Detailed Financial Report: Nica Waterfall Restaurant Expansion Plan

This finance report details the financial plan for Nica Waterfall Restaurant, a firm in the restaurant industry planning to open a new branch with diverse cuisine offerings. The report includes key sources of financial information, income and expenditure projections, cost analysis, pricing strategies, and contribution margin calculations. It also covers profit projections, asset requirements, cash flow, capital investment needs, and budget targets. The report identifies potential sources of finance like bank loans, retained earnings, and personal savings. Furthermore, it discusses the impact of financial planning on business management, the cost of securing finance, and strategies to obtain finance, including the importance of certified financial projections. The financial projections are detailed, showing revenue, cost of goods sold, expenses, and net profit over several years, with assumptions on sales and customer growth. The report concludes with references to relevant sources.

FINANCE

TABLE OF CONTENTS
Section 1..........................................................................................................................................1
Section 2..........................................................................................................................................1
1 Key sources of information that are used to identify and monitor income and expenditure....1
Income and expenditure, cost of production and services and pricing strategies........................1
Contribution margin.....................................................................................................................3
Profit projections and main aspect of financial plan(2)...............................................................4
Section 3..........................................................................................................................................5
Profit target reflect and desired returns.......................................................................................5
Identification of asset requiremnents and asset management strategy........................................5
Cash flow projections..................................................................................................................5
Identification of capital investment requirements.......................................................................5
Budget targets..............................................................................................................................6
Requirements for startup finance or ongoing finance..................................................................6
Section 4..........................................................................................................................................6
Identification of potential sources of finance..............................................................................6
3 Impact of financial planning on way in which buisness is managed........................................7
Cost of securing finance or effective and affordabe source of finance (4)..................................7
Strategies to obtain finance..........................................................................................................7
REFERENCES................................................................................................................................8

Section 1
Nica waterfall restaurant is the firm that is operating in restaurant industry and wants to open new branch in different locations.
There are number of dishes that are offered by restaurant to the people like British, Indian, Mexican and Chinese as well as
Intercontinental . Same products will be offered in new restaurant. In the waterfall restaurant there will be medium sized waterfall and
in promixmity area there will be bamboo tables and chairs where people eat food above water on table and chaires. Main goal of the
firm is to increase its revenue by 15% in two years’ time period. Vision of the restaurant is to capture large market share in Tokyo by
serving different sort of customers.
Section 2
1 Key sources of information that are used to identify and monitor income and expenditure
Key sources of information are different websites where informaiton about product price and cost is readily available. These
sources are used to make estimation about income that can be earned and expenditures that can be made in the business. From these
sources information about growth rate that is observed in case of firms operating in relevant industry in terms of revenue and cost is
identified. By using same projection are made about income and expenses. In order to monitor income and expenses projection sheet
that is given below is used. All expenses are matched with projected value and on this basis time to time income and expenses are
monitored by firms.
Income and expenditure, cost of production and services and pricing strategies
Revenue per person July
Augu
st
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Janu
ary
Febr
uary
Marc
h April May June
British 2550
3187.
5
4143.7
5
5386.
875
7002.
9375
9103.
81875
1183
4.964
4
11834
.9644
1183
4.964
4
11834
.9644
11834
.9644
11834
.9644
Indian 2280
2301.
85
2992.4
05
3890.
1265
5057.
16445
6574.
31379
8546.
6079
2
8546.
60792
8546.
6079
2
8546.
60792
8546.
60792
8546.
60792
1 | P a g e

Mexican 2240
2256.
1
2932.9
3
3812.
809
4956.
6517
6443.
64721
8376.
7413
7
8376.
74137
8376.
7413
7
8376.
74137
8376.
74137
8376.
74137
Chinese 2500
2528.
75
3287.3
75
4273.
5875
5555.
66375
7222.
36288
9389.
0717
4
9389.
07174
9389.
0717
4
9389.
07174
9389.
07174
9389.
07174
Intercontinental 3000 3023 3929.9
5108.
87
6641.
531
8633.
9903
1122
4.187
4
11224
.1874
1122
4.187
4
11224
.1874
11224
.1874
11224
.1874
Revenue 12570 13297 17286 22472 29214 37978
4937
2 49372
4937
2 49372 49372 49372
Projected number of clients
for each service in a month
#REF
! July
Augus
t
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Janu
ary
Febr
uary
Marc
h April May
British 170 213 276 359 467 607 789 789 789 789 789 789
Indian 120 121 157 205 266 346 450 450 450 450 450 450
Mexican 160 161 209 272 354 460 598 598 598 598 598 598
Chinese 100 101 131 171 222 289 376 376 376 376 376 376
Intercontinental 150 151 196 255 332 432 561 561 561 561 561 561
Total 700 747.1 971.23
1262.
599
1641.
3787
2133.
79231
2773.
93
2773.
93
2773.
93
2773.
93
2773.
93
2773.
93
Cost of goods sold
#REF
! July
Augus
t
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Janu
ary
Febr
uary
Marc
h April May
British 1785 2231 2901 3771 4902 6373 8284 8284 8284 8284 8284 8284
Indian 1596 1611 2095 2723 3540 4602 5983 5983 5983 5983 5983 5983
Mexican 1568 1579 2053 2669 3470 4511 5864 5864 5864 5864 5864 5864
Chinese 1750 1770 2301 2992 3889 5056 6572 6572 6572 6572 6572 6572
Intercontinental 2100 2116 2751 3576 4649 6044 7857 7857 7857 7857 7857 7857
8799 9308 12100 15731 20450 26585
3456
0 34560
3456
0 34560 34560 34560
2 | P a g e

