Question
VIDEO: https://youtu.be/l3pKDrK7IHg After watching the video, please answer the following questions: 1) What affect does the company's business model have on its ability to generate
VIDEO: https://youtu.be/l3pKDrK7IHg
After watching the video, please answer the following questions:
1) What affect does the company's business model have on its ability to generate cash inflows from operations? Does the way that this franchise conducts sales (direct to customer via truck) benefit its immediate cash flows? What components of the business model could have an effect on the company's operating cash flow (in other words, what elements of their business would most likely have to be paid for immediately and what items could be purchased on account?) Note: credit card companies typically transfer payment to the seller with 48 hours of the sale being conducted. Just thought you might like to know this.
2) What effect will adding more trucks to the "fleet" have on the company's return on assets? Would you expect the company's return on assets to increase, decrease, or stay roughly the same when they expanded? What makes you believe this?
3) As the end of this video shows, we are ending this semester with a massive success story. Cousins Maine Lobster's current valuation is $50 million dollars. To the best of my knowledge, Barbara still owns the 15% of the company that she originally purchased for $55,000. If Cousins Maine Lobster were to sell to a restaurant conglomerate for it's valuation, what would Barbara's return on investment be? What are you general thoughts on this?
4) The following PDF file contains historical information about the quantity and value of Maine Lobster yields: https://www.maine.gov/dmr/commercial-fishing/landings/documents/lobster.table.pdf What are your thoughts on the trend of the price per pound that lobster has sold for in the 10 years since Cousins Maine Lobster appeared on the show. Would this have an effect on their cash flow needs? Will the company have to adjust its pricing/ business model to account for the change in per pound lobster prices?
5) Lastly, what are your thoughts on the company. I have never ate a Cousins Maine Lobster but I really like seafood. If you have and you have a customer review, I would love to hear about it.
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