Financial Analysis of Red Robin Restaurant

This report covers the financial analysis of Red Robin Restaurant, including cash flow, break-even analysis, and final accounts. It also analyzes the legal obligations that impact small enterprises.

Unit-29

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Activity 1.....................................................................................................................................3
Covered in Brochure....................................................................................................................3
Activity 2.........................................................................................................................................3
INTRODUCTION...........................................................................................................................3
P4. Interpret the monthly cash flow for annual year with fixed and variable cost to set beside
income..........................................................................................................................................3
P5. Assess Break-Even Analysis for a business administration..................................................6
P6. Give relevant final accounts for organisation that relates to success....................................6
P7. Analyse the lawful obligation which impact small enterprise...............................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurs should have to focus on analysing customer needs and wants and based on that
produces products that can satisfy their expectation. It is imperative for business to analyse
customer demand and frame strategies which leads company towards attainment of objectives
(Bratton and et al., 2021). In addition to that, rapid change of customer demand creates difficulty
for business in analysing trends and in implementation of strategies. It is human tendency to
choose quality product but by paying minimum price. This project report is based on Red Robin,
a restaurant located in Yakima, Washington and United States. It will cover forecasting as well
as allocating resources that are being opted by organisation in order to accomplish objectives.
Along with this, it will also cover CRM along with different methods of developing enterprise
trans nationality by analysing pros and cons.
TASK
Activity 1
Covered in Brochure
Activity 2
INTRODUCTION
The core aim of executives of company is to frame strategies so as to compete with its
competitors along with attaining organisational goals effectively and efficiently. The company
chosen for this project report is Red Robin, an American restaurant situated at United States.
This project report will cover cash flow and fixed and variable cost. Further, it will cover
Breakeven analysis and final accounts of company. At last, it will cover legally obligations
which may impact on company’s performance.
TASK
P4. Interpret the monthly cash flow for annual year with fixed and variable cost to set beside
income
Scalable enterprise- This type of business enterprise may be referred as newly established
business that aims at tapping to international market by framing competitive strategies so as to
generate higher profits. The management of red Robin tries to expand its business operations so

as to boost sales and attract new customers for opting their services at low cost. It will help
company in attracting potential customers by providing quality services at low cost. It creates
obstacles for company at global level and this issue can be addressed by understanding
competitor’s strategy (Osotimehin., 2019).
Sources of finance for scalable business- There are various sources of finance that company may
opt in order to remain sustainable in competitive market. It is imperative for company to
optimally utilise its resources in an effective manner that contributes in further capital
generation. Red Robins invests in Foreign Direct Investments so as to generate more capital.
Following are some sources of funds that company may opt in order to expand its business
operations.
 Bank Loans- It is most commonly used alternative sued by many company when it
wishes to expand its business operations. Company may take bank loans and may settle
interest rates by generating high profit margins from loan amount.
 Personal savings- Company may re-invest its personal savings in form of retained
earnings for expansion of business.
 Funding from relatives and peers- Company may also borrow money from its relatives
and peers. This will help in expansion of company and interest rate is lower in this case.
Thus, this alternative is opted by many companies.
 Hire Purchase method- The management of company focus on hire purchase method on
which it can enhance brand positioning and expand its operations (Stewart and Brown,
2019). In addition to that, it also facilitates in improving brand image of company among
customers. Company can generate higher profit and can remain stable in unfavourable
circumstances.
Cash Flow statement – It may be referred as the methods opted by mangers to assess inflow
and outflow of cash transactions from operating, investing and financing activities (Stone,
Cox and Gavin, 2020). By assessing all the activities, company can maintain cash record and
may track its monetary activities. It is important for business to analyse cash flow as it will
help company in mitigating activities that incur high cost but dot not contribute in generation
of higher revenue. In addition to that, company can boost its profitability by controlling over
cash.

P5. Assess Break-Even Analysis for a business administration
Budget- it may be defined as the estimation of expenses produced by executives of companies in
order to forecast sales volume. It will help company in eliminating risk of shortage and
overstock. Management of Red Robins focus on maximising sales volume by forecasting future
demand based on previous data. Company can minimise its overall cost by framing of effective
budget which could lead company towards higher efficiency.
Break-even Analysis- It is the situation in which company do not earn profit and nor bear loss. It
is the situation of no profit/no loss. It will help company in identifying number of units to be sold
to achieve breakeven. It becomes easier for company to analyse number of units to be sold to
attain organisational objectives. Once identified required units, company can frame effective
strategies so as to attain objectives. The management of red Robin has implemented this
alternative so as to analyse future demand and required number of unites to sold for achieving
success.
P6. Give relevant final accounts for organisation that relates to success
Financial statements of Red Robins- This statement is used to assess performance if company
and to make necessary alteration in its strategies. In addition to that, it will also help in taking
effective decision which can enhance company’s brand image as well as in generating more
profit. Financial statements help in evaluating current financial position which can be found
beneficial for external and internal stakeholders of company. Red Robin wants to increase their
revenue and minimising outflow of cash in unnecessary activities. By restricting activities which
do not contribute in generation of capital, should be eliminated. It also assists in remaining
competitive in dynamic business environment.
Working capital- This capital is used to operate day to day functions and makes it smoother to
meet short term obligations of company. It is imperative for company to utilise this capital in
most effective and efficient manner so that competitive advantage can be taken. Company
emphasize on enhancing current assets by utilising its available capital in most effective manner
(Chit, 2019). By this, company can run its business smoothly and can attain objectives in a time
frame period.

