Analysis of Financial Tools and Information Processing

The assignment involves analyzing the use of financial tools to select a profitable project, and examining information processing tools to improve communication and coordination within an organization. It includes a critical path method evaluation and a case study on a food business. The assignment also touches on research methods, including data collection and statistical analysis.

Business Decision Making

INTRODUCTION
Business decision making is an important part of every organisation which
derives their functions towards success. Such decisions are taken with regard to both; financial
and non-financial activities. This helps to manage day to day functions of companies. Business
decision-making involves the use of informational and financial tools to select options which are
most beneficial for the firm. Research plays an important role in the improvement of decision
making power of management. Such research techniques help in the determination of actual and
real views of respondents which contribute in identification of their actual position in market.
Food for Friends is a restaurant which provides their services in London and desires to start a
new branch (Groebner and et. al., 2011).
In the present report, use of primary and secondary source in determination of business
problems, survey methodologies and sampling frame, designing of questionnaire, use of
statistical methods to draw conclusion as well as use of measures of dispersion to provide
information are explained. Also, use of information and financial tools to enhance decision
making and ascertain profitability of projects are discussed in here.
TASK 1
1.1 Creation of plan
Food for Friends is a restaurant providing their business functions in London. It provides
various kinds of vegetarian and non-vegetarian dishes of good quality at affordable prices. Main
aim of restaurant is to provide tasty and home-made foods to their customers to satisfy their
different needs. Due to good response of customers, management of Food for Friends decided to
start another new branch in London. For this purpose, they decided to take the response and
opinions of customers and respondents about viability of move as well as quality of their existing
services. Such research helps to ascertain the competitors which prevail in market and forces
which affects their working. In the process of research, two types of sources are used called as
primary and secondary data collection method.
Primary method: This method includes collection of data for the first time from
respondents. For research purpose, it is considered as the most important method because it
provides relevant information regarding research topics. The outcomes and conclusion are more
appropriate and right regarding business problems. It provides an opportunity to take positive

decisions. Different methods of primary source are survey, questionnaire, online etc. which are
defined as below:
 Survey: This methods helps in the collection of detailed information. It is possible as it
involves face to face communication with respondents.
 Questionnaire: It consists of various questions regarding business problems and about
future plans to know their response. It ascertains the views in a limited manner.
 Online: It consists of use of social media platform to ascertain the views of large
population in less time. This method as wide range in comparison to all other methods of
primary source.
Secondary method: This includes such information which is already published on some
other sources like articles, magazines, etc. It is called as second hand information which is not
very much relevant regarding research topics and business problems which are faced by Food for
Friends.
From the above assessment of two methods identified that primary source of data
collection is most appropriate in the present case to conduct research. This will enables the
management of restaurant to effectively grab the different opinions of individuals of society and
apply them to attain growth in future period of time. One of the best method which was applied
in the present research is about primary source of data collection. There are many tools are
persist within this method. But to limited availability of time and cost the best suited tool under
this method is questionnaire. It helps to easily attain the views of respondents.
1.2 Research methodologies and sample designing
Research: Research is a process of collection of information from the respondents
regarding their present business problems, future plans and forces which are present in the
market. Such information is further used by management of Food for Friends to enhance their
decision making power and select the best options which are profitable for business.
Research methodologies: This includes the use of appropriate research techniques which
provide effective results in cost efficient manner. Such research techniques are used to know the
feedbacks of respondents regarding starting of another branch in London, quality of existing
services, current position in market and their preferences and tastes. Therefore, researcher selects
the primary method of data collection because it is free from partiality and immoral means. To

conduct proper research, questionnaire is prepared which includes 10 different questions. Such
can further be used by the management to resolve their business problems and take effective
decisions regarding launch of a new restaurant (Ferrell and Fraedrich, 2015).
Different research methods:
 Descriptive vs Analytical: This method includes research of various problems. On other
method, analyst use facts which are already given and analyse them to get effective
results.
 Quantitative vs Qualitative: Quantitative method focuses on high amount of
information to ascertain their results. On the other hand, qualitative provides emphasis on
relevant and appropriate information.
Sample designing: It consists of the procedure of designing sample which includes
selection of particular number of respondents through which research process gets started. Large
number of methods are available like cluster, stratified and random. For having limited period of
time and fund, researcher selects random sampling method.
Random sampling: It includes randomly the selection of respondents from total
population. It is considered as an unbiased technique because it involves the selection on random
basis. To make research effective and attain accurate results, 50 respondents are used to ascertain
their opinions. Some crucial research questions are made to improve the decision making of
Food for Friends as mentioned below:
 Launch of another branch in London
 Current market position
 Effectiveness and efficiency of present services
1.3 Designing of questionnaire
Questionnaire: It consists of series of questions answered by respondents in a fix format
to ascertain their preferences, behaviour and facts. Questions can be of two types i.e. open ended
and close ended. Open-ended means where respondents have the right to formulate their own
answer. Close ended means respondents have to select answers from the options which are
provided by researcher. Open-ended questionnaires are more relevant but involves more time in
comparison to close ended. In the present case, researcher uses close ended questionnaire which
includes two to three options from which the respondents have to select their answer. This helps

