HIUU

Case 2
Bark & Co.

Can a subscription service aimed at dog but 75 percent of Bark & Co.’s revenue still comes from its
owners grow fast enough to satisfy BarkBox subscriptions.
the demands of the venture capital Bark & Co.’s annual sales have doubled in each of the
last two years and now total $100 million. The company em-
companies that have invested in it?
ploys 150 people but owns no warehouses, choosing instead
A fter Matt Meeker, Henrik Werdelin, and Carly Strife

met through mutual friends, the trio decided to launch a
to outsource the packing and shipping of its BarkBoxes. Al-
though Bark & Co.’s subscription business is profitable, the
company as a whole is not yet profitable but is cash-flow
business together. They noticed that consumer spending on positive. The company has built its customer base primarily
pets in the United States had grown by 33 percent between through social media, landing 1.2 million Instagram follow-
2006 and 2011 to $51 billion, two-thirds of which owners ers and 2.1 million Facebook likes.
spent on dogs. The entrepreneurs also saw the success that In 2016, Bark & Co. raised an additional $60 million in
Birchbox, a company that sells cosmetic and beauty sup- funding from venture capital companies, including August
plies through a subscription model, had achieved and began Capital and Resolute Ventures, to fuel its growth. Competi-
soliciting valuable advice from that company’s cofounders tors, including PetGiftBox and PawPack, have entered the
about their business model. In 2011, while still working in market, but Bark & Co. remains the dominant player in the in-
their day jobs, Meeker, Werdelin, and Strife used their own dustry segment. The entrepreneurs recognize the importance
money and investments from family members and friends to of constant innovation and have created BarkBeta, a team
launch Bark & Co., a business that for about $20 per month that is charged with developing new business ideas for the
ships boxes of dog treats and toys to subscribers. In their company. BarkBeta’s budget is 1 percent of the company’s
first month, the trio shipped 94 boxes to friends and acquain- revenue. Several of the company’s innovations have failed,
tances who had signed up. To differentiate their company’s including BarkCam, a mobile app designed to connect peo-
products, the entrepreneurs scoured Etsy, The Grommet, and ple with rescue dogs, and BarkCare, an in-home concierge
trade shows, looking for items that pet owners could not find veterinary service launched in New York City and San Fran-
at large chains such as PetSmart and PetCo. Each box fol- cisco. Bark & Co. currently is exploring BarkAir, a chartered
lows a theme. For instance, one April, the BarkBox included jet service that allows people and their dogs to fly together in
baseball-shaped cookies and toys that resembled baseball comfort and style, and an Ancestry.com-style DNA test for
caps and bats. The boxes have a gross profit margin of about dogs (“Any wolf in your genes?”). The company also is test-
36 percent of sales, and the company has shipped more than ing “pup-up” retail stores that will allow dogs, each equipped
4.5 million of them. with RFID technology and unaccompanied by their owners,
Sales began to grow, and in 2012, Meeker, Werdelin, and in shifts of five to enter the store and “shop” for their favorite
Strife landed $1.7 million in venture capital; they received toys and treats while their owners watch.
another $15 million from venture capital firms over the next Meeker, Werdelin, and Strife are feeling pressure from
Copyright © 2018. Pearson Education Limited. All rights reserved.
two years. Meeker says that with its blend of unique prod- the company’s venture capital investors. Because of the risks
ucts, Bark & Co., which is based in New York City, tapped associated with their investments in young companies, ven-
into a large and growing segment of dog “parents” who treat ture capital firms expect to receive returns of at least five times
their pets like children. Today, pet industry sales are $70 bil- their original investments. For the venture capital firms that in-
lion per year, and Bark & Co. has extended its product of- vested in Bark & Co. to get back five times what they invested,
ferings beyond its original BarkBoxes to include BarkShop, the company will have to grow to an estimated $500 million
an e-commerce site that allows dog owners to purchase a in sales within the next three or four years. Meeker says that
variety of products without committing to a subscription. the founders’ goal is to give the investors a return of 100 times
The founders say that BarkShop has sold 25 million prod- their investment by becoming the next “Disney for dogs.” The
ucts. Its BarkPost blog, filled with dog news and feel-good question is: Can the entrepreneurs produce those challenging
stories, attracts 10 million unique visitors per month and is results, and, if so, how do they do it?
supported by advertisers such as American Express, Procter
& Gamble, Subaru, and others. BarkLive sponsors events Questions
aimed at dogs and their owners, such as BarkFest, a day-long 1. What advantages does a subscription pricing model
festival in cities across the United States that features live offer a business?
music and fun events. The company’s product extensions 2. Notice that several of Bark & Co.’s ideas for new busi-
carry gross profit margins that average 50 percent of sales, nesses have failed. Is this unusual? Why is it important
797
Scarborough, Norman M., and Jeffrey R. Cornwall. Essentials of Entrepreneurship and Small Business Management, Global Edition, Pearson Education Limited, 2018. ProQuest Ebook
Central, http://ebookcentral.proquest.com/lib/aut/detail.action?docID=5573768.
Created from aut on 2021-03-24 19:31:48.
Z03_SCAR6022_09_GE_CS2.indd 797 06/07/18 5:39 PM

