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Chapter 5: Evaluating Operating and Financial Performance MINICASE Scandi Home Furnishings, Inc. Rasmussen founded Scandi Home Furnishings as a corporation during mid 2010 Sal duning the first full year 2011 of operation reached $1.3 milion Sales increased by 15 percent in 2012 and another 20 percent in 2013. However, after increasing in 2012 2011 profits fell sharply in 2013. causing Kato wonder what was happening to his pride and joy business venture. After all Kaj word as closely as possible to a 27 pace, beginning with the startup of Scandi and continuing through the first three years of coration Scand Home Furnishings located in eastern North Carolina, design, manufactures and sels Scandinaviandesigned furniture and accessories to home furishings retailers The mode Scandinavian design has a streamlined and uncut teed look. While this future style is primarily associated with Damak, bath Norwegian and Swedish designers have contributed to the allure of Scandinavian home amistings. Some that the inspiration for the Scandinavian design can be traced to the elegant burves of art nouveau from which designers were able to produce aesthetically pleasing structurally strong modern furniture Danish furnishings and the home furnishings produced by the other Scandinavian countriesSweden, Norway, and Finland are made using wood primarily to male and at alami, stool and high grade plastics Kaj grew up in Copenhagen, Denman and received an undergraduate degree from a technical university in Sweden As is typical in Europe. Kaj began his business career as an artis at a major home furnishings manufacturer in Capenhagen Alter learning the t h e quickly moved into a manajement position in the form However, after a few year Kemalized that what he really wanted to do was to start and operate his own Scandinavian tone fumistings business At the same time, after traveling throughout the world he was sure that he warned to be an entrepreneur the United States. Kaj moved to the United States in early 2010. With $100.000 of his personal assets and $210.000 from vanturi ston, he began operations in mid 2010. Ke with a 40 percent ownership Interest and industry-related mangement expertise, was lowed to operate the vetture in a way that he thought wis best for Scandi Four years Lates. Kaj is s he did the night thing Following are the three years of income statements and balance sheets for Scandi Home Furnishings kafelt that that he would need to continue to expand sales to maintain a competitive advantage Atarfest concerning on selling Scan dinavian home furnishings in the Northeast in 2011 and 2012 he decided to enter the West Coast market. An inc i n expenses occurred as and with dening contacting and sing to home furnishings recies in Caitomia, Oregon and Washington kaj en hopes that you can hela tin better understand what has been appoing to Scand Home Furnishings from both operating and financial standpoints SCANDI HOME FURNISHINGS, INC INCOME STATEMENTS 2011 2012 2013 sold 00 Det of Gespot General and res Caming beses Netcom Card (continued on next page 192 Part O Opening the Veste Scandi Home Furnishings, Inc. (Continued SCANDI HOME FURNISHINGS, INC. BALANCE SHEETS 2011 2012 $ 0000 200.000 300.000 51.000000 $ 170.000 Botto Dood 330.000 40000 350.000 120 000 $1.200.000 $140,000 350 Sand con stock w was compr a is mid-2010 ssen and the vetture investors when Your first challenge is to advise on what has been happening with Scan Home Furnishings from a liquidity perspective A was particularly concerned by the drop in cash from $50 000 in 2011 to $10.000 in 2013 Calce the current te culcate and the NWC-to- al-assets ab for 2011-2012 and 2012-2013 What has happened to Scand's loudly position should be din nowing whether Scand has been building or tuming cash Compare the build a and the net cash budu position for 2012 and 2013 What if any changes have occurred Part Your second challenge is to advise on what has been coming to Scand from a financial leveg grob and C reditors, as well as management are also come about the ability of the vente met de obligations they come to the proportion of tables too det the ability of assets to meet debt obligations th e financial and the lives of equity investment debt levels Calculate verge of these areas for the 2011-2012 and 2012-2013 periodisteet your us and plain what has to to Scandi figortance to and the venture investors is the efficiency of the c onse nte Sawal proft slaning to the income statement amb to help Scand's peace Cal e a -agination for 2011-2012 and 2012-2013 and desbe what is going bread o Scand Furnishings EG and the ture or areas in how they deser t the ture's tal e s Calculate s thet are from the income d ance sheets and c are what has happened between the 2011-2012 and 2012-2013 periods ROA model consisting of the producto s provides an overview of a veure's efficiency and meine A ROE del costs of the product of the sand simultaneously shows 's and performance Calculate ROAD HOE models for the 2017 2012-2013 periode Provide