OMM 622 Week 6 Final Paper Financial Statement Analysis 2023

OMM 622 Week 6 Final Paper Financial Statement Analysis 2023. In fulfilling a financial statement analysis, it is essential to examine and determine a business's financial statements to make more sound economic decisions. In presenting this paper the financial report will include how the company was created, the industry it caters to, and how the economy could influence the company in the future. The paper will consider the company's short-term liquidity, operating efficiency, capital structure, and the profitability and in the end suggesting ideas toward future trend analysis. Background Have you ever seen a beaver with a hunter's cap on as a logo on a company's sign? If not then you must not have traveled through Texas. The beaver in the red baseball cap known as Buc-ee the Beaver and is well known at the establishments called Buc-ee's. Buc-ee's is a chain of convenience stores located in the Texas area. There are locations in the South, North, Central, and Southeast areas of Texas. Buc-ee's is a privately owned company was founded in Lake Jackson, Texas by Arch "Beaver" Aplin III and Don Wasek. Lake Jackson continues to be where the company's headquarters is located. The stores are well known for their clean bathrooms along with their specialty items, gas, and food. The company initially opened its first store in 1982 in Lake Jackson, Texas and had become a huge chain of 21 stores throughout the state 26 years later. In 2017 "Forbes estimates that the privately held company had revenue last year of $275 million" (Carbonara, 2017, para. 2). While the company is a Texas brand, there have been offers to the company to take their chain outside of Texas. Now there are new locations listed to be in FINANCIAL STATEMENT ANALYSIS 3 Alabama and Florida. Construction has already begun in Alabama and should start soon in Florida. Short Term Liquidity Reviewing the company's ability to have the necessary cash available to continue its operations while also paying its short-term debt is crucial. Buc-ee's is a privately owned limited company and not too much of its financial information is public. This company does not have any shareholders, and there are only the co-owners, Arch "Beaver" Aplin III and Don Wasek. The company is reported to achieve revenue for 12 to 20 million dollars annually for each new store it opens (Streit, 2015). Short-term liquidity is determined by how much the company revenue the company has on hand to satisfy its short-term debt. The result that companies want to achieve is to be able to maintain a steady cash flow in the company without causing the inability to pay its bills. "The cash balance problem is then to determine an allocation of liquid assets into cash and a portfolio of short-term investments that is responsive to the continual stochastic inflows and outflows of cash and other financial commitment" (Kallberg, White & Ziemba, 1982, p. 670). Buc-ee's utilizes its incoming cash to satisfy its creditors especially in acquiring property in locations used to construct and open the new stores. In scouting out new places, the company looks for areas that are outside of the central city cavity where land ownership is less expensive, and acreage is more substantial. The company pays for the land instead of leasing it to own it outright. The company also can pay its employees over the minimum wage instilled by the State of Texas by 50% higher than minimum wage and 40% higher than industry averages (Streit, 2015). Bloomberg (2018) report shows that the company has $510,000 in short-term compensation, which indicates that the company's executives are paid handsomely in bonus incentives for meeting the company's business goals for the fiscal year.