Boston Chicken Inc Case Solution

Case Solution

This case views Boston Chicken's franchise method of growing its innovative restaurant business, along with the connected accounting verifying problems that arise.

Excel Calculations

Consolidated Statements of Operations (Exhibit page 12) 1995

Consolidated Balance Sheet 1995

Consolidated Statements of Cash Flows (In thousands) 1995

Questions Covered

1. Assume Boston Chicken’s growth for next year is exactly the same as this year, but that no new financing is raised. build and Present the Income Statement, Balance Sheet and Statement of Cash Flows for at the end of next year. 

2. As Boston Chicken’s CEO, do you believe Boston Chicken is doing a good or excellent job of accurately reporting its performance and risks to investors?

3. Is your primary duty as CEO to existing shareholders or investors who might be considering buying stock? How might this change your view of its financial reporting?

4. What are Boston Chicken’s Key Success Factors? Make sure you stand in the customer’s shoes and revisit the Cash and Valuation Framework.

5. How well is Boston Chicken performing financially? Are the franchises moderately or extraordinarily profitable?