UCL-CaseAnalysis UrbanOptix Centre Limited (UCL) sells prescription eyewear, provides eye examinations, and sells high-end sunglasses. It's early 2024 , and the owner/founder Olivia Huber, is very disappointed with the financial results. She comes to you, CPA, looking for some advice. Olivia has been trying to understand the profitability of her business and has prepared a product line analysis. Given her inexperience in accounting/finance, Olivia has asked you to review her cost allocations, and make any required adjustments as provided in Appendix I. Olivia is thinking about discontinuing sales of sunglasses. She has asked you for your thoughts and the impact it would have on UCL's profitability. Olivia's friend Devon had recommended that she develop "key performance indicators" (KPIs) to use in her business. Olivia is wondering how they could be useful to her and which KPIs she should implement and why. Olivia has also asked you to provide an assessment of UCL's strengths, weakness, opportunities, and threats (SWOT analysis). As the number of patients increases, the number of eyewear sales also increase. Olivia is looking at partnering with a second optometrist (Claudia) and would like your thoughts. Olivia has provided some details of the potential arrangement in Appendix II. tOivia allocates all expenses based on gross nevenae 1. UCL has throe employees: Olivia, Dean and Rose. Rose is the receptionise, while Dean focuses on ales. 2. The cost of sales roprexents the amounts paid for materalk prescription ogewsar and sunglasses during the year, Of this amount, 76 relates to eqe cums, 71% relates to prescription cyewear and the remaining 22% relates to sanctasser. 3. UCL has a five-year lease eontract, which canest ke modified. and no changes to the lease space can be made. The total space is 1,500 square feet. Of the space, 200 sy feet relate to reception, 400 to preseription syewer, 125 to sunflases, 575 is for the eye examination, with the remaining 200 square fect is used as starape. 4. Utilities primarily relate to electricity, which is driven by square footage: 5. 95% of depreciation relates to cye ecam equipment, with the remaining 5% to famiture and fixteres. The e exam equipenent is old and will nood replacing soon. 6. Insurance is comprised of $30,000 for profosional fistiligy inserance and $25,000 for genctal premise insurance. 7. Miscellancouts expenses relante to cleaning, intemet, poutage, and other minor costs. 8. Advertising relates so local print advertisements that primarily focus en athertising cye examinations. Claudia has been identified as a potential partner. Claudia is 30 years old, became an optometrist two years ago and has been working as an employee for another optometrist since then. Claudia is ambitious and loves the "business side" of optometry. Claudia's goal is to become managing director of an optometry practice with a dozen optometrists within the next five to 10 years. Her preference is to buy into an existing practice rather than be an employee, and to increase her share quickly over time while focusing on growth. Claudia also has an IT/Marketing background, helping with her dad's electrician business, by expanding the company's online presence, including developing the company's website. Claudia just had her first child, and her husband plans to stay home with their daughter for now, so the family will be counting on Claudia to earn a competitive salary. Claudia and her husband have no capital or savings to buy into the practice. Olivia is 52 and married with two daughters, aged 16 and 22, who are students. Her family is wealthy, which allows her to take a below-market salary. Her goal is to expand her business slowly, without incurring additional debt. Olivia hopes to work for the next 10 to 15 years, and then sell her practice and retire. She is relying on realizing a significant profit when she sells the practice. The addition of an optometrist would require the purchasing of a second set of examination equipment. As Claudia is technologically well-informed, she could set up the most up-to-date equipment, which could be expensive. Olivia started UCL over 25 years ago in Peterborough, Ontario. Dean and Rose have been long time employees since the start of UCL. When Olivia started UCL, Peterborough was a small town, but has experienced significant growth over the last few years. The population has grown significantly in the Peterborough area, especially the number of seniors. While population growth has been high the last few years, the competition has also increased. Both the local Walmart and Costco opened in-store Optometrist business' several years ago. Olivia is uncertain how to compete against these larger optometrist departments. There has been a significant decrease in the number of optometrist firms in the area, and UCL is one of the few remaining optometrist practices in the area outside of Costco and Walmart