Assume the role of Marcus/Mary Carter. In a business memo, answer the following questions, directing your responses to Mr. and Mrs. Kim. Keep your answers succinct. Your memo should be approximately two to three pages (including tables), single-spaced. 1. Given Mr. and Mrs. Kim’s level of financial sophistication, provide an explanation to them regarding Mrs. Kim’s original statement. Are they really 34% ahead of the industry average? Why or why not? Make sure to focus on your audience. This memo should be directed to Mr. and Mrs. Kim to help them understand the situation. 2. Compare their financials to the industry averages (Exhibit 2) and provide an analysis of the Larkin Motel (based on industry averages or other information). Be specific and provide support. If you need to make assumptions, do so, but make sure to include them in your explanation. 3. What recommendations do you have for the Larkin Motel? 4. What additional information, if any, would be helpful in order to make more specific conclusions? Why? Case Tips: • You may analyze this case in any way you like. Ratio analysis may provide additional insight beyond a simple comparison to industry averages. You will need to decide which ratios may provide the most helpful information. • There are several different ways to categorize expenses or to analyze the data. Regardless of how you approach it, make sure to have a reason for your approach. • Make sure to include a discussion around depreciation in your memo (i.e. provide an explanation to Mr. and Mrs. Kim about how this non-cash item impacts their organization, even if they do not see its impact in their bank account). • Make sure to analyze the comparison data itself. Does it make sense to use all of it for comparison with the Larkin Motel? Should portions of it be removed or ignored? Make sure to provide explanations for any conclusions.