Coffee Shop

ProHub Comment

This case requires candidates to synthesize operational data from multiple menu items and customer flow patterns to calculate annual profitability, then determine 5-year ROI. The case tests financial modeling skills, attention to detail in calculations, and the ability to contextualize findings through advanced insights such as climate risk and location advantages.

Estimated Time 15 minutes
Difficulty Hard
Source PeterK
50 / 100
Your friend runs a nice coffee shop in Palisades, the largest ski resort in Tahoe. Situated in a prime location, her coffee shop is a great success. She has approached you with an offer to sell her business for $200k. What would the 5-year ROI of this investment be?

Clarifying Information

  1. Exhibit 1. Operational and Financial Metrics of the Coffee Shop, 2021
  2. The ski season lasts for around 6 months a year
  3. Consider 360 days per year
  4. The variable costs are 70% of revenue
  5. The primary fixed cost is rent. It’s $5,000 per month round the year
  6. The coffee shop is open only during the ski season. The working hours are from 7 am to 4 pm seven days a week