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Fair Trade Community Café

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  • KAREN LIGHTSTONE

Abstract

This case concerns the real operations of a café in a small town in Nova Scotia, Canada. It is a second location of a theme restaurant, with the first location successfully operating for a number of years. The owner of the first location, and senior partner of the second café, is available for advice but does not participate in the day‐to‐day operations of the second location; there are two junior partners who run the business. The focus is on the financial statements generated by an external bookkeeping service. The income statement reports a significant loss, and some of the accounts on the balance sheet and income statement do not make sense for this type of business. Simple ratio and variance analysis provides information for students to determine where problems lie. The case presents a good opportunity for students who have a basic understanding of financial statements to read a set of real statements generated by a bookkeeping service. Not all transactions are logical for a small café, although the financial information is from a real café in operation. The case also contains industry information on the operations of small food and drinking businesses located in Nova Scotia. Fair Trade Community Café Résumé Le cas exposé par l’auteure a trait à l’exploitation d’un véritable café situé dans une petite ville de Nouvelle‐Écosse, au Canada. Il s’agit du second établissement d’un restaurant à thème dont le premier établissement exerce ses activités avec succès depuis plusieurs années. Le propriétaire du premier établissement, et associé majoritaire du second, est disposéà prodiguer des conseils mais ne participe pas à l’exploitation quotidienne du second café, que dirigent deux associés minoritaires. Le cas porte sur les états financiers produits par un service externe de tenue des comptes. Le compte de résultat fait état d’une perte importante, et certains des comptes du bilan et des postes du compte de résultat ne conviennent pas à ce type d’entreprise. Une simple analyse des ratios et des écarts fournit de l’information permettant aux étudiants de diagnostiquer les problèmes qui se posent. Le cas offre aux étudiants possédant une connaissance de base de la façon dont les états financiers sont établis une excellente occasion de lire un jeu d’états financiers véritables, produits par un service de tenue des comptes. Toutes les opérations ne sont pas logiquement celles d’un petit café, bien que les données financières proviennent d’un établissement authentique. Le cas contient également des informations sectorielles sur les activités de petites entreprises du secteur de l’alimentation établies en Nouvelle‐Écosse.

Suggested Citation

  • Karen Lightstone, 2010. "Fair Trade Community Café," Accounting Perspectives, John Wiley & Sons, vol. 9(2), pages 157-167, June.
  • Handle: RePEc:wly:accper:v:9:y:2010:i:2:p:157-167
    DOI: 10.1111/j.1911-3838.2010.00009.x
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