Components of working capital
 Cash management- The management of Red Robin emphasize on managing its cash
transactions by allowing inflow of cash and restricts on cash outflow. It will help
company in generating more revenue.
 Receivable management- Company regularly manages its Bills Receivables so that it can
manage its funds from debtors and to utilise in most effective and efficient manner.
 Inventory management- It is important for every company to manage its inventory so
that it becomes easier to fulfil demand of customers. It will also help company in
forecasting of future needs.
P7. Analyse the lawful obligation which impact small enterprise
Legislations are enacted that demonstrates what a company is adhere while operating its
business functions. It is important for company to comply with all laws and legislations
framed by government so as to prevent from penalties (Santangelo and Meyer, 2017).
Government may impose penalties if not complied with laws and legislations. In addition
to that, there are various legislations which are adhere by small business enterprises.
Government may take action if these laws are not complying with. It is needed for
company to look after employee’s wellbeing and to provide all essentials for its safety so
as to avoid injuries at workplace.
Social enterprise- It refers to the ability of managers to enhance societal welfare by
donating funds. It may serve food, clothes, shelter to needy people. Red Robins also
donates and contributes fraction of profit in charity and fort welfare of people. Following
are some laws and legislations which an organisation needs to comply with.
 Record keeping Act, 2006- In this act, company have to keep records of each and
every business transaction for audit purpose. It will help company in making
decision which leads to higher profitability.
 Payment of Wages Act, 2005- Under this act, employees are to be paid as per
their skills and expertise in that field (Pornupatham and et al., 2022). Company
complies with minimum wages act and do not discriminate in terms of salary.
 Cyber security measures- Customer’s information is crucial for every business
and Reb Robin take measures so as to protect their data from cyber-attacks.

 Company law,2013- Under this law, company have to prepare their financial
statements as per latest guidelines of Company Act,2013. It is applicable for all
types of business and have to comply with this law.
If company do not comply with these laws and legislations, then government may
impose penalties and this will impact on performance and productivity of
company.

CONCLUSION
From the above project report, it was concluded that management of compa y have to frame
effective strategies so that competitive advantage can be attained and to generate higher profits.
In addition to that, it will las help company in achieving success and in elevating brand image of
company. Cash flow statements helps in analysing inflow and outflow of cash by which
company can take effective decision to restrict on unnecessary activities. By implementing
breakeven analysis, company may get to know about required number of units to be sold for
achieving breakeven. Along with this, there are various legal obligations that needs to be comply
by company so as to avoid penalties. It is important for company to follow all rules and
regulations framed by government.

REFERENCES
Books and Journals
Bratton, J., Gold, J., Bratton, A. and Steele, L., 2021. Human resource management. Bloomsbury
Publishing.
Chit, M.M., 2019. Financial information credibility, legal environment, and SMEs’ access to
finance. International Journal of the Economics of Business, 26(3), pp.329-354.
Deo, P., 2016. Evaluating a cash flow statement. International Journal of Business, Accounting
and Finance, 10(1), pp.22-43.
Dominguez, N. and Mayrhofer, U., 2017. Internationalization stages of traditional SMEs:
Increasing, decreasing and re-increasing commitment to foreign markets. International Business
Review, 26(6), pp.1051-1063.
Osotimehin, S., 2019. Aggregate productivity and the allocation of resources over the business
cycle. Review of Economic Dynamics, 32, pp.180-205.
Pornupatham, and et al., 2022. The Effect of Cash Flow Presentation Method on Investors’
Forecast of Future Cash Flows. Management Science.
Prodanova, and et al.,2019. Methodology for assessing control in the formation of financial
statements of a consolidated business. International Journal of Recent Technology and
Engineering, 8(1), pp.2696-2702.
Santangelo, G.D. and Meyer, K.E., 2017. Internationalization as an evolutionary process. Journal
of International Business Studies, 48(9), pp.1114-1130.
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.
Stone, R.J., Cox, A. and Gavin, M., 2020. Human resource management. John Wiley & Sons.
Vagner, I., 2020. Importance of break even point analysis. In Актуальные вопросы
бухгалтерского учета, анализа и аудита в инновационной экономике (pp. 87-91).
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