EOC: Chapter 8 Question 4

a. What were the total revenues in October 2009 and October 2010?

b. What was the GOP in dollars in October 2009 and October 2010?

c. What was the percentage of GOP to total revenues in October 2009 and October 2010?

d. What was the flow-through percentage achieved by Santi’s hotel? What is your assessment of that percentage?

Answers: 

a.    The total Revenue for October 2009 was $545,000 and the total Revenue for October

2010 was 583,000.

b. The GOP in dollars for October 2009 was $162,000 and the GOP in dollars for October

2010 was $184,550

"Gross operating profit (GOP) is, in effect, total hotel revenue less those expenses that are considered directly controllable by management"(Dopson, 296).

c.  The percentage of GOP to total revenues for October 2009 was 29.72% and for October 2010 it was 31.66% "The GOPPAR is simply defined as a hotel’s total revenue minus its management’s controllable expenses per available room" (Dopson,297).

d.  The flow through percentage achieved by Santi's hotel was 59%

"Flow-through is computed to help managers identify the impact of increases in revenue on profitability. When it is high (over 50%), it usually reflects efficiency on the part of management in converting additional revenues into additional profits" (Dopson, 297). Santi's flow through percentage is at 59%, which reflects the efficiency of his management staff.

Week 7 EOC: Trump and Small Business

My post is based off an article written by Dhani Mau for Fashionista.com. The article is entitled:

HERE'S HOW TRUMP'S WIN COULD AFFECT THE FASHION INDUSTRY AND GLOBAL TRADE.

It is basically an overview of what experts are saying in regards to Trump winning the election as well as what to expect and what damage has already been done to the markets. “Asian indexes tumbled as early projections of the U.S. election showed Donald Trump pulling ahead in the presidential race” (WWD, 2016). Also, luxury stock for European retailers such as L’Oreal and Prada are down across the board. It is important to recognize that much of what we wear and buy in America as far as apparel and accessories are made in other countries. Trumps intention to place limitations on Global Trade, could have adverse effects on the fashion industry. “When it comes to trade, Trump has proposed some pretty radical changes that could inhibit globalization, including getting rid of the Trans-Pacific Partnership deal” (Mau, 2016).  The United States is currently participating in negotiations of the Trans-Pacific Partnership (TPP) Agreement. Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam are among the 11 Asia-Pacific counties involved in negotiations. The “trade agreement that will open markets, set high-standard trade rules, and address 21^st-century issues in the global economy.  By doing so, TPP will promote jobs and growth in the United States and across the Asia-Pacific region” (United States Trade Representative, 2016). If Trump seeks to eradicate or limit the TPP, international luxury brands could take a significant hit due to increased taxes on foreign goods. Honestly, it is hard to say at this point what will or will not happen, Trumps volatile nature makes the outcome unpredictable. We will just have to wait and see what his next move is and pray that his strategy has a positive impact on the economy and global trade.  

Week 6 EOC: Marijuana in the workplace

As a business owner I would have zero tolerance for the use of marijuana in the work place. A job requires that you are fully capable of carrying out duties and responsibilities on a daily basis. That includes handling cash, interacting with customers, operating a POS system. If you show up to work high and are unable to effectively carry out those duties, you have no business working in my store.

The Food and Drug Administration classifies marijuana as a Schedule I drug, defined as the most dangerous of all drug schedules, with “no currently accepted medical use and a high potential for abuse.”

http://lifehacker.com/what-marijuana-actually-does-to-your-brain-and-body-1693986467

As a business professional working in the fashion industry you are required to maintain a polished appearance in the workplace at all times. If you are high you and display any of the following physical effects, it would be cause for dismissal. According to WebMD the physical effects of marijuana include:

dizziness, shallow breathing, red eyes and dilated pupils, dry mouth, increased appetite, slowed reaction time (If you drive after using marijuana, your risk of being in a car accident more than doubles.)http://www.webmd.com/mental-health/addiction/marijuana-use-and-its-effects

Because there are so many different ways to use marijuana and some are undetectable physically. It would be a policy at my store to do random drug testing. Even if my store was located in a state where marijuana was made legal, it is still my right as the employer to enforce company policy.

