Chapter 2 - Business Transaction Analysis and Financial Statement Effects

Tim Hortons opens coffee and doughnut shop at military base near Fort Knox

Summary:

With the position of King of Canada’s coffee and doughnut industry, Tim Hortons Incorporated is setting up a shop near Fort Knox, which is home to the U.S. government’s main gold storehouse. “The new 24 hours Tim Hortons shop in Kentucky will be its first on the grounds of a U.S. military facility”, states Tim Hortons CEO’s. As a strategic and operation activity, Tim Horton’s is growing its presence aggressively in these types of locations, opening several locations in New York City last summer. As another location operating near popular tourist destinations, Tim Hortons is taking advantages of these tourist “hotspots” and earning much more revenue by investing and opening new locations throughout the states.

Operating Activities:

In order to make wise decisions and generate more income, companies and accountants must analyze the economic substance of the transactions in order to decide what accounts are affect and by how much. This is called transaction analysis. With this information, companies can make wise decisions and invest with confidence in new projects and buildings, for example. Expanding the franchise of Tim Hortons coffee and doughnuts by locating them near the states and tourist hotspots is a wise choice because it will spread the relations with the world and our neighbor, the states. The Ontario based company has about 500 stores in the United States and about 3,500 locations in total, most of them in Canada.

Reflection:

As an occasional customer of Tim Hortons, I believe that the company should definitely evolve and open up new locations to introduce their franchise to other people. As Tim Hortons is still growing in the states, for example, their decision to open locations in tourist hotspots is a good move because people from around the world will be able to try out their doughnuts and coffee. With decision making, analyzing transaction records and company books is a must in order to make accurate and successful choices. I notice a trend as other companies, such as Walmart and Krispy Kreme, are originating from the United States and growing into Canada.