Financial Plan and Report for Cosmos Café

This report outlines the financial plan and report for Cosmos Café, a start-up restaurant in Australia. It includes details on start-up costing, profit and loss account, cash flow forecast, balance sheet, and breakeven point analysis. The report also covers budget formulation, negotiation strategy, and ASIC reporting requirements.

BSBFIM801
MANAGE FINANCIAL RESOURCES
Assessment 1
Submitted by:
<Student name>
<Student Id>

Student Name Student Id
Table of Contents
Introduction:...............................................................................................................................2
Part 1:.........................................................................................................................................3
Financial Plan:............................................................................................................................3
Start up costing...........................................................................................................................3
Forecasted profit and loss account.........................................................................................3
Cash flow forecast for the Cosmos café based on the estimated profit and loss account......5
Balance sheet of Cosmos Café...............................................................................................5
Computation of the breakeven point......................................................................................6
Part 2:.........................................................................................................................................8
Financial Report.........................................................................................................................8
Part 3:.......................................................................................................................................12
Conclusion:..............................................................................................................................17
Part-4........................................................................................................................................17
References................................................................................................................................18

Student Name Student Id
Introduction:
With the ramified economic changes, every entrepreneur needs to analyse all the
internal and external factors before starting up new business. The start-up business which has
been undertaken in this report is the café services in Australia. The name of the business
would be Cosmos Café which will specialize in offering different types of coffees; pastas,
sandwiches, and cutlet. This Cosmos Café will win over the market by developing the core
competency in cost leadership and product differentiation strategy.

Student Name Student Id
Part 1:
Financial Plan:
The financial plan of the company is accompanied with the start-up cost, profit and loss and
cash flow statement of the company (Conway, 2013).
Start up costing
The Cosmos Café will have to bear the start up costing of AUD $ 964500. This minimum
cost which will be required to set up the Cosmos Café restaurant business in Australia.
Cosmos Café
Start up costing
Particular
Amount
($)
1 x Manager; 2 x Sales negotiators; 1 x secretary (210,000)
Rent/Rates/Insurance of Commercial Business premises (160,000)
Lease cost of restaurant (359,500)
Lease of kitchen equipment’s (300,000)
Selling and Corporate Marketing Costs (250,000)
Depreciation of Plant and equipment (15,000)
Head Office Costs (20,000)
working capital 350000
Total (964,500)
The start-up cost for the Cosmos café would be AUD $ 964500 which will be 30% financed
by the bank and 40% from the private capital and 30% will be invested by the promoters.
Forecasted profit and loss account
The profit and loss account of the Cosmos Café is based on the sales and required expenses
estimated for the
Budgeted Profit and Loss Account for Cosmos Café
2019
Revenues
(Amount in
$)
Sales of food 2100000
Other revenues 200000
Total 2300000
EXPENDITURE
Variable Costs -630000
Fixed Costs

Student Name Student Id
1 x Manager; 2 x Sales negotiators; 1 x secretary (210,000)
Rent/Rates/Insurance of Commercial Business premises (160,000)
Lease cost (359,500)
Lease of kitchen equipment’s (300,000)
Selling and Corporate Marketing Costs (250,000)
Depreciation of Plant and equipment (15,000)
Head Office Costs (20,000)
Total Fixed Costs (1,314,500)
TOTAL COSTS (1,944,500)
PROFIT/(LOSS) FOR YEAR 355,500
Return on investment 37%

