Financial Analysis of Food and Beverage Industry

This assignment involves analyzing the financial performance of a company in the food and beverage industry. The student is required to prepare a set of financial statements, including a balance sheet, income statement, and cash flow statement, for a fictional company called 'Capit Retai'. The statements are presented in a table format with specific details such as assets, liabilities, equity, revenues, and expenses. The assignment also requires the student to provide references from relevant books and journals, online resources, and patents related to the food and beverage industry.

FOOD AND BEVERAGE
MANAGEMENT

EXECUTIVE SUMMARY
The present report is based on Food and beverage industry involves in processing raw
materials, packaging and distribution of commodities and services. The main aim of food and
beverage manager is to maintain the service continuously. Furthermore, this report has conducted
the business plan with terms to open a bakery that serves pancakes with different flavours &
toppings in Stratford station in London.
However, business plan has been framed with covering following key points as business
description, market analysis, organisation management, sale strategies, funding requirement and
financial projection.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................1
BUSINESS DESCRIPTION........................................................................................................1
Market analysis............................................................................................................................2
Organizations management- .......................................................................................................4
Sales strategies ............................................................................................................................4
CONCLUSION................................................................................................................................6
Appendix..........................................................................................................................................7
REFERENCES..............................................................................................................................13

INTRODUCTION
Food and beverage is an industry that providing service as to deliver the desire
commodity to their customer at the particular location such as hotel and restaurant (Clinton and
Whisnant, 2019). Therefore, it plays vital role in terms to keep customers happy and also ensures
smooth operational function on daily basis.
It is the firm that is responsible for maintaining the high quality of food and services,
costing of foods, management of the restaurants and bars etc. Managers of food and beverage
forecasts, plans and controls the ordering of food and beverage.
Hence, the present report is based on conducting food and beverage management report
in terms to open a bakery that serves pancakes with different flavours & toppings in Stratford
station in London. Thus, name of the enterprise has chosen as "High on flavours".
Furthermore, business plan will cover the following things as business description,
market analysis, organisation management, sale strategies, funding requirement and financial
projection.
BUSINESS DESCRIPTION
"High on flavours" will be created to serve pancakes with the different flavours &
Topping in start-ford London. It will provide unique varieties of pancakes of high quality and all
will be backed fresh to keep great taste.
Therefore, immediate object of firm is to achieve long term success. Long term goal of
company will be inclusive of the offering of whole products of bakery within one year of setting
up the operations. Funding for the bakery will be done from personal savings and that will aid to
cover start-up cost. Hence, there will be three employees, first will look over the customers and
their orders. Second, will focus over the preparation of orders as per customer needs. Third, will
avail at counter and deal with the billing procedure. Hence, owner will start their business their
own. It defines as that organisation creates, delivers and captures values so that systematic
working can be conducted.
The staff member of this bakery are professionally experienced. They have innovative
ideas to prepare an excellent pancake with use of high quality equipment and ingredients. In
order to ensure, the feedback will be taken for knowing the satisfaction level of customers,
monthly questionnaire will be carried out.
1

Henceforth, it will be located near the start-ford station of London. Thus, interior of
bakery will be with modern wooden decor and unique slogan that whole will convey the quality
of served beverages and aids to gather the attraction of customers. Thus, set up will be done with
luxury requirements of people so that they can relax and enjoy their pancakes with unique and
high quality offering. Therefore, the retail industry of bakery products will show the tremendous
growth as there is huge for socialisation and entertainment.
Variety- No other bakery yet existed in market that can provide unique variety of flavours. It
will be helpful to gather the attraction of the customers (Davis and et.al., 2018).
Expansion- It will be first chain near the start-ford station in London that will have the similar
demographic profiled and significant traffic. This area will also have lot of tourist gathering and
passengers.
Mission- Aims to offer the high quality pancakes with the unique flavours in order to meet the
demand of the middle and upper income people. Thus, high quality offering at the affordable rate
is the main object to attract customers.
Market analysis
The market of Bakery products in London is at the enormous growth. Thus, number of
small bakers are appearing at an increasing rate (How to Write a Market Analysis, 2019).
Therefore, bakery goods production gets done with the products as bread, cakes, rolls, pastries,
baguettes and muffins etc. Hence, operating conditions of this firm will get influenced with
increasing number of health consciousness, increased interest in the provenance of food and
fluctuation of the wheat prices (Higbie and et.al., 2018). Thus, market analysis is as-
Demographic and segmentation- It is crucial to identify the size of market. Thus, start-ford
station is the huge area that gathers a lot of crowds to have good customer approach. Hence,
tourists will be the potential customers, passengers, youngsters etc.
Target market- The dominant target market for the firm as High on quality will be regular
steam of passengers, youngster and tourists. Hence, personal and expedient customer services at
the affordable price rates will be the key to maintaining the local market share of this target
market.
Market need- It can be true to said that London is having huge global tourist attraction. It is the
largest city and has a temperature oceanic climate with the warm summer and cool winters. So,
lot of bakery product are very much in demand (Long, Looijen and Blok, 2018). At the time of
2

