Financial Decision Making

Financial Decision
Making

Table of Contents

Executive Summary
The Project report defined that the industry of cafe is plays essential role with objective
that efficiently evaluate efficiency of business in Roast Ltd. As per the study summarises that
comprehensive analysis and analysis efficiency of entity which is helping to generate and
improve financial performance in present time as compare of previous year. The objective of the
presentation evaluation of Roast limited which is advised to Starbucks UK in decision of acquire
by Roast Ltd. The profits and loss statement present of the company that get net profit in the year
2017 & 2018, 36000 & 81000 respectively. The financial position analysis by total assets and
liabilities which is increasing in 2018 as compare of 2017. There is identified the facts of
approximately 25483 store as well as outlets in United Kingdom.
MAIN BODY
Part 1. Industry Review
As per the study, it is mentioned that UK coffee house industry is conducting different
things like:
 The primary possibility have UK coffee industry is to enhance their business operations
crosswise the countries and develop relation with the them. There are mainly focus those
countries where more consumption of coffee such as China and Asian countries.
 The whole UK coffee shop market generate about 10.1 billion and in UK there are
approximately 25483 store as well as outlets.
 In this industry identified different challenges that faced by them like Brexit, Financial
crisis, labour and property cost.
 In present time coffee shop sector has been risen about 7.9% per annum from last two
decades. But turmoil developed by Brexit economic volatility tends to cut off the sector.
 Branded coffee shops gained a strong development which is approx 8.7% that means
8149 stores during year 2018. Moreover, in the year 2019, the resilience of UK market is
a critical issues of particular industry (Cafe Industry: UK. 2019).
 In the year 2018, coffee shop industry come out to be troubled by continual confusion in
case of UK's future dealings with EU. In the last 18 months political statements has
supported to increase interest towards employment shortfall, accretive cost and
expending, wearing name holding.
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 Coffee industry generated gross value added in UK has been increasing every year. Such
as in 2016 it was 3298 million pound but in 2018 increase by 3707 million.
 Enhancing cost of house holding and see impact of Brexits.
Part 2
2.1 Analysis of profit and loss account statement
Every organisation prepare financial statements in order to present financial position
where consist of profit & loss statement, cash flow statement and balance sheet. The income
statements plays significant role to present profitability of the organisation. When total
expenditure less than to revenue than will be profit and more than so will be net loss. In this
statement consist of all non operating and operating expenditure to derive for net profit in certain
period of time. Evaluation of corporation's income statement supports to analysis that how
performance of the business increase and generate net profit after deducting all the business
expenditure. For this analysis set structure which is utilised to determine total cost system and
the performance of an organisation. The profitability level assess by the company in particular
financial period (Agarwal and Mazumder, 2013).
Roast limited organisation produce profit and loss account so revenue of the organisation
increase in the year 2017 and 2018 from 2022 to 2534 million pounds which is about 25.32%
growth. The production cost increase in 2017 & 2018 from 1055 million pounds to 90 million
pound (about 32.23% growth). In the year 2018 operating revenues of corporation identify about
60,000. While operating cost rose in the year 2017 by 466000 to 477000 in 2018. From the
amount of revenues less cost of sales and gain gross profit of the company which was 517 in year
2017 but increase 544 in year 2018. from gross profit less amount of other operating income that
arise in mid year in 2018 about 60 and less also operating expenses and get amount of operating
profit which is 51 in 2017 but increase in 2018 reached on 127. presenting ups & down of Roast
Ltd in respective manner and it is identified that in 2018 generate more net profit with compare
2017. In 2018 had about 81000 in 2017, 36000 (149 percent grew), reflecting an improvement in
total profitability.
To assess the actual financial position calculate ratio which is beneficial for efficient
interpretation of the business income statement. Ratio supports to understand the results of the
organisation by assessing the key ties of different aspects end-to-end on e or more period of
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