Student Name Student Id
Cash flow forecast for the Cosmos café based on the
estimated profit and loss account
Year
Particular 2019 2020 2021 2022 2023 2024 2025 2026
Cash inflow
1680
000
22680
00
249480
0
27442
80
301870
8
332057
8.8
365263
6.68
401790
0.348
Cash
outflow of
Variable cost
-
5040
00
-
68040
0 -748440
-
82328
4
-
905612
.4
-
996173
.64
-
109579
1.004
-
120537
0.104
Fixed cost
investment
-$
1,329
,500
-$
1,329,
500
-$
1,462,4
50
-$
1,608,
695
-$
1,769,5
65
-$
1,946,5
21
-$
2,141,1
73
-$
2,355,2
90
Total cash
outflow
-$
825,5
00.00
-$
649,10
0.00
-$
714,010
.00
-$
785,41
1.00
-$
863,95
2.10
-$
950,34
7.31
-$
1,045,3
82.04
-$
1,149,9
20.25
Cash flow
from the
business
$
854,5
00.00
$
1,618,
900.00
$
1,780,7
90.00
$
1,958,
869.00
$
2,154,7
55.90
$
2,370,2
31.49
$
2,607,2
54.64
$
2,867,9
80.10
*Present
value factor
@12%
$
0.89
$
0.80
$
0.71
$
0.64
$
0.57
$
0.51
$
0.45
$
0.40
Present
Value
$
762,9
46.43
$
1,290,
577.17
$
1,267,5
31.15
$
1,244,
896.66
$
1,222,6
66.37
$
1,200,8
33.04
$
1,179,3
89.59
$
1,158,3
29.06
Total(B)
$
9,327,1
69.46
Notes
The total sales of the Cosmos will be accompanied with the 80% of cash sales and 20% of
sales will be on credit.
Variable cost will have 80% cash outflow and 20% of the cash outflow will be related to last
year.
Variable cost is determined on the basis of the 30% of the total sales (Conway, 2013).
Balance sheet of Cosmos Café
Assets 2019
Current Assets
Cash $
350,000.00
Accounts receivable $

Student Name Student Id
2,000.00
Inventory $
104,889.91
Prepaid expenses $
5,500.00
Short-term investments
Total current assets $
462,389.91
Fixed (Long-Term) Assets
Long-term investments $
48,710.00
Property, plant, and equipment $
50,000.00
(Less accumulated depreciation)
Intangible assets $ -
Total fixed assets $
98,710.00
Other Assets
Deferred income tax
Other
Total Other Assets $ -
Total Assets $
561,099.91
Liabilities and
Owner's Equity
Current Liabilities
GST PAYABLE $
80,544.25
Accounts payable $
5,000.00
Short-term loans $
55,000.00
Income taxes payable $ -
Accrued salaries and wages $
200,000.00
Unearned revenue $
6,823.00
Current portion of long-term debt $
25,000.00
Total current liabilities $
291,823.00
Long-Term Liabilities
Long-term debt $
169,277.33
Deferred income tax
Other
Total long-term liabilities $
169,277.33
Owner's Equity
Owner's investment $

Student Name Student Id
100,000.00
Retained earnings $ -
Other
Total owner's equity $
100,000.00
Total Liabilities and Owner's
Equity
$
561,100.33
Computation of the breakeven point
Break Even analysis
Particular 2019
Total sales Units sales of
400000 2300000
Variable expenses 690000
Contribution
$
1,610,000
Contribution per unit
$
4.03
Fixed cost expenses
$
964,500.00
Profit and loss account
$
645,500.00
Break-even point analysis= It is the point at which company will have no profit and no loss in
its business.

Student Name Student Id
Break even analysis
Contribution $ 1,610,000
Fixed cost expenses $ 964,500.00
BEP $ 239,627.33
(Conway, 2013).
Part 2:
Financial Report
 Products or services:
The start-up business will provide services of restaurant “Cosmos Cafe”. The café will
specialized in different types of coffees, pastas, sandwiches, and cutlets are produced
 Forecasting technique:
There are several forecasting technique however the best one is using the time-series
forecasting, consumer surveys, simple linear regression method and multiple regression
method. These techniques will provide financial forecasts for future and will make analyse
about financial figure (Finch, 2016).

