Reference no: EM133204078

Rhonda, the owner of Best Appliance and Furniture, has decided to sell the service part of her business. Samir, one of her repair persons has decided to purchase the service part of the business. Samir pays Rhonda $175,000 for the service business. He receives a small fleet of repair trucks and is assured all of the repair work for Rhonda's business will go to his business. All of this is consummated with a handshake over lunch. For the first several months, Samir is busy servicing Rhonda's clients.

Then, Samir discovers that Rhonda is contracting out to other repair companies and Samir's sales begin to decline. As well, the service vehicles that Samir had received as part of the purchase, have been breaking down and Samir has missed repair opportunities and customers have complained. The trucks are not in the good running condition that Rhonda had promised.

a. Discuss the feasibility of this business that Samir has acquired

b. What should Samir have done to avoid the situation that he is now faced with

2. Foremost Shoes

You are the owner of Foremost Shoes, a bricks and mortar retailer. You have decided to have your accountant perform an efficiency and ratio analysis of your financial statements.

a. State 2 ratios which would highlight the efficiency of your business? What do each of the ratios indicate?

b. One of the ratios indicates that your profitability is far below the industry average. What problems do you think could be causing this?

c. What approach would you use to improve the profitability?

3. a. State what your business case is about. Using your business, suggest 4 possible crisis situations you could encounter.

b. Take one crisis situation and discuss what your response plan would be to mitigate the adverse effects if the crisis situation occurred.

c. How would your business recover from the crisis based on your response?

3. a. You are going to be the CEO of the new business that you and your partners are purchasing. What should your plan entail to ensure you are fully prepared when the business changes owners?

b. Assume that the years pass by and you have decided to retire in 2024. Outline your process of planning for retirement, assuming you are the sole remaining owner.

5. a. In the business that you and your group has chosen, sales were doing well for the first two years. However, in the last 6 months, the profits have decreased and several managers have departed. Discuss the business situation at this point. b

b. Describe 3 examples of measures you could use in order to renew your business. Which measure would be most useful for your business and why?

6. a. Imelda has always abided by rules in school and been very careful not to break any laws in her adult life. Imelda does not consider herself an innovator or very creative. However, she is extremely organized and has run school events such as school dances and charity events like car washes for good causes. Now that she has graduated, Imelda wants to go into business but is not sure which business option would be best for her. Recommend a business approach that Imelda should consider. Why?

b. Outline any contracts or agreements that Imelda would need to consider and indicate some important points in the contracts/agreements.