Question

An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef and many long-term kitchen and wait staff who work together smoothly to make innovative new dishes. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. What should the investor consider when making a decision?

Answer 1

Answer: The investor will find that the restaurant's financial statements will undervalue the true value of its resources.

Explanation:

A Financial statements is a formal record of all financial activities that shows the position of a business, person, or other entity’s. Important financial information are presented in a structured manner and in a away it can be easily understood. This financial statement helps one value the true worth of a business, individual or entity’s.

Answer 2

The investor will find that the restaurant's financial statements undervalue the true value of its resources.

Step-by-step explanation:

It is said here that the investor will find the financial statements undervalue the true value of its resources. In as much as the quality of the chefs, staffs and standard of the restaurant, all were put into consideration.

It is also known that financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.

Financial statements are written records that convey the business activities and the financial performance of a company.

The balance sheet provides an overview of assets, liabilities, and stockholders' equity as a snapshot in time.