Managerial Analysis for Green Pastures

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Scenario: Green Pastures is a 400-acre farm on the outskirts of the Kentucky Bluegrass, specializing in the boarding of broodmares and their foals. A recent economic downturn in the thoroughbred industry has led to a decline in breeding activities, and it has made the boarding business extremely competitive. To meet the competition, Green Pastures planned in 2017 to entertain clients, advertise more extensively, and absorb expenses formerly paid by clients such as veterinary and blacksmith fees.

The budget report for 2017 is presented as an attachment. As shown, the static income statement budget for the year is based on an expected 21,900 boarding days at $25 per mare. The variable expenses per mare per day were budgeted: feed $5, veterinary fees $3, blacksmith fees $0.25, and supplies $0.55. All other budgeted expenses were either semifixed or fixed.

During the year, management decided not to replace a worker who quit in March, but it did issue a new advertising brochure and did more entertaining of clients.

Develop a 1000-word (100 to 120 word count per bullet) examination of the financial statements and include the following based on the static budget report: (see attached)

  • What was the primary cause(s) of the loss in net income? (100 to 120 word count)
  • Did management do a good, average, or poor job of controlling expenses? (100 to 120 word count)
  • Were management’s decisions to stay competitive sound? (100 to 120 word count)
  • Prepare a flexible budget report for the year. (100 to 120 word count)
  • Based on the flexible budget report: (100 to 120 word count)
  • What was the primary cause(s) of the loss in net income? (100 to 120 word count)
  • Did management do a good, average, or poor job of controlling expenses? (100 to 120 word count)
  • Were management’s decisions to stay competitive sound? (100 to 120 word count)
  • What course of action do you recommend for the management of Green Pastures? (100 to 120 word count)

Please make sure to follow APA guidelines and include an introduction, conclusion, and reference page. Introduction, conclusion and reference page not to be part of the word count.