Could someone please help with question 4 parts A-E
Figure 210 Return on Assets (ROA) Model High Case 1 Higher ROA 5 Moderate Case 2 Low Low High Asset Turnover Ratios for three ventures: 78 Part 1: The Entrepreneurial VENTURE ZZ VENTURE YY ias and Performance Following is financial informatio VENTURE XX 1.0 times 3.0 times After-tax profit margins Asset tunover 2.0 times A. Calculate the ROA for each firm. B. Which venture C. which is indicative of a strong entrepreneurial venture opportunity? h similar to Figure 2.10? mation in Figure 2.9 relating to pricing/profitability and "score" each venture in tern and Profits) In early 2013, Jennifer (Jen) Liu and Larry Mestas founded Jen and Lar venture seems to be more of a commodity-type business D. How would you place these three ventures on a grap of potential attractiveness. Frozen Yogurt ompany, which was based on the idea of applying the microbrew or microbatch str egy to th e production and sale of frozen yogurt. They began producing small quantities of unique fla vors and blends in limited ed itions. Revenues were $600,000 in 2013 and were estimated at $1.2 million in 2014. Because Jen and Larry were selling premium frozen yogurt containing premium in gredients, each small cup of yogurt sold for $3, and the cost of producing the frozen yogurt averaged per cup. Other expenses, including taxes, averaged an additional $1 per cup of frozen yogurt i 2013 and were estimated at $1.20 per cup in 2014. A. Determine the number of cups of frozen yogurt sold each year B. Estimate the dollar amounts of gross profit and net profit for Jen and Larry's vert s venture in 201 and 2014 C. Calculate the gross profit margins and net profit margins in 2013 and 2014 D. Briefly describe what has occurred between the two years [Returns on Assets] Jen and Larry's frozen yogurt venture described in Problem 3 required some invest ment in bricks and mortar. Initial specialty equipment and the renovation of an old warehouse building in lower downtown, referred to as LoDo, cost $450,000 at the beginning of 2013. At the same time $50,000 was invested in inventories. In early 2014, an additional $100,000 was spent on equipment to support the increased frozen yogurt sales in 2014. to solve the following: A. Calculate the ROA in both 2013 and 2014. B. Calculate the asset intensity or asset turnover C. Apply the ROA model to Jen and Larry's frozen yogurt venture. D. Briefly describe what has occurred between the two years E. Show how you would position Jen and Larry's frozen yogurt venture in terms of the relationship be Use information from Problem 3 and this problem ratios for 2013 and 2014 tween net profit margins and asset turnovers depicted in Figure 2.10 vos Indicator" Screeningl Jen Liu and Larry Mestas are seeking venture investors to help fund the ex bected growth in their Frozen Yogurt Company venture described in Problems 3 and 4. Use the VOS ndicator guidelines presented in Figures 2.8 and 2.9 to score Jen and Larry's frozen yogurt venture in rms of the items in the pricing/profitability factor category. Comment on the likely attractiv business opportunity to venture investors. thical Issues] Assume that you have just "run out of money" and are unable to move your "idea development stage to production and the startup stage. However, you remain convinced th sonable amount of additional financial capital you will be a successful entrepreneur. Whil eness of ions are low, you are meeting with a loan officer of the Iocnl l onal loan in order to ronti fro with
