Restaurant Performance Analysis & Financial Tools

This assignment examines the performance of 'Food for Friend' restaurant using various data collection techniques from primary and secondary sources. The analysis employs column graphs and pie charts to illustrate kitchen and restaurant performance trends over time. Additionally, the report explores financial tools like Net Present Value (NPV) and Internal Rate of Return (IRR) to evaluate investment decisions and profitability. The conclusion summarizes key findings regarding business decision-making in the restaurant industry.

BUSINESS DECISION
MAKING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 ..........................................................................................................................................1
1.2 ..........................................................................................................................................2
1.3 ..........................................................................................................................................2
2.1 ..........................................................................................................................................4
2.2 ..........................................................................................................................................6
2.3...........................................................................................................................................7
2.4 ..........................................................................................................................................8
TASK 2............................................................................................................................................9
3.1 ..........................................................................................................................................9
3.2 ........................................................................................................................................11
3.3 Covered in PPT...............................................................................................................12
3.4 ........................................................................................................................................12
TASK3...........................................................................................................................................13
4.1 ........................................................................................................................................13
4.2.........................................................................................................................................14
4.2 ........................................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
In every business, decision making is one of the most important aspects that should be
taken into considerations in order to make business successful. Decision making help to create a
complete pictures of a company (Ariely and Berns, 2010). Different methods of data collection is
required to make appropriate decision regarding establishment of company in long run. It help to
take various decision about Food for Friend restaurant in order to achieve the target set by
company. The report consist of various sources of data collection and appropriate methods that
are used in restaurant. On that basis different decision have made in order to provide valuable
information about the strategies and decision making techniques that they should adopt by Food
for friend restaurant. It also includes a well planned report that contains findings from research
work. In last a network digram is presented on the basis of assumption and financial tools that
are helpful in decision making for restaurant.
TASK 1
1.1
A Plan is a kind of detailed proposal for performing a task or activity and decision about
what person is going to do. So there are various sources that are available to Food for Friend
restaurant which can be used in their daily course of business. For the collection of data mainly
there are two sources primary and secondary which is based on various aspects of market
situation and customer demand. The data collection is a huge task for researcher because
responded are not truly confident in providing information in appropriate way.
Data collection plan:
It is techniques that can be used in searching or analysing information of different
variables that create interest in formulating people thinking ability. A research have many option
that will be use like asking questions, testing hypotheses and review the final results out of
survey process (Casadesus-Masanell and Ricart, 2011). Mode of collection can be interviews,
phone calls, direct observations and others. For this primary and secondary source are used.
Firstly primary data is much more helpful because it is collected for first time from respondents
and it provide chance to correct the mistakes and quickly resolved by using proper methods and
tool. It includes questionnaire, interviews and personal observation.
1

Secondly, secondary data is past data that are already available with Food for Friend in the form
of pictures, numerical, and graphs. This source of collection is only required to make comparison
of present and past data and position of business (Chang, Van Witteloostuijn and Eden, 2010).
1.2
The procedure used to gather information and data for the design of decision making. The
research methodologies include published research, interviews, surveys and other various
research tool that are base d on current and historical information. The aim of research should be
clear and purpose of studies must be concisely defined. It should be done in a manner that
outcomes are beneficial and profitable for Food for Friend restaurant. By conduction interaction
session, taking interviews and filling questionnaires from different people.
Research could be done at local, individual and group level. As it is more time
consuming because survey can no be done in one single day. The rationality of study should be
used in proper way because to reduce literature gap that are arise in restaurant industry. It is
mostly conducted to improve performance through providing better customer services. Different
ways are there which is use information collected from Food for Friend restaurant. Each and
every data must be collected and analysed through qualitative and quantitative term.
Sampling framework is a process in which data is collected from total number of
population. And out of that random sample is used that would help to identify those customers
who are visiting to Food for friend restaurant (Gigerenzer and Gaissmaier, 2011). Those sample
are being asked about their experiences about restaurant and its services qualities. It is done to
reduce biasses in research with the set target.
The basis of decision making in Food for Friends are as follows:
 Cuisine's variety
 Price
 Quality
 Feedback and suggestions
1.3
Questionnaires
Food for Friends in London
Personal Details
Gender: Male () Female ()
2

