Financial Decision Making

Financial Decision Making

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
Part 1: Industry Review...................................................................................................................1
Part 2: Business Performance Analysis...........................................................................................2
2.1 Statement of Profit or Loss...................................................................................................2
2.2 Statement of Financial Position............................................................................................4
2.3 Statement of Cash Flows.......................................................................................................6
Part 3: Investment Appraisal and Sources of Finance.....................................................................8
3.1 Investment Appraisal............................................................................................................8
3.2. Sources of Finance.............................................................................................................10
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
Financial decision can be defined as the process in which all the decisions associated
with stake holder's equity and liability of business entity along with issuance of bonds. In Roast
Limited, the P&L statement depicts that the net profit of firm in year 2018 is 81000 pounds
which raised from £36000. This increase in profits of firm shows that this company's product
demand is high which assists in its growth and development in market. The business entity has
the ability to pay its debts even though it is facing problems because of paying more for
procuring high quality coffee beans. The company's cash position depicts that it is confronting
issue of negative cash flows but, because of its constantly improving growth rate, it can be
conclude that firm can acquire Roast Ltd. The second part of project depicts that Roast Ltd.
must make investment in launching project of new outlets in Romania as this will contributes in
enhancing sales revenues as well as cash position of company.
Part 1: Industry Review
In today's competitive business environment, the coffee house industry is one of the
fastest growing sector in United Kingdom which is developing constantly because of current
social status of people in UK. By utilizing top line review, the summary of coffee house industry
is mentioned below:
As per the survey performed by ibis, the total revenue of £6 billions has recorded in
coffee house sector of UK. In this industry, the main players includes Café Nero, Starbucks, Cafe
Ritazza, Costa coffee etc. All these organisations are performing well in sector and an yearly
growth of 6.1 percent has recorded that depicts the success of industry (Correia, Dussault, and
Pontes, 2015). In the cafe coffee industry of United Kingdom, there are around 16199
businesses are operating which has been raised with the improving rate in comparison to the
last year. Various opportunities are exist in coffee house market that can be exploit by refereed
firm such as introducing organic coffee which is beneficial for the health of people. This
opportunity can help company in satisfying the needs of customers of being healthy and gaining
competitive advantage in market (Current coffee house industry of United Kingdom. 2019).
Besides the above mentioned opportunities, some challenges are some challenges which
the coffee house industry of United Kingdom faced. These challenges involves changing needs
of customers as they are becoming more aware regarding their health and prefers to have healthy
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