winters, the pancakes will be very much in demand. By introducing the new commodities in the
market with providing high quality of the commodities at the affordable price rates will be core
insight of attracting the customers. Therefore, this core factors will be helpful to have positive
growth in business.
Competition- It is crucial to identify the rivalries in market. Thus, Bakery industry in UK has
shown the tremendous growth. Hence, it can be done with the help of SWOT analysis as-
Strength-
 It will be the first bakery that will
produce the commodity near the start-
ford station in London.
 The firm will have professional
experienced and trained chefs.
 This firm will cater the needs of
customers by providing excellent
customer service.
Weakness-
To arrange funds, becomes typical to take loan
from legal authorities as it is very time
consuming process.
The entity will be new in market so it will take
the time to gather the attraction of the
customers.
To have the baking product from outside the
country will cause some transportation charges.
Opportunities-
 This firm will come up with the unique
ideas of pancakes flavors, this will
provide the core opportunities to gather
the attraction of the customers.
 It will be operated at the growing part
of the London.
 Thus, with help of providing the
excellent product to the customers aids
to boost the public image of the
enterprise.
Threats-
 It is the industry that demanded for
healthy, convenient and indulgent
products.
 Therefore, prominent trends of health
has discouraged from buying traditional
white loaves (Long, Looijen and Blok,
2018).
 There are huge chances of increment in
cost of the ingredients that will cause
charging high price of products from
customers.
Barriers to entry- It has been identified that barriers to entry for bakery industry is very low.
Hence, economies of scale are beneficial, but not adequate for enterprise success. Thus, two
main components of having success in market is that leader of firm must have the ability to
3

acquire sufficient distribution channels to cover operating cost and ability to build up brand
recognition and loyalty (Salim and et.al., 2018 Tran, 2018 ).
Organisations management-
It is a combination of many components of leadership within a company. Therefore,
actual structure of the firm is utilized to collect information and analyze it. Hence, organization
structure of "High on flavors" will consist of general manager that will be the owner of himself.
It will be the organization of flat structure. Therefore, he is the responsible person who works as
to maintain and review the operation system of "High on life". It allows to have idea that how
customers feel about the services given by the firm.
Baker will manage and organize kitchen operation and he will be the responsible tohave
sustainability in maintaining food inventory and also have assistance in menu development.
Hence, assistant manager and senor server will be a salaried employee who can able to provide
table service as well as assistance to the general manager (Weber, 2019). At the firm, two
attendants will help in taking the orders and also serving the customer with ordered coffee, baked
goods and espresso.
However, part-time personnel will be hired in terms to handle the serving and to conduct
the functions like dis-washing. Market and accounting department will be handled by the
consultants or independent contractors. Thus, an additional manager will be hired in terms to
maintaining and reviewing operational functions of the bakery firm. Hence, organization
management of the business needs to be able to make the decision and resolves issues with terms
to be both effective and beneficial.
Sales strategies
It is an approach that deals with the selling that allows an enterprise sales force to
position the firm and its commodities (Marketing and Sales Plan Section of Your Home Business
Plan, 2017). Hence, it kind of road-map that business implements to generate leads and sales
product and services with positive brand awareness. However, sales plan will include the
following as-
Target customers- High on Flavours will choose the middle and upper income markets. It is the
market segment that consume majority of bakery commodities. It will b the fist who will work as
to cater the needs and want of the customers by providing the different flavours. Hence, target
market will also be tourist, local resident, passengers and tourist etc.
4

Revenue target- To conduct the sales, it is crucial to have sales forecast for three consecutive
years. Therefore, it will be shown in table in following manner as-
Sales forecast
In UK (£)
Year 1 Year 2 Year 3
Sales
pancakes 15000 18000 19000
Bakery products 10000 12000 12000
Total sales 25000 30000 31000
Year 1 Year 2 Year 3
Direct cost of sales
Pancakes 2200 1500 2800
Bakery products 1300 2500 2000
Subtotal direct cost of
sales
3500 4000 4800
Strategies and tactics- The plan of action will be taken so that firm can able to sales its
commodities in market effectively. In order to enhance the taste and attraction of customers,
High on Flavours will have the use of different flavours so that customer can get attracted with
the unique flavours of commodities. In order to enhancement in sales, the firm will provide
discount offers and combo services so that they can able to gather the attraction of customers.
Therefore, sales staff will be trained in terms to have enhancement in sales.
Pricing and promotion- "High on Flavours" should have the use of price skimming or
penetration pricing strategy for the new and innovative products. Entity that uses this strategy
will typically set prices of product at the competitive rates. Thus, price skimming is the strategy
that sets the relatively high rates for the commodities at the initial level then after a stipulated
time firm reduces the price for product.
5