Age: Below 25() 25-30() 30-40()
Occupation: Business() Student() Professional() Housewife()
Q.1 Have you ever visited food for friend restaurant?
a) Yes
b) No
Q.2 How you came to know about it?
a) Online b) Friends c)Newspaper
Q.3 What you like the most in food for friend?
a) Services
b) Food
c) Ambience
d) Other(Specify)
Q4. Did you found the price of cuisine affordable?
a) Yes
b) No
Q.5 How would you rate the services provided?
a. Good
b. Average
c. Below average
Q.6 Are you satisfied with the quality of food provided by food for friend?
a) Satisfied
b) Not satisfied
Q.7 How often you use online booking service?
a) Always
b) Rarely
c) Never
Q.8 Do you have knowledge about traditional culture specific food of cities?
a) Yes b) No
If yes please specify......................................................
Q.9 How satisfied with the whole experience that you gain after visiting food for friend?
Totally dissatisfied Dissatisfied Neutral
3

Satisfied mostly satisfied
Q.10 Would you like to recommend sometime to Food for Friend restaurant?
Ans..............................................................................................
…................................................................................................
…................................................................................................
Q.11 Feel joyful to provide additional suggestion or feedback?
Ans...............................................................................................
…..................................................................................................
…....................................................................................................
….....................................................................................................
2.1
From above mentioned questionnaire that are asked from various responded those are
visiting at food for friends restaurant (Ho, Xu and Dey, 2010). It is based on research
methodology that following data have been summaries as per their percentages of answer. It will
help the owner of the restaurant in improvising performance and to take certain decision
regarding their business plan.
Total number of respondent: 125
Age group: From 18 to 45
Gender: Male(65%) Female(35%)
Nationality: People from outside country like, India, china, japan, Australia etc.
Religion: Hinduism, Christian and Muslims
Q.1 Have you ever visited food for friend restaurant?
a) Yes (80%)
b) No (20%)
Q.2 How you came to know about it?
a) Online(30%) b) Friends(25%) c)Newspaper(45%)
Q.3 What you like the most in food for friend?
a) Services (25%)
b) Food (35%)
c) Ambience (30%)
d) Other(Specify) (10%)
4

Q4. Did you found the price of cuisine affordable?
a) Yes (67%) b) No(33%)
Q.5 How would you rate the services provided?
a. 5 (4)
b. 4 (3)
c. 3 (2)
d. 2 (2)
e. 1 (0)
Q.6 Are you satisfied with the quality of food provided by food for friend?
a) Satisfied (75%) b) Not satisfied(25%)
Q.7 How often you use online booking service?
a) Always (65%)
b) Rarely (20%)
c) Never (15%)
Q.8 Do you have knowledge about traditional culture specific food of cities?
a) Yes (78%) b) No (22%)
If yes please specify: Eton mess, Sunday Roast with Yorkshire pudding.
Q.9 How satisfied with the whole experience that you gain after visiting food for friend?
Totally dissatisfied (2%) Dissatisfied (10%) Neutral(25%)
Satisfied (20%) Most satisfied(43%)
Q.10 Would you like to recommend something to Food for Friend restaurant?
Ans. Some of Indian visitors demanded that Indian variety of food should also be included in the
cuisine.
According to specific festival or event particular segment of area should be provided.
Q.11 Feel joyful to provide additional suggestion or feedback?
Ans...............................................................................................
…..................................................................................................
2.2
5

Year Sales Net Profit
2006 1200 500
2007 1500 600
2008 1750 750
2009 1825 780
2010 1900 500
2011 1850 675
2012 1875 700
2013 1800 850
2014 1950 920
2015 2000 1020
17650 7295
Particular Formula For sales For profit
Median(In case of
even number values) {L1 + (N/2) – c/F}*i]
1837.5 725
Mean ∑X/N 17650/10=17
65
7295/10=729.
5
Mode L + h ( fm – f1 / 2fm – f1 - f2 ) 1500 600
Mean:
The arithmetic mean of a data set is the total amount of values divided by the total
number of observations (Kahneman, Lovallo and Sibony, 2011). From the above information the
mean value collected from sales and net profits are 1765 and 729.5 respectively.
Median:
6

