Profit and Loss Statement
Evaluate the profit implications of switching all production to private brand coffee. Estimate key accounting variables for profitability, cash and ROE
Based on your analysis, what recommendations would you make to Giacomo?
What assumptions did you make to complete your analysis? How critical are these assumptions to your conclusions? For the monthly cash calculations, you may need to make some assumptions about how cost figures accrue each month.
Prepare a list of additinal information that you would ask for to improve the quality of your analysis.
If you have time, Analyze the profitabilitability of a mixed strategy where the company sells Grade A coffee with an advertising level of 7% and the rest of the production would be devoted to private brand coffee.