Student Name Student Id
 Analysis of forecasts:
In order to analyse he forecasted data, we could use the following tables.
Time series forecasting: This is a method whereby data for over a period is forecasted and
analysed. Time series is an accurate technique which describes regarding
Consumer surveys: these are different types of method for consumer surveys such as
questionnaires, interviews and telephonic conversations etc. These are different types of
direct conversation with consumers, which discloses financial information (Fern&es,
Ferreira, & Moura, 2016).
Simple linear regression method: this technique describes regarding the dependency of one
dependent variable over independent variable. In context of forecasting, sales are one of the
independent variable and other items are considered as dependent variable (Johnston, & Bate,
2013).
Multiple regression method: In this method more variables are considered while analysing
financial figures.
 Statutory requirements:
Company needs to comply with the applicable laws such as licensing of the foods and
beverage, corporation laws and employment laws to operate new busienss. However, Cosmos
Food café needs to set up annual compliance program in its business process to strengthen its
legal compliance program.
Budget formulation
A budget is formulated to evaluate futuristic profits or loss for a business in a year. A budget
is formed for a month, a quarter or yearly basis. It must contain costs like fixed costs, variable
costs, incomes and actuals. While formulating budget, it is essential to implement book
keeping system and accounting framework.
 Collection of comparative and trend information to support budget:

Student Name Student Id
For making comparative analysis and trend analysis of restaurant business, it is essential to
collect information of similar enterprise from online websites. Various government agencies
also provide trend information regarding demand and supply of restaurant business. This
information will aid in development of budget (Mohd, Idris, & Momani, 2013).
 Negotiation strategy to acquiring funding for business project:
Company needs to enter into the strategic alliance with the other organizations and promoters
who could provide funding for the busienss. however, there are several angle investors and
business organization who could provide funding to Cosmos. Nonetheless, the main
negotiation strategy would be to showcase the profitability of company and how well Cosmos
will grow in future. The restaurant is a start-up and an initiative to provide homemade coffee
and food at low cost price along with good quality. The profits for the proposal as discussed
in the budget are good enough to pay back to bank (Rashid, & Ghose, 2015).
 Records maintained to ensure up-to-date information about resource allocations and
usage
The organisation will implement accounting framework and will maintain books of account,
which will keep financial information and all the financial entries to represent the financial
figures. Also further reports will be formulated such as cost reports, sales reports etc.
 Reporting budget performance and expenditure:
The budget performance and expenditures will be reported through preparation of budgeting
report, which will include budget variance technique and such other techniques, which will
analyse the variations (Schmidt, Spann, & Zeithammer, 2014).
 Risk return analysis:
The risk factors, which are associated with the business idea is that it provides competitive
risk, interest rate risk and inflation risk. The expected return for the business idea is to be
around 9%.
 Budget monitoring:

Student Name Student Id
The budget can be monitored at 15 days interval and can be measured through budget
deviation. However, if in case variation in the external factors, project escalation amount
could be considered by Cosmos Company in its prepared budget.

Student Name Student Id
Part 3:
 Explain the reports that require lodging by this company according to the Australian
Security and Investment Commission (ASIC)
Business activity statement and financial reports are to be formulated which includes
comprehensive profit and loss statement, balance sheet, cash flow statement and fund flow
statement. These reports are to be assessed and reviewed in accordance with Australian
security and investment commission (ASIC) (Schmidt, Spann, & Zeithammer, 2014).
 Analyse these financial records by applying the horizontal and vertical analysis
methods.
The financial records represent that the organisation will be earning good amount of revenues
and profits and will also have 37% return on investment.
Horizontal analysis
This analysis is implemented to identify the % change in the budgeted profit and loss of the
Cosmos café in one year.
Budgeted Profit and Loss Account for Cosmos Café
% change in the
amount
2019 2020
Revenues
Sales of food 2100000 2310000 0.10
Other revenues 200000 220000 0.10
Total 2300000 2530000 0.10
EXPENDITURE
Variable Costs -630000 -693000 0.10
Fixed Costs
1 x Manager; 2 x Sales negotiators; 1 x
secretary (359,500) -395450 0.10
Rent/Rates/Insurance of Commercial Business
premises (300,000) -330000 0.10
Lease cost (250,000) -275000 0.10
Lease of kitchen equipment (15,000) -16500 0.10
Selling and Corporate Marketing Costs (20,000) -22000 0.10
Depreciation of Plant and equipment 350,000 385000 0.10