It represent the middle value of data those are recorded or analyse in 50%. it is said to
half set of figures those are out of total sales from number of years. The middle value of sales
1850+1900= 3750. from that median of sales is 1837.5. and half way of net profit is
500+675=1175. in 2010-2011. from that source median is 725. which is middle value of
represent in given numbers (Li, 2010).
Mode:
It refer to most repetitive number or value that is being used in a particular year.
Likewise, in above mentioned data most common figure which is come out is 1500 that is almost
included in most of the year (Muindi, 2011). In case of net profit mode value is 600 which is
again generated in 2010-2011. Both values are derived from sales and net profit incur by the
company.
2.3
Sales
STANDARD DEVIATION =240.7165229984
MINIMUM RANGE =1200
MAXIMUM RANGE =2000
INTER QUARTILE RANGE =800
UPPER QUARTILE =1912.5
LOWER QUARTILE =1687.5
CORRELATION COEFFICIENT =0.6347450807
Net Profit
STANDARD DEVIATION =171.3094989907
MINIMUM RANGE =500
MAXIMUM RANGE =1020
INTER QUARTILE RANGE =520
CORRELATION COEFFICIENT= 0.6347450807
UPPER QUARTILE =867.5
LOWER QUARTILE =575.
Standard deviation: It refers as that value which represent total risk involve in an
observation of variables. It represent the variation in the collected data. In those situation in
7

which data is very close then, the risk factor is also very small. If the data is in large number than
values of deviation is also to much.
Standard deviation: √∑Fdx2/N – (∑Fdx/N)2
According to the data collected from research are used to analyse by using standard
deviation formula. For both sales and net profit generated by restaurant during so many years are
used to determine the impacts on the business. It risk factors are analyse as with their values
which is 241 for sales and 170 for net profit respectively.
From above table of data available in order to make various strategies which can helpful
for an organisation to get its aims and objectives through making appropriate decision making
that are based on data collected from secondary sources out of n number of population (Nielsen
and Nielsen, 2011). Researchers have so many techniques are available those he can use it in
there research work.
Measure of dispersion:
It said to be statistical set of accumulation of results that are generated in relation to
business portfolio are known as dispersion. It indicate variances that are present among various
customers and other (Smith, Binns and Tushman, 2010). Dispersion is used to measure degree of
uncertainty and risk those are associated with separation of data. To evaluate data there are two
types of measuring dispersion:
Absolute measure of dispersion:
It refers as those measure of dispersion which is explains or expressed in terms of
original units of variable data. Different measures comes under absolute like range, mean,
quartile and standard deviation.
Relative measure of dispersion:
It is said to be as coefficient of dispersion those are obtained from various ratios or
percentages. These are pure numbers and individual units of measurement and taken as
differentiate two or more than two set of data values.
Variances: It is said as the process of calculating the total amount of the causes of
variances present in actual costs and standard costs. It is considered as average of the square of
the total deviation of the observation values out of total mean.
Formula: S2 = ∑(X – X )2 / n-1
8

The variance of sales and net profit from the above given data are square of standard
deviation. For sales is will be 49275 and net profit 29343 respectively.
2.4
Quartile: A quartile is said to be division of data set into four equal parts presented as
1/4th of the set. It includes first quartile, second third and fourth quartile. There food for friends
restaurant are dividing their segment and its variable of work department into group of small
categories. The percentage of each quartile is 25% share of component and the other is 50%
which is allotted to middle quartile and for last 75% is recorded.
Sales Profit
Q1= 25th N/4 = 17650 /4 = 4412 1823.75
Q2= 50th 2(N+1)4= 17650 +1/4=8825.5 3648
Q3 = 75th 3(N+1)4 = 3(17650)+1 /4=
13238
5472
Percentile: It is a kind of method under which different aspect of data is calculated in
terms to number of population. It measure statistics those are indicating values in a given
percentage and observation. It includes that each of 100 groups are categorise into which a
population can be separated as per the distribution of values. It is based on two possible outcome
that must be under percentile range then it should be accepted and if any value goes below to it
will directly rejected by the company.
For 20th percentile = Total number of observation is 17650 for sales
= 17650*20%= 3530 where as. For net profit = 7295*20%= 1459
For 50th percentile = 17650*50% = 8825while, For net profit= 7295 *50%= 3647
Coefficient correlation is said to be statistical measure of data which changes according
to values of one variable change as per other values of variables. A number fall between +1 to -1
indicated interdependency of two variables. If is bring +1 it means the relation is positive and if
it come down to -1 then negative correlation. So the variable data must be come in between +1
9

