
Bio-Food Inc, a startup with annual revenue of $1.76M, is a disrupter in the prepared food space. The firm has seen rapid growth due to
Bio-Food Inc, a startup with annual revenue of $1.76M, is a disrupter in the prepared food space. The firm has seen rapid growth due to its innovative product and appeal to Millennials. The firm was started by two sisters Daniella & Rochette, in their parents basement in Wisconsin, and has managed to get their products on the shelves of two national grocery chains, within two years of the inception.
Bio Food Inc is looking to partner with Vantage Group, a private equity firm, to raise capital for their expansion. As Daniella and Rochettes focus had been on sales growth, they havent been able to focus on getting their operations streamlined. Besides, the sisters dont have a finance background and need assistance to analyze their business performance and provide recommendations on profitable growth which can be used to present to partners of Vantage Group.
- Prepare the income statement to help understand the profit margins
- What insights can you provide to Bio Food regarding their working capital; What levers can be used to optimize working capital?
- Provide analysis on Actuals vs Budget variance for FY20
- Provide your analysis on Bio Foods sales trend
- Calculate the yearly labor cost for FY21 thru FY23; Assume total FTE at the end FY20 was 5, and yearly headcount growth of 50%, and inflation of 4%.
- List possible levers to explore to improve Bio Foods operating cost
- Client would like to explore options to consolidate, centralize, and potentially outsource business services (F&A, HR, Customer Service). What criteria would you consider evaluating the options and develop a recommendation?
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