MINICASE: The Nom-Nom Cake Company
Danh and Linh Nguyen formed the Nom-Nom Cake Company in Los Angeles, CA in 2013. Their company produced a variety of specialty cakes. While getting their new company off the ground, Danh and Linh continued to work at their primary jobs. Linh handled marketing and distribution while Danh performed all of the baking. The company grew rapidly and was featured three years later on a popular cooking show, followed by interviews in trendy magazines. Sales really took off after that, and the company began receiving orders from all across the United States and also from overseas customers.
Thanks to this explosive sales growth, Danh and Linh left their "regular" jobs behind and began producing specialty cakes full time. They also hired additional workers to help them keep up with orders. However, the influx of orders has created more demand than they can manage with their current capacity. They are producing as many cakes as they can, but demand for their cakes continues to grow, and they are becoming swamped by larger and increased numbers of orders. A national supermarket chain and a famous restaurant recently contacted Nom-Nom Cake Company about selling their cakes in the supermarkets and featuring them in restaurants all across America.
Danh and Linh have operated the company as a sole proprietorship thus far. Assume they have approached you as a consultant to help manage and direct the company's future growth. Specifically, they have asked you to advise them on the following questions:
- What are the advantages and disadvantages of changing the company organization from a sole proprietorship to an LLC?
- What are the advantages and disadvantages of changing the company organization from a sole proprietorship to a corporation?
- Ultimately, what action(s) do you recommend Danh and Linh take regarding the company and
i need 300 words and Properly document your sources using APA style in-text references and a reference list.
then a second document on words (Answer All Questions; Submit as One Essay)
1. AGENCY PROBLEMS
Who owns a corporation? Describe the process whereby the owners control the firm’s management. Describe the main reason why an agency relationship exists in the corporate form of organization. In this context, describe the types of problems that can arise.
2. ENTERPRISE VALUE
A firm’s enterprise value is equal to the market value of its debt and equity, less the firm’s holdings of cash and cash equivalents. This figure is particularly of interest to potential purchasers of the firm. Why?
3. CURRENT RATIO
Explain what it means for a firm to have a current ratio of .50. Would the firm be better off with a current ratio of 1.50? What if it were 15.0? Explain your answers.
4. PEER GROUP ANALYSIS
As a financial manager, how might you use the results of peer group analysis to evaluate the performance of your firm? How is a peer group different from an aspirant group?
Please number each of your answers. This is very important so that I understand which questions you are responding to.
Post essay to the link below as a single MS Word attachment by Sunday at 11:59 PM eastern Time
Assignment Grading Criteria:
Thoroughly answered all of the questions: 60 points possible
Spelling/Grammar at the college level: 20 points possible
References to course material with proper APA format: 20 points possible
Total: 100 points
Required Textbook
Essentials of Corporate Finance
ISBN: 9781264786169
Authors: Ross, Westerfield & Jordan
Publisher: McGraw Hill
Publication Date: 2025
