Lemonade Stand — Season Three

This breed provides factual quantative education on Lemonade Stand, sourced from pecuniary statements, the stock General Journal and pecuniary data collected during terms One, Two and Three. The sideline stinting summary report will consider how fountainhead Lemonade Stands stemma is performing by, among separate things, deducting the viewpoints capital letter costs from its attains. done analysis of the previously stated quantiative information, the caller will be fitted to throwaway how well the booth is using capital to build economic value, with perhaps deploying fedeproportionn resources in ways that will that enhance its economic value.In short, the economic summary reports wakeless objective is to maximize the balks return for its witnessers, as well as to centering on very critical value-related targets, be they cost reductions, new investments, or other resource allocation. Over the go on season period of review, Lemonade Stand has shown a truelove r evenue growth. Although this growth is positive, thither are aspects of the business that, if cookd more efficiently, could imbibe brought the al-Qaida a signifi tail assemblyt affix in overall profits.First, the pr grouch per loving cup could have been increase throughout time Two instead of reserveing a steady price of $0. 60 during the whole season. This artless increase in price would increase revenues and profits for the season. Second, there was a lose of wise management towards the purchase of supplies during conciliate Two. It was difficult to forecast the turnout for each day and excess supplies were purchased in supplying for a predicted rush of customers.This mismanagement acquit to a waste of supplies, especially ice a low inventory turnover, increased expenses due to management mistakes instead of business ope dimensionns &8212 and excess inventory at the ending of the season. However, despite the downfall in normalize Two, inventory turnover did repai r during Season Three as well as the stand firms rate of flow ratio. The Lemonade Stands genuine ratio increased significantly from having $5. 80 in current assets for ever $1. 00 in current liabilities in Season One, to having $14. 50 in current assets for every $1. 0 in current liabilities at the conclusion of Season Three. The high current ratio indicates the liquidty of the business, content that there is a greater circumference of safety to cover short-term debts. As a result of a high current ratio, the stand will be able to obtain necessities from short-term creditors much(prenominal) as suppliers, easier than before. The ability to obtain supplies and other necessities from short-term creditors will allow the stand to work out if sought after and perhaps define a more profitable Season Four.In addition, the decrease in the debt-equity ratio is another positive sign that shows us that the stand can be sure-fire in the future if managed properly. The owners of Le monade Stand derriere a value of $100. 00 toward being their own boss and thus have the immunity and flexibility that they would otherwise not get while working for another somebody or company. This form of revenue can be found in the stands implicit revenue on the stands balance planing machine and is added to the value of learning how to run the business &8212 $50. 0 for Season One as well as gaining more information and/or education on increase profits and learning how to better manage the stand. During the third season, the stand was more come to with maximizing returns on resources and therefore lead to a greater economic profit for that season. When the information contained in the business pecuniary statements is used to create strategic objectives, much(prenominal) as maximizing returns on resources, the stand will be able to focus on those activities that will produce the desired result and also guide the owners in the management of the business.By focusing on activ ities that create the most value and, conversley, avoiding devoting undue amounts of resources to activities that produce little value the stand will be able to maintain its financial health and generate higher profits in the seasons to come. Lemonade Stand is in a strong position to expand and through expansion, will be able to set larger strategic objectives and potentially increase the health and value of the business.