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Head Office Costs (964,500) -1060950 0.10
Total Fixed Costs
(1,559,00
0) -1714900 0.10
TOTAL COSTS
(2,189,00
0)
(2,407,90
0) 0.10
PROFIT/(LOSS) FOR YEAR 111,000 122,100 0.10
Return on investment 12% 13% 0.10
However, there will be only 10% changes in total turnover, expenses and return on
investment. This is because we have set up variation in the data by 10% on yearly basis
(Siguaw, & Simpson, 2015).
Horizontal analysis of the balance sheet
Assets 2019 2020 % change in the
capital
Current Assets
Cash
Accounts receivable $
2,000.00
$
2,200.00 0.10
Inventory $
13,994.54
$
15,393.99 0.10
Prepaid expenses $
5,500.00
$
6,050.00 0.10
Short-term investments $
-
Total current assets $
21,494.54
$
23,643.99 0.10
Fixed (Long-Term) Assets $
-
Long-term investments $
48,710.00
$
53,581.00
Property, plant, and
equipment
$
50,000.00
$
55,000.00 0.10
(Less accumulated
depreciation)
$
-
Intangible assets $
-
$
-
Total fixed assets $
98,710.00
$
108,581.00 0.10
Other Assets $
-
Deferred income tax $
-
Other $
-

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Total Other Assets $
-
$
-
$
-
Total Assets
$
120,204.
54
$
132,224.
99
$
-
Liabilities and
Owner's Equity
$
-
Current Liabilities $
-
GST PAYABLE
Accounts payable $
5,000.00
$
5,500.00 0.10
Short-term loans $
55,000.00
$
60,500.00 0.10
Income taxes payable $
-
$
-
Accrued salaries and
wages
$
200,000.00
$
220,000.00 0.10
Unearned revenue $
6,823.00
$
7,505.30
Current portion of long-
term debt
$
25,000.00
$
27,500.00 0.10
Total current liabilities $
291,823.00
$
321,005.30
Long-Term Liabilities $
-
Long-term debt $
-
$
-
Deferred income tax $
-
Other $
-
Total long-term
liabilities
$
-
$
-
Owner's Equity $
-
Owner's investment $
100,000.00
$
110,000.00 0.10
Retained earnings $
-
$
-
Other $
-
Total owner's equity $
100,000.00
$
110,000.00 0.10
$
-
Total Liabilities and
Owner's Equity
$
391,823.
00
$
431,005.
30 0.10

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In case of balance sheet, there will be only 10% changes in all the assets and liabilities. This
is because we have set up variation in the data by 10% on yearly basis (Boshyk, 2016).
Vertical analysis
It is the analysis which reflects the % of the one item is based on the particular base item. IN
this case, we will take overall turnover of the Cosmos Company as based to make the vertical
analysis of the profit and loss account.
Vertical analysis of Budgeted Profit and Loss Account for Cosmos Café
2019
% change in the
amount
Revenues
Sales of food 2100000 0.91
Other revenues 200000 0.09
Total 2300000 1.00
EXPENDITURE 0.00
Variable Costs -630000 1.00
Fixed Costs
1 x Manager; 2 x Sales negotiators; 1 x secretary (210,000) -0.09
Rent/Rates/Insurance of Commercial Business
premises (160,000) -0.07
Lease cost (359,500) -0.16
Lease of kitchen equipment (300,000) -0.13
Selling and Corporate Marketing Costs (250,000) -0.11
Depreciation of Plant and equipment (15,000) -0.01
Head Office Costs (20,000) -0.01
Total Fixed Costs
(1,314,500
) -0.57
TOTAL COSTS
(1,944,500
) -0.85
PROFIT/(LOSS) FOR YEAR 355,500 0.15
Note- In this case, the base for the vertical analysis is the total turnover of the Cosmos
Company (Solomon, 2014).

