Project Homework
Overview:
The purpose of the group course project is to report on a possible new business venture and to use your managerial accounting thought to provide evidence/support for your decision.
In groups of 3 to 4 peers, develop an idea for a new business venture. The business venture should be realistic and of interest to the group. To provide support for the development of the new business idea, your group will assess the business environment, provide an evaluation of the product's cost strategy. Your group presents a financial performance overview for the first 3 years of operation, and evaluate the profitability of this investment.
Project Objectives:
1) Perform an external analysis of the industry, competition, and potential consumers.
2) Analyze the strengths, weaknesses, opportunities, and threats (SWOT analysis) of the proposed business venture.
3) Develop and present a unit price and cost analysis on product offerings.
4) Budget three years of financial statements, including 1st year monthly cash budget, 3-year income statement, and balance sheet.
The Specific Requirements:
I. Perform an industry size-up. What are the strengths, weaknesses, threats, and opportunities of your business venture compared to the competition in the industry? (Use SWOT analysis).
II. Prepare a per unit Product Cost Analysis, identifying variable and fixed costs, using Contribution Margin. Discuss the cost method chosen for your business.
III. Prepare three years of projected income statements and balance sheets, and a monthly cash budget for year 1. The projections need to be reasonable.
IV. Include discussion of these specific managerial concepts in your final paper as they relate to your business venture:
a. Cost Classifications (fixed vs. variable, product or period)
b. Contribution Margin
c. Cost of Goods Manufactured
d. Financial Ratio Analysis (Activity, Liquidity, Solvency, and Profitability)
e. Performance Measurement using Return of Investment and Residual Income
V. Would you launch the new business venture based on the analysis performed? Why or why not? Support your final recommendation.
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.