Château Lafayette: Food for Thought

內容大綱
In December 2023, Ryan Mitchell, account manager at Prosperity Bank, was reviewing a request for an $80,000 long-term loan for the Château Lafayette (“The Laff”), the oldest tavern in Ottawa, Ontario. Jill Scott, president and CEO of The Laff, was seeking the funds to finance three investments that she believed would help the tavern increase its revenue from food sales during lunch hour: a kitchen update, a patio renovation, and point-of-sale (POS) software.<br><br>Mitchell knew The Laff had demonstrated strong financial performance and cash management historically, but she had reservations about this new strategic shift toward food sales and understood that the restaurant and bar industry was subject to significant risks.
學習目標
This case is recommended for use in the finance and accounting module of an introductory business course at the undergraduate level. Students should have a basic understanding of financial lending; therefore, the case is best used at the end of a unit or as a testing point.The case will challenge students to:<ul><li>Analyze historical financial statements and financial ratios to understand the health and creditworthiness of a business.</li><li>Project future financial statements and working capital requirements in multiple scenarios (sensitivity and seasonality).</li><li>Consider the qualitative factors impacting the lending decision.</li><li>Discuss long-term brand strategy and capital structure decisions.</li></ul>
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