to -1. In case of food for friend correlation is comes 0.6 which will in between set line for
restaurant.
Year Sales X
Net Profit
Y X-X Y-Y XY
2006 1200 500 -565 -229.5 129667.5
2007 1500 600 -265 -129.5 34317.5
2008 1750 750 -15 20.5 -307.5
2009 1825 780 60 50.5 3030
2010 1900 500 135 -229.5 -30982.5
2011 1850 675 85 -54.5 -4632.5
2012 1875 700 110 -29.5 -3245
2013 1800 850 35 120.5 4217.5
2014 1950 920 185 190.5 35242.5
2015 2000 1020 235 290.5 68267.5
Total 17650 7295 235575
Mean 1765 729.5
R= Covariance (XY) / S.d(X)*Sd(Y)
Cov of XY= (X-X)(Y-Y)/n-1
= 235575/9
=26175
r = 26175/240.71*171.3
= 0.63
TASK 2
3.1
Chain of Restaurants Sales(m) Profit
Loch Fyne 8 7244
Srdada 8.32 4902
10

Zizzi 6 3896
Arby's Kitchen 186.26 72000
Yo Suhshi 20 13712
Wagamama 8 2100
Zizzi 6 3896
Loch Fyne
Srdada
Zizzi
Arby's Kitchen
Yo Suhshi
Wagamama
Zizzi
0
10000
20000
30000
40000
50000
60000
70000
80000
7244 4902 3896
72000
13712
2100
Sales(m)
Profit
From above given data of various restaurant chain operating in UK with their sales during
the year and estimated profit. As it has been said that UK is known great hub of restaurant in the
globe. By using information it has been present a column chart. From the chart is has been
observed that Arby's kitchen has more stake of customers because it has record number of sale
with highest profit 72,000 for the business of other restaurants. It will be helpful in maintaining
their performance and increasing goodwill for the company in long period.
Kind of restaurants Percentage
11

growth
Seasonal cuisine 12.00%
Traditional Cuisine 20.00%
Speedy cuisine 12.67%
Multi cuisine Ltd 38.00%
Unmoving cuisine 17.33%
12.00%
20.00%
12.67% 38.00%
17.33%
Seasonal cuisine
Traditional Cuisine
Speedy cuisine
Multi cuisine Ltd
Un moving cuisine
As per above mentioned data of kinds of kitchens growths percentages it has been
designed from multi cuisine as it is highest in delivering quality material to its customers. From
the above data multi cuisine kitchen is recorded as 38%. In respect of other only 12% is
minimum growth percentages for seasonal cuisines kitchen (Vercellis, 2011). Because of highest
percentage recorded it means quality of food and kitchen material is being offered as best
quality. Traditional cuisine kitchen is also in best percentage growth of 20%.
12

3.2
It is said to be a line which represent basic class or tendency of something. It indicate
geographical features or a combination of point that represented on a graph. It indicate behaviour
of a set of data to determine is any kind of certain practice.
Year Sales (£) Profit
2017 124578 45236
2018 198754 54285.36
2019 201452 67753.98
1 2 3
0
50000
100000
150000
200000
250000
124578
198754 201452
45236 54285.36
67753.98
Year
Sales (£)
Linear ( Sales (£))
Profit
Linear (Profit )
From above available data it has been observed that sales in 2018 is very high with
estimation of 201454. in that year is generate profit of 67753. The trend line is the line which
points out the different labels of figure that are varies with changes in sales units. The orange bar
show total sale in respective year (Wu and Pagell, 2011). In yellow bar are profit earn by
company with different sales in a particular year. The trend line is showing highest sale with
maximum profit because there services are favourable for those company during that year. Trend
line of profit is range below 70000 line because the average profit is in between 2018 – 19.
13