for businesses to continue to innovate, even when their expectations affect entrepreneurs’ decisions about their
founders know that many of the innovations will fail? businesses? Explain.
What steps can Meeker, Werdelin, and Strife take to 5. What strategies should Meeker, Werdelin, and Strife
encourage creativity in their company? use to continue their company’s impressive growth
3. Explain the advantages and disadvantages of using rate? Are there other related businesses that they
venture capital to finance a company’s growth. should enter? Explain.
4. Because of the risks associated with their investments,
Sources: Based on Abram Brown, “The Alpha Pup,” Forbes, July 26,
venture capital firms, which become part owners 2016, pp. 46–48; Tomio Geron, “Bark & Co. Raises $60 M, Sets Sights on
of the companies in which they invest, demand big Global Brand for Dogs,” Wall Street Journal, May 17, 2016, https://www
returns within relatively short time frames. What im- .wsj.com/articles/bark-co-raises-60m-sets-sights-on-global-brand-for-
dogs-1463482801; Donna Fenn, “How Bark & Co. Sold 20 Million
pact do these expectations have on business founders Products and Dominated the Dog Subscription Space,” Inc., March 24,
such as Meeker, Werdelin, and Strife? Do investors’ 2016, https://www.inc.com/donna-fenn/2016-30-under-30-bark-co.html.
798

Case 3
Cousins Maine Lobster

Sabin Lomac and Jim Tselikis launched prospective franchisees. Because they had been operating
Cousins Maine Lobster as a food truck in their food trucks, which now numbered four, for only a year,
southern California. Would you purchase they spent many long days developing training manuals and
courses for franchisees. They were still learning about pay-
a franchise from this fast-growing
roll, insurance, and maintaining quality control and were
franchisor? busy opening an e-commerce division focused on shipping
S ome of the fondest memories that cousins Jim Tselikis