the researcher to complete research on time and collect respondents view points to gather
effective outcomes (Tufféry, 2011).
Questionnaire
Name:
Age:
Gender:
Q1. Do you ever visit Food for Friends restaurant?
 Yes
 No
Q2. Do you think opening of new branch in London is good decision?
 Yes
 No
 Cant say
Q3. What attracts you most in Food for Friends restaurant?
 Ambience
 Fast services
 Quality of Food
Q4. Are you satisfied with the quality of Food?
 Satisfied
 Not satisfied
Q5. Are you satisfied with the pricing policy of Food for Friends for their foods and services?
 Highly satisfied
 Moderate
 Not satisfied
Q6. What you like most in Food for Friends restaurant?
 Snacks
 Sea food
 Cheese
Q7. What location you wants to choose to start new branch in London?
 Countryside
 Near tourist destinations

 In city
Q8. Did you think that Food for Friends have enough funds to launch new restaurant?
 Yes
 No
Q9. Do you like atmosphere of Food for Friends restaurant?
 Yes
 No
 Cant say
Q10. What you suggest Food for Friends for their success in future?
TASK 2
2.1 Evaluation of information
Year Sales Net Profit
2008 3600 1100
2009 3750 1250
2010 3850 1300
2011 4250 1450
2012 4900 1500
2013 5650 1600
2014 5700 1750
2015 6050 1850
2016 6250 1920
2017 6400 2000
Mean 5040 1572
Median 5275 1550

Mode 3600 1100
Q1. Do you ever visit Food for Friends restaurant?
Particulars Respondent
Yes 34
No 16
Total 50
Mean 25
Median 25
Mode 2
Q2. Do you think opening of new branch in London is good decision?
Particulars Respondent
Yes 30
No 10
Cant say 10
Total 40
Mean 20
Median 20
Mode 0
Q3. What attracts you most in Food for Friends restaurant?
Particulars Respondent
Ambience 6
Fast services 10
Quality of
Food 34
Total 50

Mean
16.6666666
667
Median 10
Mode 6
Q4. Are you satisfied with the quality of Food?
Particulars Respondent
Satisfied 38
Not satisfied 12
Total 50
Mean 25
Median 25
Mode 2
Q5. Are you satisfied with the pricing policy of Food for Friends for their foods and services?
Particulars Respondent
Highly
satisfied 12
Moderate 22
Not satisfied 16
Total 50
Mean
16.6666666
667
Median 16
Mode 12
Q6. What you like most in Food for Friends restaurant?
Particulars Respondent
Snacks 10

Sea food 32
Cheese 8
Total 50
Mean
16.6666666
667
Median 10
Mode 10
Q7. What location you wants to choose to start new branch in London?
Particulars Respondent
Countryside 8
Near tourist
destinations 26
In city 16
Total 50
Mean
16.6666666
667
Median 16
Mode 8
Q8. Did you think that Food for Friends have enough funds to launch new restaurant?
Particulars Respondent
Yes 44
No 6
Total 50
Mean 25
Median 25
Mode 2
Q9. Do you like atmosphere of Food for Friends restaurant?

Particulars Respondent
Yes 28
No 12
Cant say 10
Total 50
Mean
16.6666666
667
Median 12
Mode 4
2.2 Analysis of results
Statistical methods are used by researcher to draw important conclusions from the
information collected through respondents and the previous data of sales and net profit. Such
methods includes about mean, median and mode. All three methods have their different use and
helps in improvement of decision making power of management of food for Friends restaurant
(Zolfani and et. al., 2013).
Mean: It is called as average value which is calculated from the given series. In present
case, Food for Friends restaurant calculate mean of sales and net profit. This helps in
ascertainment of certain ideas regarding their performance with the help of such facts. Mean of
sales is 5040 and for net profit is 1572. The total number of respondents which are taken to
conduct research is 50. As per their opinion the average result which was attained is 25 who
visit the restaurant. The option of opening of new branch is London is getting the support of
large number of individuals. The mean value which is attained here from the views of
respondents is 20.
Mean: ∑X/N
Median: It is recognised as mid vale of series in case even number of odd number of data
is presented. But in case of even number the calculation of median is different. The formula
which is used in calculation of median in even number is [L1 + (N/2) – c/F*i]. It palsy an huge
role in improvement of the decision making power of Food for Friends restaurant to make
sustainability in their performance. The median of sales is 5275 and for net profit is 1550. The

