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Green Restaurant: Breakeven and target profit

(Use the financial statements provided below to compute the percentages for all items included in the income statement sheet as a percent of revenue. Remember that total revenue is always 100 percent. Be sure to use the formula function in Microsoft Excel to show the formulas for each of the percentage you compute. After completion, compute the following: (Attached below is the financial statements (Income Statement and Balance sheet) to compute the percentages for all items included in the income statement sheet as a percent revenue.)
•CVP analysis with the following assumptions:
•Contribution margin
•Contribution margin ratio
•Current variable costs
•Fixed costs
•BEP
In addition, analyze and compute the sales figure forecast in case the owner of The Green Restaurant wants to generate a 15 percent increase in net income before taxes are deducted for the same period next year. Explain the strategies you used for computing the sales figure forecast to generate 15 percent increase in net income before tax deduction for the next year. Then in a Word document, forecast a strategy to increase the net income for the next financial year by 15 percent. Your strategy should help you to decide whether expenses on a particular item need to be decreased or more money can be invested in another item to get better net income.

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Solution Preview

See breakeven in sales given assumption and breakeven sales to achieve the new target income (15% increase) in Excel attached. Click in cells to see computations. You discussion gives you five ideas to increase profits and a discussion of how they might work.

Green Restaurant
Strategy to Increase Before Tax Profits 15 percent

In order to increase profits by 15%, you need to earn $13,322.75 (a 15% increase over current profits). There are a number of potential changes that could help you achieve this goal.

1. Increase sales prices. ...

Solution Summary

See breakeven in sales given assumption and breakeven sales to achieve the new target income (15% increase) in Excel attached. Click in cells to see computations. You discussion gives you five ideas to increase profits and a discussion of how they might work.

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