Promotional strategy refer as to make the repeat customers at the firm. There are some
method for promoting new product and service as advertising, digital marketing, sales
promotions and public relations. This marketing strategy for website will attempt to develop
awareness for the product and services within market.
CONCLUSION
This can be summarized that that Food and beverage industry is inclusive of all kind of
processing raw materials, packaging and distributing food items. Therefore, report has covered
the business activities to open a bakery that serves pancakes with different flavours & toppings
in Stratford station in London.
Thus, name of firm has selected as "High on Flavours". Furthermore, report has covered
business plan with covering components as business description, market analysis, organisation
management, sale strategies, funding requirement and financial projection so that all activities
can be formuated in better and efficient mode.
6

Appendix
Cash flow forecast-
Enter your full
name
Ke
y:
Enter your
company name
These cells
auto-
calculate
and are
locked so
you can't
edit them.
Enter date
Insert your
own
text/numb
ers into
these cells
as
relevant.
Select your
starting month:
MONTHS
Cash in-flows Description (as
required)
Start
ing
point
1 2 3 4 5 6 7 8 9 10 11 12 TOTA
L
Anticipated sales £0 £30 £3 £3 £3 £4 £4 £5 £5 £6 £7 £7 £8 £6,41,
7

,00
0
3,0
00
6,3
00
9,9
30
3,9
23
8,3
15
3,1
47
8,4
62
4,3
08
0,7
38
7,8
12
5,5
94 529
Value of your
Start Up Loan
£1,00
,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a £1,00,
000
Other sources of
cash or equity
£4,00
0
£5,
500
£5,
63
8
£5,
77
8
£5,
92
3
£6,
07
1
£6,
22
3
£6,
37
8
£6,
53
8
£6,
70
1
£6,
86
9
£7,
04
0
£7,
21
6
£79,87
6
Existing assets
for business
purposes
£4,00
,000
£1,
200
£1,
23
0
£1,
26
1
£1,
29
2
£1,
32
5
£1,
35
8
£1,
39
2
£1,
42
6
£1,
46
2
£1,
49
9
£1,
53
6
£1,
57
5
£4,16,
555
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Total cash in-flows (A) £5,04
,000
£36
,70
0
£3
9,8
68
£4
3,3
39
£4
7,1
45
£5
1,3
19
£5
5,8
96
£6
0,9
17
£6
6,4
26
£7
2,4
71
£7
9,1
06
£8
6,3
89
£9
4,3
84
£12,37
,959
MONTHS
Cash out-flows Description (as
required)
Start
ing
point
1 2 3 4 5 6 7 8 9 10 11 12 TOTA
L
Cost of sales £0 £1,
500
£1,
55
0
£2,
00
0
£2,
50
0
£2,
70
0
£2,
80
0
£2,
70
0
£2,
80
0
£2,
90
0
£2,
50
0
£2,
40
0
£2,
30
0
£28,65
0
Existing assets
for business
purposes
£4,00
,000 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £4,00,
000
Rent or premises
costs
£0 £1,
500
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£1,
50
£18,00
0
8

0 0 0 0 0 0 0 0 0 0 0
Business rates
for your business
premises
£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Utilities (gas,
electricity,
water)
£0 £50
0
£5
00
£5
00
£5
00
£5
00
£7
00
£8
00
£4
50
£4
50
£5
00
£6
00
£6
50 £6,650
Insurance £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Telephone and
internet £0 £30
0
£3
00
£3
00
£3
00
£3
40
£3
50
£3
50
£3
60
£3
60
£3
70
£3
70
£3
90 £4,090
Marketing and
advertising
expenses
£0 £70
0
£7
70
£7
50
£7
20
£7
30
£7
30
£6
50
£6
70
£5
60
£7
00
£5
60
£5
60 £8,100
Vehicle running
costs £0 £70 £1
00
£1
50
£1
20
£1
40
£1
30
£1
40
£1
50
£1
20
£1
30
£1
20
£1
20 £1,490
Equipment
purchase or
leasing
£0 £2,
000
£7,
00
0
£0 £0 £0 £0
£5,
00
0
£0 £0
£5,
60
0
£0 £0 £19,60
0
Postage,
printing,
stationery
£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Transport and
delivery £0 £45
0
£5
50
£6
70
£3
40
£4
50
£5
50
£5
60
£4
50
£5
67
£3
45
£6
70
£3
50 £5,952
Professional fees
(legal,
accounting etc.)
£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Your salary (if
PSB is in
deficit)*
n/a £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Your salary
(over and above
n/a £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
9