median of respondents who visit restaurant is also 25. The median value which was attained from
the views respondents about the question of opening of new branch in London is 20.
Mode: It is called as such figure which is present most number of times in a series. Food
for Friends decided to calculate the mode of sales and net profit which improves the power
regarding calculation of better outcomes. It is also defined as the value which mostly used as
sample in a series. For sales it is calculated as 3600 and for net profit calculated as 1100. The
mode of respondents who visit restaurant is 2. The mode of question regarding opening of new
branch in London is 0.
Mode: L + h ( fm – f1 / 2fm – f1 - f2 )
2.3 Analysis of measures of dispersion
Year Sales Net Profit
2008 3650 1200
2009 3730 1350
2010 3870 1460
2011 4200 1510
2012 4950 1590
2013 5600 1650
2014 5750 1710
2015 6000 1880
2016 6150 1970
2017 6450 2200
Minimum 3650 1200
Maximum 6450 2200
Standard
deviation
1089.85473
03808
300.584615
5596
Correlation
Coefficient
0.93544097
64

Range: Two types of range are given which are compared with each other to interpret
important results. Such range is called as minimum and maximum. Food for Friends restaurant
calculates the minimum and maximum range from the series of sales and net profit which is
given above (Schmoldt and et. al., 2013). This helps to make important policies for future
operations to achieve sustainability. The minimum range of sales and net profit is 3650 and
1200. On other hand, maximum range of sales and net profit is 6450 and 2200.
Standard deviation: √∑Fdx2/N – (∑Fdx/N)2
Variance: This includes about the squaring of mean in calculation standard deviation. It
includes about actual and standard cost which is present in research process. Formula: S2 = ∑(X
– X )2 / n-1
2.4 Benefits of quartile, percentile and coefficient correlation
Quartile: It can be categorized between three parts. First quartile is also called as Q1
which exist to middle value among smallest value or median of data. It is upper limit of quartile
which is having the limit of 75%. Another is lower quartile which has limit of 25% called as
median of information. Last, Interquartile having the limit of 50 %, which is mid value from the
median to the hight figure which is present in series.
Percentile: This method is used in measurement of values in statistical form. This
includes about the presentation of results in form of percentage. This makes the presentation and
comparison of results easier (Yager and Kacprzyk, 2012).
Coefficient correlation: This method is used to show the relationship between two
variables. To make their decision better, Food for Friends decided to understand the relationship
between sales and net profit. The major advantage of using this method is to provide relation in
quantitative terms which is easily evaluated. The good range is said from 1 to -1. If the results
are fallen between such limit then it is said sales and net profit has positive relation.
TASK 3
3.1 Various graphs and charts
Q1. Do you ever visit Food for Friends
restaurant?
Frequency
Yes 34

No 16
34
16
Yes
No
Q2. Do you think opening of new branch in
London is good decision?
Frequency
Yes 30
No 10
Cant say 10
Yes No Cant say
0
5
10
15
20
25
30
35 30
10 10
Column B

Q3. What attracts you most in Food for
Friends restaurant?
Frequency
Ambience 6
Fast services 10
Quality of Food 34
6
10
34
Ambience
Fast
services
Quality of
Food
Q4. Are you satisfied with the quality of Food? Frequency
Satisfied 38
Not satisfied 12
Satisfied Not satisfied
0
5
10
15
20
25
30
35
40 38
12
Column B

Q5. Are you satisfied with the pricing policy of
Food for Friends for their foods and services?
Frequency
Highly satisfied 12
Moderate 22
Not satisfied 16
Highly satisfied
Moderate
Not satisfied
0
5
10
15
20
25
12
22
16
Column B
Q6. What you like most in Food for Friends
restaurant?
Frequency
Snacks 10
Sea food 32
Cheese 8

10
32
8
Snacks
Sea food
Cheese
Q7. What location you wants to choose to start
new branch in London?
Frequency
Countryside 8
Near tourist destinations 26
In city 16