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Vertical analysis of the Balance sheet
The vertical analysis is undertaken to evaluate the % of the total assets and liabilities based
on the total assets (Wei, Same, & Lee, 2014).
Liabilities and Owner's Equity
Current Liabilities
GST PAYABLE % base on the total
assets
Accounts payable $
5,000.00
$
0.04
Short-term loans $
55,000.00
$
0.46
Income taxes payable $
-
Accrued salaries and wages $
200,000.00
$
1.66
Unearned revenue $
6,823.00
$
0.06
Current portion of long-
term debt
$
25,000.00
$
0.21
Total current liabilities $
291,823.00
$
2.43
Long-Term Liabilities $
-
Long-term debt $
-
$
-
Deferred income tax $
-
Other $
-
Total long-term liabilities $
-
$
-
Owner's Equity $
-
Owner's investment $
100,000.00
$
0.83
Retained earnings $
-
$
-
Other $
-
Total owner's equity $
100,000.00
$
0.83
$
-
Total Liabilities and Owner's
Equity
$
391,823.0
0
$
431,005.30

Student Name Student Id
 Explain whether you think that the organisations financial decisions will serve to meet
the organisations planned outcomes.
Yes, the organisation has made appropriate financial decisions and financial
techniques, which will meet organisation-planned outcomes. Since, the financial decisions
are made considering the forecasting techniques and through budgeting technique (Blahova,
& Knapkova, 2011).
Conclusion:
With this it can be concluded that a good business plan requires proper financial
budgeting and financial techniques for achieving pre-defined goals and objectives. It is to be
assessed that the budget and other documents have made considering the trend information,
comparative information and through forecasting techniques. The organisation has made
good planning which will be fruitful and would bring profits for the entrepreneur. Hence, it is
a planned budget which is deemed to be useful for organisation and for future.
Part-4
Dear Sir,
It is in relation to the funding of the Cosmos café for its business operation. After
preparation of the budget and other documents on the basis of the internal and external
factors and the economic growth of the Australia, It has been considered that the trend
analysis information, comparative information and through forecasting techniques have
shown that Cosmos will have profitable busienss and will grow effectively. The return on
capital employed of company will also be too high which will add value for the invested
capital. If the Cosmos Café is funded then it will surely provide good return and if you agree
then we will also offer some of the part of the shares in future when the busienss will make
profit to compensate your bank loan with the shares. It will also align your interest with the
Cosmos development (Blahova, & Knapkova, 2011).

Student Name Student Id

Student Name Student Id
References
Blahova, M., & Knapkova, A. (2011). Efective Strategic Action: From Formation to
Implementation. International Conference on Economics, Business & Management,
2(1), 61-65.
Boshyk, Y. ed., (2016). Business driven action learning: Global best practices. Australia:
Springer.
Conway, J.B., (2013). A course in functional analysis (Vol. 96). 2nd ed, Australia: Springer
Science & Business Media.
Fernces, C., Ferreira, M. & Moura, F., (2016). PPPs—True Financial Costs & Hidden
Returns. Transport Reviews, 36(2), pp.207-227.
Finch, B. (2016). How to write a business plan. 2nd ed, Australia: Kogan Page Publishers.
Johnston, R.E. & Bate, J.D., (2013). The power of strategy innovation: A new way of linking
creativity & strategic planning to discover great business opportunities. 33(2),
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Mohd, W., Idris, S. & Momani, R.A., (2013). Impact of environmental dynamism on
marketing strategy comprehensiveness & organizational performance. International
Journal of Business & Management, 8(9), p.40.
Rashid, S. & Ghose, K., (2015). Organisational culture & the creation of br& identity: retail
food br&ing in new markets. Marketing Intelligence & Planning, 33(1), pp.2-19.
Schmidt, K.M., Spann, M. & Zeithammer, R., (2014). Pay what you want as a marketing
strategy in monopolistic & competitive markets. Management Science, 61(6),
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Siguaw, J.A. & Simpson, P.M., (2015). A marketing plan for marketing instruction: A
satirical look at student comments. In Creating & Delivering Value in Marketing (pp.
129-133).4th ed Australia: Springer International Publishing.

Student Name Student Id
Solomon, M.R., (2014). Consumer behavior: Buying, having, & being (Vol. 10). Engelwood
Cliffs, NJ: 3rd ed, Australia: Prentice Hall.
Wei, Y.S., Samiee, S. & Lee, R.P., (2014). The influence of organic organizational cultures,
market responsiveness, & product strategy on firm performance in an emerging
market. Journal of the Academy of Marketing Science, 42(1), pp.49-70.