(answered) – Analytical review Golden Big Burgers Part I: Background Golden

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(answered) – Analytical review Golden Big Burgers Part I: Background GoldenDescriptionSolution downloadThe QuestionI need help with my assignment for accounting. It is to do with report analysis and testing. ?Excel is required for this task.Analytical reviewGolden Big BurgersPart I:BackgroundGolden Big Burgers (GB) is a hamburger food chain with 20 locations operating solely in the US. The menuofferings and store operations are largely patterned after McDonald?s (MCD). GB was formed in 2005 andwent public in 2009. GB?s common shares are publicly traded under the ticker symbol GB and it has aDecember 31 year-end.All GB restaurants are based on a single-building model and have approximately the same square footage.Stores 1 through 4 are located in shopping centers near college campuses and are open 18 hours a day.Stores 5 through 20 are located on college campuses and are open 24 hours a day.GB has been a client of Best Audit Firm since it went public. Management is very control conscious andmaintains a strong internal control environment. GB has received an unqualified opinion every year on itsfinancial statements since its first audit in 2005.Assume that you are the audit senior. During a meeting with the controller to discuss operating results forthe year, the controller provides you with the following summary of key financial information:Amounts in thousands201220112010Sales$25,780$23,409$22,116Less operating expenses$20,473$18,462$18,163Operating margin$ 5,307$ 4,947$ 3,953Operating margin percentage20.6%21.1%17.9%The controller informs you that, on an aggregated basis, GB had a very good year despite the contraction ofthe informal, eating-out segment of the US population brought on by the recession. The recession caused asoftening of GB?s sales growth in early 2012. However, GB reacted quickly and reduced its prices, whichresulted in improved sales. Overall sales increased 10.1% in 2012. Additionally, operating margins were20.6% in 2012 versus 21.1% in 2011. This slight decline in operating margins in 2012 was due to reducedpricing, but was partially offset by increased customer (guest) counts of 6.9%.Analytical review ? case study part I? 2013 Ernst & Young Foundation (US). All Rights Reserved.SCORE No. MM4155I11The controller previously provided the audit team with disaggregated information by store for 2010, 2011and 2012 that includes sales, expenses, operating margins and customer count by store. One of the auditstaff performed limited testing on this information (see working paper A0 Financial and nonfinancial).After reviewing this information, you ask the controller whether there were any significant events or changesin the stores of which you should be aware. The controller informs you of the following:? Store No. 2 was converted to a 24-hour store midyear.? Store No. 15 had a fire the first week of January and was closed for two and a half months. This storewas completely remodeled before it reopened; however, management did not expect that the remodelwould have a notable impact on sales.? Stores No. 19 and No. 20 were opened on May 1, 2012 and September 1, 2012, respectively.? The chief operating officer retired in March 2012 and no successor has been identified.The controller also shares with you the following insights:? The retail industry utilizes comparable sales and comparable customer counts as key performanceindicators. Internally, management tracks GB?s results against MCD?s US operations.? Because of GB?s appeal to college students, its sales have grown approximately 1% faster than MCD?ssales.? Operating margins have been approximately 0.5% better than MCD?s operating margins. This is largelydue to GB?s lower compensation structure, since

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