Dayana has launched a restaurant in Queens, and it's so successful she's wondering if she has enough free cash flow to open a second location. A prospective investor wants to partner with her, so Dayana is paying special attention a financial model she asked her financial advisor to prepare. Since she studied accounting is school, she begins to spot several things that she's not sure about.
She's reviewing the financials and notices that equipment is listed as a current asset. Is this correct, she wonders?
A/P is listed under PPE. Is this correct, she wonders?
Then, she finds that revenues and costs of goods sold have been added together to get gross margin. This doesn't seem correct. Is it?