3.3 Covered in PPT
3.4
Formal Report
To,
The managing Director,
29th June 2017
Food for Friend is a kind of vegetarian restaurant which is know for serving modern
food and delivered seasonal set of menus. The report is prepared in regard with it. In the world
all people are foody wants best quality of food and services in order to take more advantages of
that situation (Tzeng and Huang, 2011). The restaurant is considered to open a new restaurant in
different part of the world so that it can be helpful in expansion of its restaurant chain in most
part of the country. In order to attain this objective it required to identify the need and wants of
customers which kind of food and facilities they re looking from restaurants.
Various methods can be used like qualitative and quantitative for the means of data
collection through organising a detailed survey analysis program. The business expansion plan
of Food for Friend restaurant is beneficial for the development of his business and make them
active to take corrective action regarding their sale and service provided to its regular
customers.
Recommendation: From the above research it has been suggested that restaurant facilities
should be more superior and attractive so that maximum number of customers can avail the
services..
Conclusion: Overall report concluded that resources of the restaurant are fully utilised by staffs
and customers are very much satisfied with the services and food quality of Food for friends
restaurant. The methods are use in appropriate manner in order to attain perfect results for the
better future.
TASK3
4.1
In every business whether restaurant sectors is required a effective plan that will be
helpful for maintaining its profitability. Documentation, organising of session, presenting and
14

offering new exposure of data information those are draw the attention of customers toward their
business. There are various information those used by Food for Friend:
DSS(Decision support system): It refer to a complete set of computer program that is
require to help with relation to decision making inside the business. It help to compile raw data,
documents, personal skills and knowledge and resolve issues those are arise in taking impressive
decision making (sosna, Trevinyo-Rodríguez and Velamuri, 2010).
Transaction processing system(TPS): It is said to be information processing techniques
used by business transactions those are associate wit collection, modification and renewal of
transaction data. It is said to be more reliable, transparent, consistency in evaluating data of Food
for Friend because the processing is done in real time (transaction processing system. 2017).
4.2
This project is all about, determining those activities which are essential for the
management of restaurant. It consists of different areas which are categories in relation to food
chain and staff responsibility. Some of the outside facilities services are also considered under
this project. All the information are define through using a network diagram which represent
completed of task scenario. It is used to determine total time required to finish the activities.
Critical path: It is the ways by which the longest duration of activities. It is used to
determine the ways path in order to see that which path is taking total time to finish a project and
with how much of time.
Figure: Net diagram
Path A = 1+4+7+8 = 20 days
Path B = 1+2+5+6 +8 = 22 days
Path C = 1+2+3+7+8 = 21 days
15

As per above represented network diagram it can be used to design critical path to
identify which path is best suitable for Food for Friend restaurant to achieve the desire outcome.
So path A is the least time taking to generate more profit and make any changes as per customer
requirement (Smith, Binns and Tushman, 2010). There are other two path which is taking more
time to complete a task or activity.
4.2
There are two of the main financial tool used for taking decision:
NPV: It is considered as difference among the present value of cash inflows and
outflows. It is the part of capital budgeting which is used to determine profitability of a
investment made over a project.
IRR(Internal rate of return): It is used to identify the potential investment made in a
project. The profitability can also be measured through using this method. It is known as
discounted rate which makes the NPV of entire cash flows from a particular investment must be
equal to zero.
Year Cash flow P.V@9% PV OF Project A
0 -350000 1 -350000
1 130000 0.9174311927 119266.055051
2 120000 0.8416799933 101001.599196
3 125000 0.7721834801 96522.9350125
4 100000 0.7084252111 70842.52111
5 240000 0.6499313863 155983.532712
Present value 543616.6430815
Net present value 193616.6430815
IRR 16.38%
The initial investment is -350000 which is recover in 5 year. With present value of
543616.As IRR rate is 16.38% which is out of initial investment. The company will get return
with that rate.
16

CONCLUSION
From the above project report it has been concluded that business decision is important
aspect for any business as with the help of this objectives that are set will be achieved. Under this
Food for Friend restaurant is taken as to use appropriate data collection techniques in their
research. Those are collected from primary and secondary sources. The column graph and pie
chart is being used to represent the data of various kitchen and restaurants how they are
performing in present as well as previous year. The financial tool is used by company in making
various decision about their growth and expansion.
17