and Sabin Lomac have of their childhood days near Port-
lobster and other seafood products directly to customers
across the country.
Once their Franchise Disclosure Document was com-
land, Maine, are family picnics that featured fresh, locally pleted, Tselikis and Lomac made a follow-up appearance
caught lobster and lobster rolls. Eventually, both Tselikis on Shark Tank, where they announced that they were selling
and Lomac moved away, Tselikis to Boston and Lomac to Cousins Maine Lobster franchises. Their appearance gar-
Los Angeles. In 2011, Tselikis flew to the West Coast to nered more than 1,000 inquiries from would-be franchisees,
visit his cousin, and over drinks one evening, the two began and the flood of applications continues. Franchise Develop-
reminiscing about the wonderful fresh lobster meals they ment Group conducts the initial screening of the applica-
had enjoyed as kids. They also noted the popularity of food tions, before Tselikis and Lomac interview the remaining
trucks and decided to pool their resources to launch a side applicants either by phone or Skype. They make the final
business, Cousins Maine Lobster, that would serve lobster decision about awarding franchises only after meeting can-
flown in from Maine in the form of lobster rolls (chunks of didates in person at one of the company’s discovery days
lobster meat served on split-top rolls topped with butter), in Los Angeles. Every potential franchisee spends time in
lobster tacos, lobster bisque, and clam chowder. They in- one of the company-owned food trucks, and Tselikis and
vested $20,000 of their own money, bought a food truck, Lomac have learned to include the chef’s opinions in their
and began outfitting it as a rolling lobster wagon. In April final decisions about awarding franchises, pointing out that
2012, on their first day in business, Tselikis and Lomac saw they are almost always right about which candidates will
a line of customers that wrapped around the block. Business be successful. Currently, the company, which generates
was so brisk that they ran out of food, and they knew that $20 million in annual sales, has 20 food trucks in 13 cit-
they were on to a business with real potential. Within six ies across the United States, with more on the way, includ-
months, they quit their jobs to run the business as a full-time ing some in international markets. Cousins Maine Lobster
venture. estimates that franchisees’ total investment ranges from
Local media coverage led to an appearance on ABC’s $143,000 to $345,000. Franchisees pay an upfront franchise
Shark Tank, where the cousins pitched their idea to the fee of $38,500, an ongoing royalty fee of 8 percent of their
sharks and endured intense questioning. During the eight gross sales, and a 2 percent advertising fee. Looking back,
weeks leading up to the show, Tselikis and Lomac practiced Tselikis and Lomac say that although their journey into
their elevator pitch, reviewed their company’s financials to franchising has presented a steep learning curve and that
come up with a value for the business, and rehearsed an- relinquishing control to franchisees can be disconcerting,
swers to the questions they thought the sharks might ask. they are extremely satisfied with the path they have taken
At the end of their segment, Barbara Corcoran agreed to and the results so far.
invest $55,000 in return for 15 percent of the company
(which established a value of $367,667 for Cousins Maine Questions
Lobster). Corcoran proved to be a valuable investor, helping 1. Suppose that your best friend is considering purchas-
Tselikis and Lomac land appearances on national television ing a franchise such as Cousins Maine Lobster. What
shows, including The Today Show, Good Morning Amer- advice would you give him or her about the right way
ica, Master Chef, and others, and helping them realize that to go about purchasing a franchise?
franchising would be the ideal way to expand their busi- 2. What advantages do entrepreneurs who purchase a
ness. Although Tselikis and Lomac had never envisioned franchise get? What disadvantages do they encounter?
franchising when they started Cousins Maine Lobster, they 3. What is the Franchise Disclosure Document? How
began working with the Franchise Development Group to can it help prospective franchisees evaluate the vari-
create the Franchise Disclosure Document that the Federal ous franchise operations in which they are considering
Trade Commission requires every franchisor to provide to investing?
799

4. Cousins Maine Lobster wants to expand its franchise Sources: Based on Jason Daley, “The Maine Course: A Case Study,” En-
trepreneur, March 2015, pp. 76-83; Jim Tselikis, “‘Shark Tank’ Success
internationally. How popular is franchising as an “ex- Story: How Lobster Truck Guys Turned $20,000 into $20 Million,” CNBC,
port” to other nations? What steps should Tselikis and June 2016, http://www.cnbc.com/2016/06/30/shark-tank-success-story-
Lomac take to cultivate a successful international fran- how-lobster-truck-guys-turned-20000-into-20-million-commentary.html/;
“Cousins Maine Lobster,” Entrepreneur, 2017, https://www.entrepreneur
chise operation? .com/franchises/cousinsmainelobster/334512.
800