your PSB
needs)*
Staff costs £0 £50
0
£5
60
£5
40
£5
00
£4
50
£4
00
£4
50
£4
00
£3
00
£3
50
£5
60
£5
60 £5,570
Start Up Loan
monthly
repayment*
n/a £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Enter other £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
Total cash out-flows (B) £4,00
,000
£7,
520
£1
2,8
30
£6,
41
0
£6,
48
0
£6,
81
0
£7,
16
0
£1
2,1
50
£6,
78
0
£6,
75
7
£1
1,9
95
£6,
78
0
£6,
43
0
£4,98,
102
Your net cash
flow (A-B)
£1,04
,000
£29
,18
0
£2
7,0
38
£3
6,9
29
£4
0,6
65
£4
4,5
09
£4
8,7
36
£4
8,7
67
£5
9,6
46
£6
5,7
14
£6
7,1
11
£7
9,6
09
£8
7,9
54
£7,39,
857
Your monthly
opening
business bank
account
balance
£0
£1,
04,
000
£1,
33,
18
0
£1,
60,
21
8
£1,
97,
14
7
£2,
37,
81
2
£2,
82,
32
0
£3,
31,
05
6
£3,
79,
82
3
£4,
39,
46
9
£5,
05,
18
3
£5,
72,
29
3
£6,
51,
90
2
£7,39,
857
Your closing
cash position
£1,04
,000
£1,
33,
180
£1,
60,
21
8
£1,
97,
14
7
£2,
37,
81
2
£2,
82,
32
0
£3,
31,
05
6
£3,
79,
82
3
£4,
39,
46
9
£5,
05,
18
3
£5,
72,
29
3
£6,
51,
90
2
£7,
39,
85
7
£7,39,
857
10

Balance sheet
Balance Sheet
Date: 01/04/19
Comp
any: Example Ltd.
Addre
ss: 100 Industry Lane
Birmingham
B1 1BB
11

Assets
Liabili
ties
Curre
nt
Assets
Curre
nt
Liabili
ties
Cash £7,39,857.00
Accou
nts
payabl
e £16,000.00
Accou
nts
receiv
able £30,000.00
Accure
d
Wages £450.00
Invent
ory £6,700.00
Accure
d
Compe
nsation £500.00
Temp
orary
invest
ment £5,600.00
Incom
e
Taxes
Payabl
e £16,000.00
Prepai
d
expens
es £5,660.00
Unear
ned
Reven
ue £450.00
Any
Other
Liabili
£4,000.00
12

ties
Total Current Assets £7,87,817.00
Total Current
Liabilities £37,400.00
Fixed
Assets
Long-
term
Liabili
ties
Proper
ty and
Equipt
ment £2,10,000.00
Mortg
age £2,00,000.00
Lease
hold
Impro
vemen
ts £20,000.00
Other
long-
term
liabiliti
es £10,000.00
Equity
and
other
Invest
ments £3,00,000.00
Total Long-Term
Liabilities £2,10,000.00
Less
accum
ulated
deprec
eation £20,000.00
Share
holder
s'
Equity
13

Capital
stock £-
Retain
ed
earnin
gs -£9,583.00
Total Net Fixed
Assets £5,50,000.00
Total Shareholders'
Equity -£9,583.00
£2,37,817.00
Total
Liabili
ties £2,37,817.00
Total
Assets
and
Equity
14

REFERENCES
Books and Journals
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business. Springer, Dordrecht.
Davis, B and et.al., 2018. Food and beverage management. Routledge.
Higbie Jr, J.A and et.al., 2018. Blend plan optimization for concentrated consumable products.
U.S. Patent Application 10/026,043.
Long, T.B., Looijen, A. and Blok, V., 2018. Critical success factors for the transition to business
models for sustainability in the food and beverage industry in the Netherlands. Journal of
cleaner production, 175, pp.82-95.
Long, T.B., Looijen, A. and Blok, V., 2018. Critical success factors for the transition to business
models for sustainability in the food and beverage industry in the Netherlands. Journal of
cleaner production. 175. pp.82-95.
Salim, H.K and et.al., 2018. Evaluating the organizational intention to implement an
Environmental Management System: evidence from the Indonesian food and beverage
industry. Business Strategy and the Environment. 27(8). pp.1385-1398.
Tran, D., 2018. Service Quality in Food & Beverage business in Metropolitan area.
Weber, C., 2019. Operational Efficiency in the Food and Beverage Industry Through Sustainable
Water Consumption.
Online
Marketing and Sales Plan Section of Your Home Business Plan. 2017. [Online] Available
through : <https://www.thebalancesmb.com/writing-a-business-plan-1794231>
How to Write a Market Analysis. 2019. [Online] Available through :
<https://www.liveplan.com/?pasc=liveplan_ad_impact_2019_articles>.
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