Expenses
#REF
! July
Augus
t
Septe
mber
Octo
ber
Nove
mber
Dece
mber
Janu
ary
Febr
uary
Marc
h April May
Marketing expenses 300 300 300 300 300 300 300 300 300 300 300 300
Administration expenses 600 600 600 600 600 600 600 600 600 600 600 600
Finance cost
833.3
33333
833.3
33333
833.33
33333
833.3
33333
833.3
33333
833.3
33333
833.3
3333
3
833.3
33333
833.3
3333
3
833.3
33333
833.3
33333
833.3
33333
Insurance 250 250 250 250 250 250 250 250 250 250 250 250
Rent 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200
Salary and wages 13600 13600 13600 13600 13600 13600
1360
0 13600
1360
0 13600 13600 13600
Depreciation 833 833 833 833 833 833 833 833 833 833 833 833
Premilinary expenses written
off 1667 1667 1667 1667 1667 1667 1667 1667 1667 1667 1667 1667
Other operaitng expenses 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Sum of expenses
20283
.3333 20283 20283 20283 20283 20283
2028
3 20283
2028
3 20283 20283 20283
Net month profit -7713 -6986 -2997 2189 8931 17695
2908
8 29088
2908
8 29088 29088 29088
As part of pricing strategy firm will follow competitor based pricing strategy and under this it will offer products to the
customers at price at which same is served by competitors to relevant entity. Firm will try to make available products of better quality
then competitors. This will help firm in beating customers in the market.
Contribution margin
Fixed cost 100000
Variable expenses 243400
Sales 429047
Contribution margin and breakeven point 1.86
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Profit projections and main aspect of financial plan(2)
2017 2018 2019 2020 2021
Revenue 429047 557762 780866 1015126 1319664
Less: Cost of goods sold 300333 278881 390433 507563 659832
Gross profit 128714 278881 390433 507563 659832
Expenses
Marketing expenses 3600 3600 3600 3600 3600
Administration expenses 7200 12248 17148 22292 28980
Finance cost 10000 10000 10000 10000 10000
Insurance 3000 3000 3000 3000 3000
Rent 14400 14832 15277 15735 16207
Salary and wages 163200 174624 186848 199927 213922
Depreciation 10000 10000 10000 10000 10000
Other operating expenses 12000 20414 28579 37153 48299
Sum of expenses 223400 248718 274452 301707 334008
PBIT -94686 30163 115981 205856 325824
Tax 0 6033 23196 41171 65165
Net profit -94686 24130 92785 164684 260659
Assumptions
 It is assumed that on yearly basis sales will increase by 30% to 40%.
 Expenses as percentage of sales will remain constant for each year.
 There is heavy demand of fast food among people and busy lifestyle is the main factor due to which people often eat fast food.
Hence, it is expected that number of customers increase will range from 10%-30% in business.
Important aspects of financial are varied items for which projection is made. Projection rate matter a lot for the managers because if
same will be wrongly estimated then in that case project cost will increase at fast rate or cash inflow can be over estimated. Thus,
while making projection due care must be taken and number of factors must be considered for estimating accurate growth rate.
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Section 3
Profit target reflect and desired returns
Profit target is to earn positive amount of profit in the busines in commencing year of operations. Every effort will be made to
ensure that targeted profit can be achieved in the business.
Identification of asset requiremnents and asset management strategy
In order to operate restaurant furnitures will be purchased and along with this utensils and cooking items will be purchased.
For managing assets on yearly basis evaluation shall be done and if it is identified that asset has not much use then it will be replaced.
Apart from this, time to time cleaning of machines will be done to enhance life of same.
Cash flow projections
Given in section 1.
Identification of capital investment requirements
Table 1Capital investment requirements
2017 2018 2019 2020 2021
Capital investment
requirements 100000 4826 18557 32937 52132
It can be observed that capital investment requirements are increasing on yearly basis at fast pace. Thus, firm may grow its business at
rapid rate.
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Budget targets
Figure 1Budget target for restaurant
Amount of expenses for each month for every expenditure that is given in budget are target for the firm in tersm of control on
expenses.
Requirements for startup finance or ongoing finance
In order to obtain finance, enterprenuer needs to submit project report to bank for evaluation and loan sanction. Projections
must be certified from CA (Sign on projected financial statements by CA, 2017). There must be clear explaination of all items. Such
things will help bank manager for better understanding business plan.
Section 4
Identification of potential sources of finance Bank loan: It is the most popular source of finance and under this there is need to present business plan in systematic manner.
By doing so loan can be obtained from bank. Retained earnings: Portion of revenue that is earned in business can be invested again in same to expand operations.
6 | P a g e

 Personal savings: Personal saving that is in bank account can be invested in business and it is cost free source of finance for
the firm.
3 Impact of financial planning on way in which buisness is managed
Financial planning have impact on way in which business is managed because under this areas where expenditures will be
made is determined. Apart from this, sources from which up to specific amount cash inflow can be observed is determined. Thus, all
expenses are made in the business within determined limit which will lead to increase in profit in business.
Cost of securing finance or effective and affordabe source of finance (4)
Sources of fnance Cost
Bank loan Cost is low for business loan
Retained earnings Opportunity cost
Personal savings No cost of source of finance
Cost of bank loan is low and due to this reason it is affordable source of finance for the business firm.
Strategies to obtain finance
In order to obtain finance from bank first of all projections will be prepared and same will be certified by CA. This is one of
the best stratregy that firm can follow in its business because certification from CA acts as guarantee that projected values are correct
and business is viable.
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REFERENCES
Books and Journals
Sign on projected financial statements by CA, 2017. [Online]. Available through:< http://www.caclubindia.com/forum/sign-on-
projected-financial-statements-by-ca-248834.asp>. [Accessed on 29th July 2017].
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