Case 4
ThinkImpact
Which business model is best for bring in up to $100,000 per year. However, if Garlick wants to
enabling a young social entrepreneur to realize ThinkImpact’s mission, he estimates that he will need
engage college students in partnering an additional $200,000 to $250,000. As he has learned, raising
money for a nonprofit is never-ending and takes valuable time
with residents in developing nations to
away from achieving the organization’s mission.
start businesses?
Option 2: Shut down the nonprofit and start a
W hen Saul Garlick was a young boy, he traveled with his
family to Delani, a rural community in Mpumalanga, South
for-profit company. Under this scenario, the for-profit
company would purchase ThinkImpact’s assets and pay off
Africa, and was shocked by the antiquated conditions and its debts, essentially giving Garlick and his employees a
lack of schools in which the residents of the small village fresh start. To finance the new company, he could borrow
lived. He pledged to do something to help. When he was 18, money and approach family members and friends who have
Garlick launched a nonprofit organization, Student Move- indicated that they would invest in a for-profit company if
ment for Real Change (SMRC), and raised $10,000 to build there is a chance of earning a return on their money. The
a school in Delani. Over the next few years, Garlick’s vision for-profit business would generate revenue by charging
for the nonprofit expanded, and SMRC began to focus on colleges and universities a fee to provide students with
sending college students to live with local families in South meaningful, immersive international experiences that focus
Africa and build entrepreneurial ventures with them. While on social enterprise. Garlick estimates that the for-profit
attending graduate school at Johns Hopkins School of Ad- company would hit its breakeven point in three years. His
vanced International Studies, Garlick took 18 undergraduate primary concern is whether colleges and universities would
students on a five-week trip to Mpumalanga. He was dis- be as open to working with a for-profit company as they are
mayed when he saw that the school he had built years before with a nonprofit such as ThinkImpact.
was shuttered and in total disrepair. Option 3: Keep the nonprofit organization but start
It was then that Garlick realized that simply throwing a for-profit business as a subsidiary. This hybrid model
money at a problem would not fix it. incorporates the advantages of the first two options. The
He committed himself to finding a scalable, sustainable nonprofit could still pursue grants and donations, and the for-
solution based on a social entrepreneurship model. Garlick profit operation could utilize traditional sources of financ-
began to reimagine SMRC. What if, he thought, he could ing, including debt, which would make ThinkImpact less
take bright, enthusiastic college students from around the dependent on somewhat unpredictable grants and donations.
world to Africa and have them work with local people to One concern that Garlick has is the potential for a conflict of
develop new ideas and solutions to the most pressing local interest if he is a stockholder in the for-profit subsidiary and
problems? He changed SMRC’s name to ThinkImpact and the executive director of the nonprofit parent company.
began raising money to fund its mission. By 2009, Garlick
Questions
was raising $400,000 annually to support ThinkImpact; un-

fortunately, costs were running higher. Like leaders of most 1. Which organization structure should Garlick use for
other nonprofit organizations, he was frustrated because ThinkImpact? Explain.
raising money is an ongoing process that demands a great 2. If Garlick chooses to create a for-profit entity, either to
deal of time and takes away from the time they spend on replace the current nonprofit organization or as a sub-
achieving their mission. Still, he was encouraged because sidiary, what potential sources of funding might he be
ThinkImpact had gained traction and was beginning to make able to tap?
a difference in local communities in South Africa and Ke- 3. What steps should Garlick take before approaching
nya. After missing a couple of payrolls for ThinkImpact’s some of the potential sources of funding you described
small staff, however, Garlick began to consider other ways in question 2?
that he could accomplish the organization’s mission.
After attending a workshop with other social entrepre- Sources: Based on Esha Chhabra, “A Social Entrepreneur’s Quandary:
neurs, Garlick identified three options: Nonprofit or For-Profit,” New York Times, July 10, 2013, http://www.nytimes
.com/2013/07/11/business/smallbusiness/a-social-entrepreneurs-dilemma-
Option 1. Remain a nonprofit organization. ThinkImpact nonprofit-or-for-profit.html; Nicole Marie Richardson, “Transformative
Thinking for Sale,” Inc., May 8, 2013, https://www.inc.com/30under30/
has contracts with two universities that generate $50,000 annu- nicole-marie-richardson/think-impact-saul-garlick-2013.html; “What
ally. In addition, Garlick expects that grants and donations will We’ve Done,” ThinkImpact, 2017, http://www.thinkimpact.com/about.
801

