Comparing Better Brew and Perfect Blend Coffee Companies After years of dreaming of owning a business, you decided that owning a coffee shop would be perfect. Instead of starting from scratch, however, you and your partners decide to look at two existing establishments, Better Brew and Perfect Blend. The two are for sale at the same price and are located in equally attractive areas. Are you able to obtain enough financial data to compare the year-end conditions of the two companies. What factors should you consider before deciding which company to buy? What additional data might be useful to you? (Not that net income is implied). We have year-end financial statements which are the financial position statement and snapshot of the company's financial position as of a particular date. The financial statement gives us an indication of how the company is doing and its situation at a particular time. I would like some history on the two companies, such as the age of the company, profitability, liquidity, activity and financial leverage. This information is useful for analyzing the company's performance in relation to previous performance, the economy as a whole, and the company's competition (Bovée, Thill, & Mescon, 2005, p. 421). Other factors to consider include the look of the business, length of ownership, seasonal peaks, reasons for personal pick-ups, owner salaries, supplier information, existing inventory systems, type and age of equipment, leases on equipment and buildings, space available for the business, the possibilities for expansion, the number of employees, the benefits offered to employees and the accounting principles used. Additional data that might be useful includes other financial documents including an income statement to get a general idea of ​​the company's size and performance, as well as the cash flow statement to see how the company's money has been received and spent on operations, investments, and financing (Bovée, et al., 2005). Another factor to consider is information about the industry average or regional competitors. What questions should you ask about the methods used to record revenues and expenses? It is important to know whether business accounting is carried out on a cash basis or on an accrual basis. In the cash-basis method, revenue is recognized when cash is received and expense is recognized when cash is paid.