Most of the time after being hired an employer requires reasonable suspicion before having an employee take a drug test. Even with the recent legalization of marijuana in some states, employees in those states can still be punished for testing positive. The punishments for a failed drug test can include rehabilitation, termination, and losing unemployment benefits.

http://www.workplacefairness.org/drug-testing-workplace

Week 4 EOC: Chapter 5 Quiz Question 2

a. Did the change in Cash reflect a Source or a Use of funds? What was the amount of that change?

b. Did the change in Net Receivables reflect a Source or a Use of funds? What was the amount of that change?

c. Did the change in Notes Payable reflect a Source or a Use of funds? What was the amount of that change?

d. Did the change in Retained Earnings reflect a Source or a Use of funds? What was the amount of that change?

e. What was the total amount of Sources and Uses of Funds?

Answers: 

a.  It was a Use of Funds in the amount of $14,000.

Cash on the balance sheet represents an account in the bank. When you withdraw money from the bank (decrease the cash account), you have a source of funds (MGT,149).

b.  It was a Use of Funds in the amount of $30,000. Accounts receivable represents money that guests owe you for products or services that you have provided (MGT, 149).

c.   It was a Use of Funds in the amount of $44,000. Notes payable are short-term loans (less than a year). If you decrease notes payable by paying back money you borrowed, this is a use of funds for you (MGT, 152).

d.  It was a Source of Funds in the amount of $104,000, Retained earnings represent the accumulated account of profits over the life of the business that have not been distributed as dividends. If your retained earnings increases, that means you have increased your net income for the year, thus providing a source of funds (MGT, 152).

e.  Total amount of Sources is $743,000 and the Total amount of Uses is $743,000.

Sources and uses of funds are the inflows and outflows of money affecting the cash position (MGT, 147).

Week 4 EOC: Quiz Chapter 4 Question 3

a. Compare Rachel’s Cash % with the chain’s %.  Is it higher or lower?  What might this mean?

b. Compare Rachel’s Inventories % with the chain’s %.  Is it higher or lower?  What might this mean?

c. Compare Rachel’s Accounts Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

d. Compare Rachel’s Notes Payable % with the chain’s %.  Is it higher or lower?  What might this mean?

Answers:

a. Rachel's cash % is higher at 18.9% because her restaurant has more of its assets in the  form of cash.

b. Rachel's inventories % is higher at 11.4% because her restaurant has more of its assets in the form of inventories.

c. Rachel's accounts payable % is higher at 11.3% because the chain has less that it owes to others.

d. Rachel's notes payable % is higher at 2.5% She owes more than the chain.

Week 3 EOC: Best Restaurant Experience

Carol Wilson, a member of the Food Writer’s Guild once stated “food isn't the only ingredient of an enjoyable dining experience.” For me this is very true, not only does the food have to be good, but the ambiance, cleanliness and overall service are all elements that ultimately will make me want to return. Some of my most memorable dining experiences were actually in Japan. I taught English there and became really good friends with my students Junko and Yoko. One thing we loved to do regularly was go to dinner after class. One night Junko decided she wanted to take us to this restaurant called “Goose,” this particular restaurant specialized in Italian cuisine so I was very excited and intrigued.  “A good restaurant should have one or more unique features that stand out in a customer’s mind” (smallbusiness.com, 2016). The restaurant was uniquely and beautifully decorated. Each table was different with its very own bell (we had a gong, which was used to call our server). The restaurant also had beautiful light fixtures that gave off just the right amount of ambient lighting, it was cozy and I loved it. We ordered many things off the menu, however my favorite part of the meal was the giant meatball. It was served in a small pot and came out steaming and swimming in the most fragrant and delicious red sauce I have ever tasted and to make it even better there was a layer of melted cheese on top! I am salivating as I type by the way. This restaurant was by no means fancy but the food was just that good and you could tell the dishes were made to order and from fresh ingredients. As the lovely Julia Childs would say… “You don't have to cook fancy or complicated masterpieces - just good food from fresh ingredients.”

Week 2 EOC: Chapter 2 Question 4

Answers:

a. Lisas's Accrual accounting method shows the higher profit because "revenue is recorded when it is earned, regardless of when it is collected, and expenses are recorded when they are incurred, regardless of when they are paid." So in conclusion it will show the big picture once all accounts are reconciled.

b. The accounting Method that best shows the amount of cash on hand would be the accrual method.

c. The Accrual Method "instructs accountants to record expenses when they are incurred regardless of when they are paid."

d. The accounting method that most accurately shows the expenses incurred regardless of when they are paid is the Accrual accounting system.

e. The Cash accounting system would show actual cash inflows and outflow because "the system is a method that records revenue as being earned when it is actually received."

f. The accounting method that shows the most accurate reflection of the restaurants true profitability is the Accrual accounting system.