Case 5
Intertech Construction Corporation

How can this custom construction of customers who do not pay invoices on time (and a few
company improve its financial results? that have not paid the company at all). On several occasions,
Intertech has had to file lawsuits to collect what customers
G eneral contractor Art Stadlen started Alamo Building
Corporation in Hollywood, Florida, in 1971, taking on any
owe, an expensive proposition that the Stadlens prefer to
avoid. After a steep downturn during the Great Recession,
sales rebounded; however, for the last several years, revenue
residential and commercial work he could find. His spe-
has been stagnant, and profit margins have actually declined.
cialty was “buildouts”—customized interior jobs. The com-
To remain competitive, the company has invested more
pany grew slowly, and in the early 1980s, Stadlen landed a
heavily in technology and training employees. Joseph points
contract for work on more than 100 locations for Hair Cut-
out that Intertech has been able to take on high-end jobs but
tery, a fast-growing chain of hair salons. In 1987, Stadlen
is frustrated that its measures of profitability are declining.
changed the name of his company to Intertech Construction
Art Stadlen and his wife Ilene, who helped him build
Corporation.
the company, are ready to retire and want to turn Intertech
In 1996, Stadlen’s son Joseph joined the company after
over to their sons. However, they do not have a management
graduating from the University of Florida with degrees in
succession plan in place and have done no significant estate
marketing, management, and economics. As Joseph moved
planning aside from creating wills. The Stadlens have never
up in the company, he took on more responsibility, ulti-
created a business plan for their company.
mately guiding the business into the world of computers and
automation. Joseph, who is now president of the company, Questions
was able to double the company’s annual sales to more than
1. Identify possible causes that could explain Intertech’s
$13 million. In 2001, Stadlen’s other son, Aaron, joined In-
declining profitability. What steps can the Stadlens take
tertech after graduating from the University of Florida with
to reverse this alarming trend?
a degree in fine arts. His acumen for business enabled him to
2. What can the Stadlens do to manage their company’s
become the company’s chief financial officer.
cash flow more effectively?
Since Stadlen’s sons have become part of the company,
3. What steps should the Stadlens take to avoid problems
Intertech has carved out a niche in building out interiors for
with the company’s accounts receivable? How danger-
upscale retailers such as Hermès, Perry Ellis, Salvatore Fer-
ous is this threat? Explain.
ragamo, Tumi, and others and food service companies rang-
4. What should Art and Ilene Stadlen do to ensure a
ing from Ben & Jerry’s to Zinburger. About 75 percent of its
smooth transition in handing over the Intertech reins to
jobs are in southern Florida. Intertech’s sales are seasonal.
their sons? What tools can they use to transfer owner-
The third quarter is busiest, typically with 15 to 17 projects;
ship? What are the implications for waiting as long as
the remaining three quarters of the year generate six to eight
they have to address management succession issues?
projects. With 27 full-time employees, seasonal sales put a
strain on the company’s cash flow. Sources: Based on Julie Landry Laviolette, “Small Business Makeover:
The average price of a job is $350,000, about $250 Building a Makeover for Hollywood Construction Company,” Miami
Herald, December 6, 2015, http://www.miamiherald.com/news/business/
per square foot. The Stadlens say that their customers are biz-monday/article48340830.html; “About,” Intertech Construction Corpo-
good clients, but Intertech has more than the normal share ration, http://www.iccbuild.com/about/.
802

