FINANCIAL DECISION MAKING Executive Summary Roast Ltd

FINANCIAL DECISION MAKING

Executive Summary
The research study shows that Roast Ltd has been very successful in the year 2017 with the
number of sales of £2022000 in the same year and £2534000 in the year 2018. The “profit
before interest and tax” also raises from the fiscal year 2017 to 2018. Many types of planning
are done to make the "merging and acquisition" to be successful with Starbucks Ltd.
Therefore the Company execute a plan for merging with "Starbucks Ltd". There are many
types of "tools and techniques" which are used for analyzing the reports based on different
types of financial aspects generated in the UK markets.
The section of “industry review" comprises the correctness of financial performances which
has been calculated for the performance of the Company in the "the financial year of 2017-
2018". The right use of the tools has been interpreted and analyzed in this section for the
better result
The business analysis section comprises different methods of investment appraisals which
have been mostly used to detect several performances based on the investments done in the
country like “Romania”.
The “investment appraisal section” is mostly dependent on different types of approaches that
are used for financial analysis of Roast Ltd. It is also able to measure the strengths of Roast
Ltd for “mergers or prospective acquisition” done with Starbucks Ltd.
The source of finance sections is based on the decision by Starbucks to enquire Roast Ltd by
the process of supporting analysis from the various types of reports from business
developments. The Bank loans are also provided to the Company for financial support and
run the business in the market smoothly.
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Table of Contents
Part 1: Industry Review..............................................................................................................4
Part 2: Business Performance Analysis......................................................................................4
2.1: Statement of Profit and Loss...........................................................................................4
2.2: Statement of financial position........................................................................................6
2.3: Statement of Cash Flows.................................................................................................7
Cash Positions........................................................................................................................7
Part 3: Investment Appraisals.....................................................................................................8
3.1 a) Management Forecast...................................................................................................8
3.1 b) Investment Appraisal techniques..................................................................................8
Payback periods......................................................................................................................8
Accounting Rate of Return.....................................................................................................9
Net present value....................................................................................................................9
3.2) Sources of Finance........................................................................................................10
Bank Loans...........................................................................................................................10
Venture Capitalist..................................................................................................................11
Recommendation......................................................................................................................12
Reference list............................................................................................................................13
Appendices...............................................................................................................................15
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Part 1: Industry Review
The research study mainly focuses on the process of reviewing the industry in various ways
which can evaluate the performance of the Company. There are various types of roles that are
conducted for analyzing the performance of the Company, and the competitiveness role
played between these companies (Dale and Plunkett, 2017). The research has taken place for
the retail business of the coffee houses present in the UK market. The chain of the coffee
house has been identified which is present in the markets of the UK. There are some specific
roles that have been played by Brexit which provide some final outcomes that are based on
the economic breakdown of many countries present in the same retail chain of business. The
number of companies which are affected by Brexit are 500 companies. The branded
Company like "Starbucks Ltd" is also affected and provides good "products and services”
throughout the world sector with more than 90 retail outlets present in the current period
(Schaltegger, and Burritt, 2017). There are a few challenges that are faced by the coffee house
industry are listed below:
● The number of competitors present in the market has increased
● The growth of the financial conditions of this coffee house sector has decreased to 6%
in the year 2016-2017.
● Some proposes are provided by Brexit of some dangers and threats to these sectors
● The danger arises mainly due to “mergers and acquisitions”.
● Some Fluctuations occurred in the specific market situation as per the current
economic status.
● There can be huge changes in the customer segments due to the traditional aspects.
Part 2: Business Performance Analysis
2.1: Statement of Profit and Loss
This statement of any company mainly helps to evaluate the analysis of the Company's
performance. The analysis of "statement of profit and loss" is evaluated in the financial year
of 2017 and 2018. Many ratios have also been analyzed for evaluating the performance of
"Roast Ltd". The business that has been conducted by these companies is considered to be
running a reputed business with a brand name in the market (Zardari et al. 2018). Capitals are
invested in the business for the return of profits. Through the collection of profit, a huge
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