an ion of your finding F Chapter 5: Evaluating Operating and Financial Performance MINICASE Scandi Home Furnishings, Inc. Rasmussen founded Scandi Home Furnishings as a corporation during mid 2010 Sal duning the first full year 2011 of operation reached $1.3 milion Sales increased by 15 percent in 2012 and another 20 percent in 2013. However, after increasing in 2012 2011 profits fell sharply in 2013. causing Kato wonder what was happening to his pride and joy business venture. After all Kaj word as closely as possible to a 27 pace, beginning with the startup of Scandi and continuing through the first three years of coration Scand Home Furnishings located in eastern North Carolina, design, manufactures and sels Scandinaviandesigned furniture and accessories to home furishings retailers The mode Scandinavian design has a streamlined and uncut teed look. While this future style is primarily associated with Damak, bath Norwegian and Swedish designers have contributed to the allure of Scandinavian home amistings. Some that the inspiration for the Scandinavian design can be traced to the elegant burves of art nouveau from which designers were able to produce aesthetically pleasing structurally strong modern furniture Danish furnishings and the home furnishings produced by the other Scandinavian countriesSweden, Norway, and Finland are made using wood primarily to male and at alami, stool and high grade plastics Kaj grew up in Copenhagen, Denman and received an undergraduate degree from a technical university in Sweden As is typical in Europe. Kaj began his business career as an artis at a major home furnishings manufacturer in Capenhagen Alter learning the t h e quickly moved into a manajement position in the form However, after a few year Kemalized that what he really wanted to do was to start and operate his own Scandinavian tone fumistings business At the same time, after traveling throughout the world he was sure that he warned to be an entrepreneur the United States. Kaj moved to the United States in early 2010. With $100.000 of his personal assets and $210.000 from vanturi ston, he began operations in mid 2010. Ke with a 40 percent ownership Interest and industry-related mangement expertise, was lowed to operate the vetture in a way that he thought wis best for Scandi Four years Lates. Kaj is s he did the night thing Following are the three years of income statements and balance sheets for Scandi Home Furnishings kafelt that that he would need to continue to expand sales to maintain a competitive advantage Atarfest concerning on selling Scan dinavian home furnishings in the Northeast in 2011 and 2012 he decided to enter the West Coast market. An inc i n expenses occurred as and with dening contacting and sing to home furnishings recies in Caitomia, Oregon and Washington kaj en hopes that you can hela tin better understand what has been appoing to Scand Home Furnishings from both operating and financial standpoints SCANDI HOME FURNISHINGS, INC INCOME STATEMENTS 2011 2012 2013 sold 00 Det of Gespot General and res Caming beses Netcom Card (continued on next page 192 Part O Opening the Veste Scandi Home Furnishings, Inc. (Continued SCANDI HOME FURNISHINGS, INC. BALANCE SHEETS 2011 2012 $ 0000 200.000 300.000 51.000000 $ 170.000 Botto Dood 330.000 40000 350.000 120 000 $1.200.000 $140,000 350 Sand con stock w was compr a is mid-2010 ssen and the vetture investors when Your first challenge is to advise on what has been happening with Scan Home Furnishings from a liquidity perspective A was particularly concerned by the drop in cash from $50 000 in 2011 to $10.000 in 2013 Calce the current te culcate and the NWC-to- al-assets ab for 2011-2012 and 2012-2013 What has happened to Scand's loudly position should be din nowing whether Scand has been building or tuming cash Compare the build a and the net cash budu position for 2012 and 2013 What if any changes have occurred Part Your second challenge is to advise on what has been coming to Scand from a financial leveg grob and C reditors, as well as management are also come about the ability of the vente met de obligations they come to the proportion of tables too det the ability of assets to meet debt obligations th e financial and the lives of equity investment debt levels Calculate verge of these areas for the 2011-2012 and 2012-2013 periodisteet your us and plain what has to to Scandi figortance to and the venture investors is the efficiency of the c onse nte Sawal proft slaning to the income statement amb to help Scand's peace Cal e a -agination for 2011-2012 and 2012-2013 and desbe what is going bread o Scand Furnishings EG and the ture or areas in how they deser t the ture's tal e s Calculate s thet are from the income d ance sheets and c are what has happened between the 2011-2012 and 2012-2013 periods ROA model consisting of the producto s provides an overview of a veure's efficiency and meine A ROE del costs of the product of the sand simultaneously shows 's and performance Calculate ROAD HOE models for the 2017 2012-2013 periode Provide an ion of your finding F