8
26
16
Countryside
Near tourist des-
tinations
In city
Q8. Did you think that Food for Friends have
enough funds to launch new restaurant?
Frequency
Yes 44
No 6

Yes No
0
10
20
30
40
50 44
6
Column B
Q9. Do you like atmosphere of Food for
Friends restaurant?
Frequency
Yes 28
No 12
Cant say 10

28
12
10
Yes
No
Cant say
3.2 Trend line
This includes about estimation of the future performance of Food for Friends which helps
in identification of positive outcomes. It provides the opportunity to researcher to make effective
strategies and policies which helps to attain sustainability. This can be evaluated on the basis of
use of trend line chart. To ascertain their growth in future years the figures of sales and net profit
are estimated to understand about the profitability (Aharoni, Tihanyi and Connelly, 2011).
Year Sales Net Profit
2017 7220 2150
2018 7650 2350
2019 8720 2500

2020 8800 3250
1 2 3 4
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2017 2018 2019 2020
7220 7650
8720 8800
2150 2350 2500
3250
Year
Linear (Year)
Sales
Linear (Sales)
Net Profit
Linear (Net Profit)
From the above graph, it is observed that sales and net profit both are growing in future
years. From such improvement in their sales it is noticed that customers like their food and
services in London. It is also observed that, market conditions are favourable which helps to
expand their business operations. So, it is effective move for food for Friends to start their new
branch in London. This helps to attain competitive advantage and large market share.
3.3 Covered in PPT
3.4 Formal business report
To
Managing Director
10 February 2018
Food for Friends is a restaurant which provides various food items to the
customers of London. The main purpose behind conduct research is ascertain the views of
customers and respondents about their expansion plan. The management of Food for Friends
wants to open new branch in London to improve their sales and profitability. This also

contributes in achievement of competitive advantage, improved brand image and large market
share. Researcher conducts the research to know the opinions of respondents about their
existing services, quality of food, pricing policies, their preferences and tastes etc. For this
purpose, random sampling method is used to select respondents. To make their research more
effective primary source of data collection is used. Under this, close ended questionnaire is
prepared which includes different question regarding business problem and their objectives. To
interpret such information statistical methods are used like mean, median and mode. Measures
of dispersion are also used to ascertain effective results and enhance their decision making
power to implement their future plans and accomplish their targets.
Recommendation
It is recommended that appoint researcher to conduct research activities. This helps in
application of the effective techniques which provides true information. Appointment of expert
also helps to draw important solutions to achieve their targets.
Conclusion
It has been concluded from the above report that, research and use of financial tools
improves decision-making to accept profitable project and attain sustainability in their future
performances.
TASK 4
4.1 Information processing tools
These tools are used by Food for friends to improve communication and coordination
among their different services. This includes the use of three methods which are TPS, DSS and
MIS which are define below:
 TPS: This system provides opportunity to perform functions in systematic manner. This
contributes to achieve their targets within given period of time. This helps in customer
satisfaction and improvement of profitability.
 DSS: This system provides opportunity to maintain same level of performance from their
starting to end level. This provides opportunity regarding maintenance of quality in their
services in each and every department (Pettigrew, 2014).

4.2 Evaluation of Critical path
Path A: 1+4+7+8 = 10Days
Path B: 1+2+5+6+8 = 15 Days
Path C: 1+2+3+7+8 = 17 Days
Under critical path method, longest path is selected. From above given paths, path C is
selected which is taken 17 days to complete.
4.3 Use of financial tools
Project
Discounting
factor Discounted cash inflow
Year
Cash
Flow 12.00% Present Value
0 -190000 1 -190000
1 50000 0.893 44645
2 64000 0.797 51020.8
3 58000 0.712 41284.4
4 70000 0.636 44485
Total P.V 181435.2
Initial investment
of year -190000
NPV -8564.8
IRR 9.94%
NPV is recognised as negative of 8564.8 and IRR shows return of 9.94%.

CONCLUSION
It has been concluded from the above report that research provides relevant information
regarding different business problems and opinions of customers about their new branch in
London. This provides an opportunity regarding making changes in their existing strategies and
policies to satisfy the preferences of their customers. Primary source of data collection is used to
gather more relevant information and improve their decision making power. Various statistical
methods like mean, median and mode are used to gather effective outcomes. Similarly, various
measures of dispersion are used like standard deviation, correlation coefficient, etc. It has been
assessed that there are two financial tools i.e. NPV and IRR which are used to select a profitable
project. To improve their communication and coordination, different information processing
tools are used like TPS, MIS and DSS.