Project #106827 - Hot Dog Cart: Part II

I plan to start a hotdog cart vending business in the Holtville Business Complex (HBC) down town Tennessee. I look forward to target the human traffic which frequents the area between the hours of 11:00am to 3:00pm from Monday to Saturday every week. A feasibility study which I conducted in the area reveals an inadequacy of hot dog vendors and restaurants. Currently there are only two hot dog cart vendors and three restaurants; as a result the huge working populations are under serviced. Most of these people have to work really walk or drive long distances in order for them to get a bite during their lunch hour or grab a late afternoon snack. What with the long queues behind the two hot dog car vendors and the overcrowded restaurants to serve the burgeoning business people and ‘hot dog hungry’ students of Tennessee University. I have resolved to be the third vendor, and I will position myself strategically in the complex having the knowledge that the weekday population of the Holtville Complex is 4500 people, excluding Saturdays of which I will also be operating.

            Recent estimates from the American Hot Dog Council indicate that Americans consume 20 Billion hot dogs every year. Actually, 95% of the US household enjoys them. Relative to the entire American Population, that translates to 70 hotdogs per person per year, and approximately 15% of this is purchased from the vendor’s carts. Considering these figures and retail price of $4.50 per serving and a side order and beverage accompaniment, the annual sales potential in the Holtville Business Complex are is $245,500. Based on all these facts, it will be very strategic to operate in this are as vendor cart and to tap in into the pot entail sales as outlined in the above figures.

The business will be registered as Frank’s Dogs Vending Co.”To set up the business I require a 2 year loan of $9,500 in addition to my own investment of $4,500 to cater for the purchase of the cart and start up supplies.


Frank’s Dogs Vending Co Income Statement


Four Months             Eight Months            Twelve Mon

Ended Dec 31,            Ended Dec 31,            Ended Dec31,

2015                           2015                           2015

Revenue                                 $13,844                     $17,973                       $21,321

Direct Cost                           $5,948                        $7,744                        $9,198

Gross Profit                           $7,895                         $10,228                      $12,123

Gross Profit %                      57%                            57%                           57%

Operating Expenses  

Salary                                     $0                                $0                                $0

Business Licenses and Permits$500                           $500                            $500

Supplies                                  $2400                         $2400                          $2400

Equipment                              $600                            $0                                $0

Utilities                                   $330                            $330                            $330

Repairs and Maintenance       $600                            $600                            $600

Advertising and Promotion     $690                            $890                            $1060

Expensed Portion of Other

Current Assets                        $0                                $0                                $0

Depreciation and Amortization $140                                     $140                           $140

Total Operating Expenses   $                                  $                                 $

Operating Income                 $442                           $647                            $749

Other Expenses (& Other Income)  

Loss (or Gain) on Sale of Asset $0                             $0                                $0

Interest Expense                     $230                            $160                            $660

Total Other Expenses

(& Other Income)                                                                  

Income Before Income Tax             $3350                         $5600                         $7430

Income Taxes                          $310                            $520                            $690

Net Income                            $3040                         $5080                          $6740

Net Income / Sales               22%                           28%                            32%












Balance Sheets


Assets (expand the list to include all assets)

Dec 31,2015

Current assets:


Cash and cash equivalents

 $    33,723

  Accounts receivable




  Other Current assets


Total current assets


Long Term Assets



Accumulated Depreciation

Total Long term Assets


Total Assets




Liabilities and stockholders' equity (Not needed for Part 1)

Current liabilities:


Accounts payable


  Sales Taxable payable


  Short Term Debt

Total current liabilities


Long-term debt


Total liabilities


Paid in capital


Retained Earnings


Profit and Loss Current period


    Total stockholders' equity


        Total liabilities and stockholders' equity




Hot Dog Brainstorm

How does Frank know if he is making a profit?

Profit is the positive financial gain your business makes after you've subtracted all your expenses. The ability to generate profit is crucial to the survival of your business. It is about more than just making money - it's also about the capacity to use surplus funds to invest in and grow your business in the future.

In the case of Frank, there are different steps he can take to know if he is making a profit

Step 1 – track the money he receives from the business. There are two methods he can use to do the tracking; accrual-based accounting and cash-based accounting. In the accrual-based accounting, Frank is supposed to add money to the list of his asset as he earns it. Under cash based accounting, he cannot add money to his list of the asset until he receives it at his hand. This is the best method for Frank because the business is still young and it will give him an indication of how much he earns each month. After receiving the payment, he should enter the amount in the accounting system.

Step 2 – he should then add up the business expenses. He should record the expenses as he spends the money. All the expenses that help him to manage the business, from the rent for your office to the cost of goods you purchase for resale, needs to be listed. He should also list all the expenses that occur during the same period that he uses to track the if he adds up all income for the month of February, and then he should also add up all expenses for the month of February.

Step 3 – in this step, he should subtract the expenses from the income. This will show if he made a profit or loss. If the number is positive, then that profit and if it is negative, then that is a loss.

Step 4 – he should repeat this calculation for several months to determine if he is making money or losing money. In the case of loss, he needs to cut down some expenses or increase his income to maintain a successful business.




Statements of Profit and Loss and Cash Flow. (2009). Pro Excel Financial Modeling, 193-214.


Frank Enterprises Financial analysis

Today, there are several indicators that drive the uptake and growth of any business. Thus, managers use key performance indicators to measure the financial health of the business in several areas like marketing, human resource departments and finance just to mention a few. Therefore to solve the riddle in Frank business, as an investor will examine the five financial key performance indicators namely, the gross profit margin, net profit, net profit margin, aging account receivable and current ratio.

In this business, all the key performance indicators are promising, and, therefore, we need to explore of the indicators to demonstrate that this business is worth the investment. It is common knowledge that Frank is making the profit from the financial statements. The net income in the income statement shows a net profit and, therefore, Frank’s business is profitable. Below is Franks’ total amount profit has made in one financial year.

4 month’s net income


Add: 12 Months Net income


Add: 12 month’s income


Total amount



On the other hand to confirm whether these figures are plausible, there is need to countercheck and tally this number and the profit and loss accounting period in the balance sheet. Consequently, Frank makes a cool $14860 in the current fiscal year and hence the business is profitable.


Assignment: Assess your business: 

Fast forward a few months...Your friend asks you how your business is doing and you are unsure how exactly to answer. In fact, you are not necessarily sure how your business is going since you are so new to this! This part will help you organize your thoughts and come up with a more formalized process and financial reporting can help you demonstrate your success (or lack thereof!).

For your cart, come up with a way to determine profit and financial position.  Expand your Excel spreadsheet from part 1 by adding an additional tab. There is no specific format for this. Data should be reasonable based on your projections from Part 1 and include all expenses. Your grade is not dependent on whether you are making a profit.

Use the momentum from the discussion forums from week's 6-7 where we collectively brainstormed methods of (a) if the business was profitable and (b) how to measure profitability in a professional format. 

Include an analysis that summarizes your findings in a professional manner.

This part of the project should be approximately 2 - 4 pages including the financials.

















Subject Business
Due By (Pacific Time) 02/06/2016 11:00 am
Report DMCA

Chat Now!

out of 1971 reviews

Chat Now!

out of 766 reviews

Chat Now!

out of 1164 reviews

Chat Now!

out of 721 reviews

Chat Now!

out of 1600 reviews

Chat Now!

out of 770 reviews

Chat Now!

out of 766 reviews

Chat Now!

out of 680 reviews
All Rights Reserved. Copyright by - Copyright Policy