Your group has been hired by BluJay Aviation as business consultants. BluJay Avi
ID: 2459202 • Letter: Y
Question
Your group has been hired by BluJay Aviation as business consultants. BluJay Aviation, Inc., has been in business for three years. The business has been profitable enough that Wren no longer works for the airport. She is now both an owner and employee of BluJay Aviation. Brad is still at the FBO, but also does some work for BluJay. An opportunity has arisen at the airport. The gift shop is available for lease. Wren and Brad have been thinking about taking over the operation of the shop in addition to running BluJay Aviation. Discuss this concept with your group, along with the advantages and disadvantages of running a retail operation in addition to their normal business. Financial statements for the most recent years of operation of the gift shop are supplied. Your business consulting group has received a second request for advice from BluJay Aviation, Inc. BluJay Aviation has allowed their clients to pay 30-60 days after services have been given. This causes their cash flow from operating activities to often be negative even though they are earning a profit. The economy has also made them nervous about collecting since a few businesses that use their services, especially the realtors, may not stay in business. Discuss with your group the various options available to BluJay in this situation. Choose two options they might try to improve their cash flow and also advise them about the valuation of their accounts receivable. Draw up a rough draft of what you are going to put in the final letter/report to BluJay for Episode 7. Remember, the best writing is done, edited, and redone. HNK Co. Income StatementsPreview the documentView in a new window Come to a conclusion about what they should do stating the reasons for your group decision. Draw up a rough draft of what you are going to put in the final letter/report to BluJay for Episode 6. Remember, the best writing is done, edited, and redone.
Explanation / Answer
Advantages and disadvantages of running a retail operation :
1) Holiday Sales will be high
2) Get assistance from trade unions
3) Can sold out travel related items and cool drinks gives more sales
Disadvantage:
1)It is additional business so don't spent huge investment on this.
2) Lack in control of management leads to failure in both (additional and normal)
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30-60 days for additionl business is high days reduce up to 10 to 15 days.
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cash flow increase, it means involved more with investing financing and investing activities.
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Final letter report to BluJay
From :Business consultants
To :BluJay
This is inital stage of additional business, but put high concentrate on normal business then start the additional business after some period of time, don't spend too much of money for retail because it get affect main business, do involve more in financing and investing operating to increase the cash inflow.
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