Case 6
Bluffton Pharmacy
Two New Pharmacy Owners Learn hours in the store and have learned many valuable lessons
as business owners that they had not had the opportunity to
Valuable Lessons About Financial
learn as employees of large chain pharmacies where they
Statements and Analysis had previously worked.
I t has been a little more than two years since Angela Craw-
ford and Martin Rodriguez purchased the Bluffton Pharmacy
Crawford and Rodriguez just received an e-mail from
their accountant that contained the balance sheet and the in-
come statement for Bluffton Pharmacy for the fiscal year
from Frank White, the previous owner and founder, who had that has just ended. The two financial statements appear
started the pharmacy in 1969. The two have spent many long below.
Bluffton Pharmacy
Balance Sheet, December 31, 20XX
Assets
Current Assets
Cash $ 74,473
Accounts Receivable $112,730
Inventory $224,870
Supplies $ 21,577
Other Assets $ 10,202
Total Current Assets $443,851
Fixed Assets
Autos, net $ 33,156
Equipment, net $ 35,706
Furniture and Fixtures, net $ 16,323
Total Fixed Assets $ 85,185
Total Assets $529,036
Liabilities
Current Liabilities
Accounts Payable $ 29,585
Notes Payable $ 70,902
Line of Credit Payable $ 32,136
Total Current Liabilities $132,623
Long-term Liabilities
Note Payable $170,880
Loan $ 93,346
Total Long-term Liabilities $264,226
Owner’s Equity
Crawford and Rodriguez, Capital $132,187
Total Liabilities and Owner’s Equity $529,036
803

Bluffton Pharmacy
Income Statement December 31, 20XX
Prescription Sales Revenue $2,228,767

All Other Sales Revenue $ 167,757
Total Sales $2,396,524
Cost of Goods Sold

Beginning Inventory, 1/1/xx $ 169,578
+ Purchases $1,938,097
Goods Available for Sale $2,107,675
- Ending Inventory, 12/31/xx $ 224,870
Cost of Goods Sold $1,882,805
Gross Profit $ 513,719

Operating Expenses
Utilities $ 10,305
Rent $ 35,948
Advertising $ 9,586
Insurance $ 9,586
Depreciation $ 5,033
Salaries and Benefits $ 321,134
Computer and E-commerce $ 11,983
Repairs and Maintenance $ 28,758
Travel $ 4,793
Professional Fees $ 3,595
Supplies $ 5,991
Total Operating Expenses $ 446,712
Other Expenses
Interest Expense $ 24,879
Miscellaneous Expense $ 374
Total Other Expenses $25,253
Total Expenses $ 471,965
Net Income $ 41,754
To see how their pharmacy’s financial position has the typical small pharmacy in the industry. The table below
changed since their first full year of operation, Crawford shows the value of each of the twelve ratios from last year
and Rodriguez want to calculate 12 financial ratios. They and the industry median for small pharmacies.
also want to compare Bluffton Pharmacy’s ratios to those of
804

Ratio Comparison
Bluffton Pharmacy Pharmacy
Ratio Current Year Last Year Industry Median*
Liquidity Ratios
Current ratio 3.41 4.71
Quick ratio 1.72 2.42
Leverage Ratios
Debt ratio 0.70 0.62
Debt-to-Net-Worth ratio 2.23 2.1
Times Interest earned ratio 3.04 3.9
Operating Ratios
Average Inventory Turnover ratio 10.90 11.7 times/year
Average Collection Period ratio 14.0 15.0 days
Average Payable Period ratio 5.0 14.0 days
Net Sales to Total Assets ratio 4.75 4.68
Profitability Ratios
Net Profit on Sales ratio 1.94% 2.9%
Net Profit to Assets ratio 9.20% 8.2%
Net Profit to Equity ratio 29.21% 48.0%
*from Risk Management Association Annual Statement Studies and National Community Pharmacists Association
“Let’s see how our ratios compare to last year’s num- What factors are most likely to account for these
bers,” says Angela. changes?
“I hope we’re headed in the right direction,” says Martin. 3. How do the ratios you calculated for this year compare
“There’s only one way to find out,” says Angela with a to those of the typical company in the industry?
slight hint of tension in her voice. Do you spot any areas that could cause the company
problems in the future? Explain.
Questions 4. Develop a set of specific recommendations for improv-
1. Calculate the 12 ratios for Bluffton Pharmacy for ing the financial performance of Bluffton Pharmacy,
this year. using the analysis you conducted in questions 1–3.
2. How do the ratios you calculated for this year
compare to those for the pharmacy last year?
805

