How do we conduct a financial analysis for this?

traffic when I first looked at it. This is the crossroads for three major highways. So obviously the potential is here." Having decided on the location, Marie signed a 10-year lease with option to renew for 10 more years, and then eagerly attacked the problem of outfitting the almost empty store space in the newly constructed building. She tiled the floor, put in walls of surfwood, installed plumbing and electrical fixtures and an extra washroom, and purchased the necessary restaurant equipment. All this cost $120,000 which came from her own cash savings. She then spent an additional $1,500 for glassware, $2,000 for an initial food stock, and $2,125 to advertise Marie's Ristorante's opening in the local newspaper. The paper serves the whole metro area, so the $2,125 bought only three quarter-page ads. These expenditures also came from her own personal savings. Next she hired five waitresses at $275 a week and one chef at $550 a weeks Then, with $24,000 cash reserve for the business, she was ready to open. Reflecting her sound business sense, Marie knew she would need a substantial cash reserve to fall back on until the business got on its feet. She expected this to take about one year. She had no expectations of getting rich overnight. (Her husband, a high school teacher, was willing to support the family until the restaurant caught on.) The restaurant opened in April and by August had a weekly gross revenue of only $2,400. Marie was a little discouraged with this, but she was still able to meet all her operating expenses without investing any new money in the business. By September business was still slow, and without investing any new money in the business. By September business was still slow, and Marie had to invest an additional $3,000 in the business just to survive. Business had not improved in November, and Marie stepped up her advertising-hoping this would help. In December, she spent $1,200 of her cash reserve for radio advertising-10 late- evening spots on a news program at a station that aims at middle-income earners. Marie also spent $1,600 more during the next several weeks for some metro newspaper ads. By April 2003, the situation had begun to improve, and by June her weekly gross was up to between $3,100 and $3,300 By March 2004, the weekly gross had risen to about $4,200. Marie increased the working hours of her staff six to seven hours a week and added another cook to handle the increasing number of customers. Marie was more optimistic for the future because she was finally doing a little better than breaking even. Her full-time involvement seemed to be paying off. She had not put any new money into the business since summer 2003 and expected business to continue to rise. She had not yet taken any salary for herself, even though she had built up a small surplus of about $9,000. Instead, she planned to put in a bigger air-conditioning system at a cost of $5,000 and was also planning to use what salary she might have taken for herself to hire two new waitresses to handle the growing volume of business. And she saw that if business increased much more she would have to add another cook. traffic when I first looked at it. This is the crossroads for three major highways. So obviously the potential is here." Having decided on the location, Marie signed a 10-year lease with option to renew for 10 more years, and then eagerly attacked the problem of outfitting the almost empty store space in the newly constructed building. She tiled the floor, put in walls of surfwood, installed plumbing and electrical fixtures and an extra washroom, and purchased the necessary restaurant equipment. All this cost $120,000 which came from her own cash savings. She then spent an additional $1,500 for glassware, $2,000 for an initial food stock, and $2,125 to advertise Marie's Ristorante's opening in the local newspaper. The paper serves the whole metro area, so the $2,125 bought only three quarter-page ads. These expenditures also came from her own personal savings. Next she hired five waitresses at $275 a week and one chef at $550 a weeks Then, with $24,000 cash reserve for the business, she was ready to open. Reflecting her sound business sense, Marie knew she would need a substantial cash reserve to fall back on until the business got on its feet. She expected this to take about one year. She had no expectations of getting rich overnight. (Her husband, a high school teacher, was willing to support the family until the restaurant caught on.) The restaurant opened in April and by August had a weekly gross revenue of only $2,400. Marie was a little discouraged with this, but she was still able to meet all her operating expenses without investing any new money in the business. By September business was still slow, and without investing any new money in the business. By September business was still slow, and Marie had to invest an additional $3,000 in the business just to survive. Business had not improved in November, and Marie stepped up her advertising-hoping this would help. In December, she spent $1,200 of her cash reserve for radio advertising-10 late- evening spots on a news program at a station that aims at middle-income earners. Marie also spent $1,600 more during the next several weeks for some metro newspaper ads. By April 2003, the situation had begun to improve, and by June her weekly gross was up to between $3,100 and $3,300 By March 2004, the weekly gross had risen to about $4,200. Marie increased the working hours of her staff six to seven hours a week and added another cook to handle the increasing number of customers. Marie was more optimistic for the future because she was finally doing a little better than breaking even. Her full-time involvement seemed to be paying off. She had not put any new money into the business since summer 2003 and expected business to continue to rise. She had not yet taken any salary for herself, even though she had built up a small surplus of about $9,000. Instead, she planned to put in a bigger air-conditioning system at a cost of $5,000 and was also planning to use what salary she might have taken for herself to hire two new waitresses to handle the growing volume of business. And she saw that if business increased much more she would have to add another cook