Habitual Chocolate: Expansion Opportunities
(9 pages of text)
The owner and chocolatier of a small, chocolate manufacturing and retailing company in London, Ontario, was considering an expansion opportunity within Southwestern Ontario. The company's current production facility was sufficient for handling immediate demand; however, there was limited space for expansion in the same building, and the building’s administration had plans to prohibit manufacturing activities within the next five to 10 years. The owner wondered whether the time was right to purchase a new storefront and production facility in a small nearby city. Alternatively, should he continue operations in the present location while looking for other opportunities to expand? He planned to create projected financial statements and conduct internal and external analyses to inform his decision-making process.
This case is best suited for an introductory managerial accounting or finance course at the undergraduate level. For correct analysis of this case, students should have a solid understanding of basic business analysis tools and the ability to apply them. This case can also be used as a testing vehicle. After completion of the case, students will be able to do the following:
- Draw implications from historical qualitative facts relevant to the decisions at hand.
- Understand the mechanics needed to build a statement of cash flows, differential cash flow, and projected statements.
- Choose the most suitable future-oriented solution (of the multiple options provided) based on analysis of the case.
Accommodation & Food Services
Canada, Small, 2014
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