Case 7
Bluffton Pharmacy, Part 2

How should the owners of a small of goods sold is 77.4 percent, and vendors grant “net 30”
pharmacy create a cash flow forecast credit terms, which means the pharmacy pays for the goods
it purchases every month in the following month. Crawford
for their business?
and Rodriguez have been working with their accountant to
I t has been a little more than two years since Angela Craw-
ford and Martin Rodriguez purchased the Bluffton Pharmacy
develop estimates for their expenses for the upcoming year
(see the accompanying table on page 807).
Actual sales for the last two months, November and
from Frank White, the previous owner and founder, who had December, were $272,357 and $315,458. The company’s
started the pharmacy in 1969. Although Crawford and Ro- cash balance as of January 1 is $74,473. The interest rate
driguez have prepared budgets for Bluffton Pharmacy and on Bluffton Pharmacy’s current line of credit is 8.25%, and
have analyzed their financial statements using ratio analysis, whatever the pharmacy borrows must be repaid the follow-
they have not created a cash flow forecast. During a recent ing month (with interest), even if it must borrow again in that
meeting, their banker explained the importance of reliable month. The entrepreneurs have established a minimum cash
cash flow forecasts, telling them that banks traditionally balance of $15,000.
are “cash flow lenders.” Bankers appreciate strong balance
sheets and income statements, but they are most interested in
a company’s cash flow because they know that positive cash Questions
flow is required to repay a loan. 1. Develop a monthly cash budget for Bluffton Pharmacy
Crawford and Rodriguez expect sales to increase for the upcoming year.
4.5 percent next year, to $2,504,368. Credit sales account 2. What recommendations can you offer Angela Crawford
for 79 percent of total sales, and the company’s collection and Martin Rodriguez to improve their pharmacy’s
pattern for credit sales is 11 percent in the same month in cash flow?
which the sale is generated, 63.5 percent in the first month 3. If you were Bluffton Pharmacy’s banker, would you be
after the sale is generated, and 22 percent in the second comfortable extending a line of credit to the pharmacy?
month after the sale is generated. The pharmacy’s cost Explain.
806

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Case 2

Bark & Co.

A fter Matt Meeker, Henrik Werdelin, and Carly Strife

Z03_SCAR6022_09_GE_CS2.indd 797 06/07/18 5:39 PM

Z03_SCAR6022_09_GE_CS2.indd 798 06/07/18 5:39 PM

Cousins Maine Lobster

S ome of the fondest memories that cousins Jim Tselikis

Z04_SCAR6022_09_GE_CS3.indd 799 06/07/18 5:38 PM

Z04_SCAR6022_09_GE_CS3.indd 800 06/07/18 5:38 PM

was raising $400,000 annually to support ThinkImpact; un-

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Intertech Construction Corporation

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Z07_SCAR6022_09_GE_CS6.indd 803 06/07/18 5:36 PM

Prescription Sales Revenue $2,228,767

Cost of Goods Sold

Gross Profit $ 513,719

Total Expenses $ 471,965

Net Income $ 41,754

Z07_SCAR6022_09_GE_CS6.indd 804 06/07/18 5:36 PM

compare to those for the pharmacy last year?

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Bluffton Pharmacy, Part 2

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