Bigger Isn't Always Better

Bigger Isn’t Always Better

Andre Pires opened an automobile parts store in 1997 in the Midwestern region of the United States. The name of his company is “Quickfix Auto Parts”. He has over 15 years of working experience in this type of industry; which has given him an advantage over other companies for the simple fact that he has a lot of networking opportunities through all of the people he’s meet over the years. His company’s has picked up over the years and his sales numbers have grown dramatically. Though, he doesn’t really have a good accounting or financial background, Andre really doesn’t know where to begin. His friend, in whom he confided in for advice, suggested that he hire a University Intern to help him gather the information he needs in order for him to make important business decisions regarding his company. Juan Plexo, an MBA student, has been recruited to help him, Andre, with this job.

In order for Juan to get more familiar with Andre’s business and to get an idea of how Quickfix is doing, he’ll need to take a look at the financial statements (balance sheet and profit & loss). These types of statements are regularly used by creditors and investors in helping guide them to make important investment decisions. In fact, they’re commonly used as a tool for looking at a company’s liquidity and profitability. Juan can also take a look at Quickfix’s income statement to measure its current financial performance and to help him project its profit and cash flow potential. I would also suggest that Juan do a financial analysis in order to get a grasp of Quickfix’s performance. As for Quickfix’s Compound Average Growth Rate, also known as (CAGR), it’s at an 11.05% and its Net Income CAGR is at a -136.10%. Now, let’s take a look at some things Juan should suggest Andre do to help Quickfix get an idea of how they’re doing compared to other industries like them. Juan should do a benchmarking analysis, which simply takes other businesses like Quickfix but better or the best in their industry, and compare their results and processes. This can actually help Quickfix plan on how to adopt such practices within their own company with the intentions of increasing performance. Juan should also analyze Quickfix’s debt and equity, an important thing to look at since Investors, Lenders (he does want a loan), and Bankers look for when providing businesses with financial monies. Juan will need qualitative information in doing his financial analysis; which simply refers to the assessment of the viability, stability and profitability of Andre’s company, Quickfix. Ratios can be used to prepare the reports that Andre can use to make his important financial decisions for the company. Juan can take these numbers off the financial statements and other reports the business’ software produces. With these ratio’s, Juan can analyze how Quickfix is doing from one year to