Financial Decision Making

Financial Decision Making

Contents
EXECUTIVE SUMMARY.........................................................................................................................4
MAIN BODY..............................................................................................................................................4
Part 1. Industry Review:..............................................................................................................................4
Part 2. Business Performance Analysis:......................................................................................................5
2.1 Analysis of profit and loss account statement....................................................................................5
2.2 Statement of financial position:.........................................................................................................7
2.3 Statement of Cash flow....................................................................................................................10
Part 3. Investment Appraisals:...................................................................................................................14
3.1 a Management forecast....................................................................................................................14
3.1 b Investment appraisal technique:...................................................................................................15
3.2 Source of finance.............................................................................................................................16
REFERENCES..........................................................................................................................................18

EXECUTIVE SUMMARY
Financial decision-making refers to a systemic procedure that contributes to choices about
the obligations, securities and stock funds of the organization (Baker and Ricciardi, 2014). The
study summarizes the evaluation of Roast Ltd's financial reporting and some other fiscal details,
the UK cafe franchise, with the intention of assisting Starbucks in choice-making on the takeover
of this cafes chain. The research also discusses various methods to portfolio valuation, including
reporting dividend yield, NPV and pay-back period, thus keeping in mind the drawbacks and
advantages of these methods in Roast Ltd sense.
MAIN BODY
Part 1. Industry Review:
• Cafes Coffeehouses or retail sector includes combined unlicensed company dealing in the
distribution of coffee including cold beverages as well as other beverages.
• Growth in the sector is influenced by both financial and social factors, like rises in average
annual average income, preferences for coffee shops across alternative social media, or rising
competitive pressures for coffee flavors and suppliers.
• The industry has expanded greatly during the last few years, guided by enhanced expectations,
as coffee cultivation became more popular amongst buyers
• Market revenues are expected to enhance from 2019-20 to about £6.6 billion at an exacerbated
annualized of 4.8 per cent over five years, plus 1.9 per operating profits over the present year.
• Multiple challenges are also facing the market, including the formation of more direct
replacement drinks turn leads to a decrease in national commitment to coffee.
• The greatest benefit for this industry is the expansion of its companies into separate companies
such as China, India, in which the workforce is massive (Boyle, 2013).
• The Caffe Nero Group, Costa Limited, Pret-A-Manger and others are businesses with either the
total market dominance across the UK in this economy.