Famous Pastry Co. After investigating the different forms of business organization, Julia decides to operate her business as a corporation, Famous Pastry Co., and she begins the process of getting her business running. While at a trade show, Julia is introduced to Mr. Grumpy Gordon, CEO of GoodFood a national food retailer. After much discussion, Gordon asks Julia to consider being GoodFoods major supplier of puff and croissant pastries. He provides Julia with the most recent copy of the financial statements of GoodFood. He expects that Julia will need to supply GoodFoods Jakarta warehouse with approximately 200 dozen frozen pastries every week. Julia is to send GoodFood a monthly invoice, and she will be paid approximately 30 days from the date the invoice is received in GoodFood Bandung office. Julia is thrilled with the offer. However, she has recently read in the newspaper that GoodFood has a reputation for selling pastries and donuts with high amounts of sugar and fat, and as a result, consumer demand for the companys products has decreased.

Question 2:

Julia has several questions. Answer the following questions to help Julia.

a) What financial statements would Julia need in order to evaluate whether GoodFood will have enough cash to meet its current liabilities? Explain what to look for.

b) What financial statements would Julia need in order to evaluate whether GoodFood will be able to survive over a long period of time? Explain what to look for.

c) What financial statement would Julia need in order to evaluate GoodFood profitability? Explain what to look for.

d) Where can Julia find out whether GoodFood has outstanding debt? How can Julia determine whether GoodFood would be able to meet its interest and debt payments on any debts it has?s e) How could Julia determine whether GoodFood pays a dividend?

f) In deciding whether to go ahead with this opportunity, are there other areas of concern that Julia should be aware of?