Financial Insights and Business Intelligence - Yum! Brands Project 1 Essay

This essay discusses Yum! Brands' project idea of setting up an all vegan restaurant in Asian countries. It includes projected financial statements for the next 5 years, financial plan, and analysis of the project's viability through payback period and gross profit margin.

Financial Insights and
Business Intelligence -
project 1 Essay

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PROJECT IDEA..........................................................................................................................3
FINANCIAL PLAN....................................................................................................................4
FINANCIAL ANALYSIS...........................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business growth plans are one- to two-year descriptions of where a firm wants to be in the
following year or two. The progress policy should be planned in such a move that it agrees to
each sector. The organisation may look back at what targets were fulfilled and what goals were
missed at the conclusion of each quarter (Tipu, 2018). The business chosen for the following
report is Yum! Brands. The following report highlights how the business chosen in the report is
looking for growth prospects. The selected growth prospect is then analysed in detail. Its
projected cash flow statement, balance sheet statement, profit and loss statement is presented
following the interpretation about how profitable the growth prospect of the business is.
MAIN BODY
Yum! Brands, Inc. is a drive-thru eatery chain. YUM Restaurants China, YUM Restaurants
International, Taco Bell USA, KFC USA, Pizza Hut USA, and YUM Restaurants India are the
organization's six functional areas. It makes, works, establishments, and licenses a worldwide
eatery framework that plans, bundles, and sells a menu of sensibly evaluated food things. Every
one of the organization's ideas has its own menu things and spotlights on the development of
cooking utilizing an assortment of items, as well as plans and unmistakable flavors, to make
engaging and phenomenal dinners (Götz, 2020). Feast in, carryout, and drive-through or
conveyance are on the whole accessible in its customary cafés. Express units and booths, which
have a more restricted menu and work in modern areas, for example, shopping centers, air
terminals, fuel administration stations, train stations, trams, general stores, arenas, carnivals, and
universities, are among the organization's contemporary units, which are fundamentally
authorized outlets. Yum! Brands was laid out in 1997 and is situated in Louisville, Kentucky.
PROJECT IDEA
A business project is one that is intended to achieve a specific business objective. Carrying out
another overall record framework, for instance, may be the objective of an IS or IT project. It is a
business project since it intends to accomplish a business objective (the new broad record
framework). The business project is intended to achieve a particular goal of the organisation.
This goal may or may not help th business in increasing its profits but is required by the business
for different reasons.

The company chosen in this report is Yum! Brands. The project idea of this business is one
which is critically made, after detailed analysis of the current conditions of the business and
keeping in mind Covid-19 pandemic.
The business is planning to take up a project specifically in the Asian countries. The business is
planning to set up an all vegan restaurant in the Asian countries (Gassner, 2021). The restaurant
will provide new type of food products which will be produced using vegan products. The
demand for vegan products has increased in the past 6-7 years after researchers have found the
worse impacts of production of diary products and use of animals in producing foodprodcts. The
main aim of this business unit will be to reduce these worse impacts on the environment and
produce ethically. The Asian market is chosen up due to the lack of vegan businesses in the
market. Even though the idea is new in the market, the advertising of the business would make it
a huge success. Asian market has developed more healthy and progressed demands in the
consumption of goods after the covid-19 pandemic. The time period of the establishing this
project is a great decision. The business project will require an amount of fresh capital of
$1000000. This amount will be used in the different processes to make the business idea work.
The company chosen does not have much competitors in the Asian markets who deal in vegan
products. There are businesses who have similar products but their reach is small and they does
not pose any potential threat on the new start-up. The current plan will be beneficial for the
company as this will bring a new face in the Asian market by dealing in the vegan products.
FINANCIAL PLAN
A monetary arrangement is an archive that contains data on an individual's present monetary
circumstance, long haul monetary objectives, and strategies for accomplishing those objectives.
A monetary arrangement starts with an intensive evaluation of an individual's present monetary
circumstance and future objectives, and it tends to be grown autonomously or with the help of an
affirmed monetary organizer. An overview of a company's financial needs or future goals, as
well as how to meet them. Corporate financial planning entails determining which investments
and activities are best suited to the company's specific and larger economic situations (Schwafert,
2021). When all other factors are equal, short-term financial planning includes less risk than
long-term financial planning because market patterns are more predictable in the short run.
Short-term financial plans are also easier to change if something goes wrong. Following are the
projected future financial plans for the new idea that the Yum! Brands will be taking up. The

following plan is dereived from the available information related to the Asian markets and the
price of the raw materials which will be required to establish a vegan product restaurant among
the Asian market.
PROJECTED INCOME STATEMENT FOR THE NEXT 5 YEARS
START
YEAR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
GROSS SALES 600000 800000 850000 900000 976000
100000
0
Beginning Inventory 2000
add: Purchases 450000
Total goods available for
sale 452000
less: ending inventory 12000
less: cost of sales 359000 569000 579000 500000 529000 500000
gross profit 81000 231000 271000 400000 447000 500000
gross profit margin 28.875
31.8823
5
44.4444
4
45.7991
8 50
salaries 1800 2000 2560 3000 2900 3450
repairs and maintenance 200 150 100 175 160 240
rents 150 75 120 230 160 260
taxes and licensees 260 100 190 130 120 110
depreciation 100 80 120 100 135 125
advertisment 10 13 12 10 20 19
automobile and travel 70 65 75 70 85 65
insurance 50 55 65 70 45 60
legal charges 30 35 23 36 67 45
misc 20 21 25 20 18 28
supplies 15 10 13 16 20 18
utilities 25 22 26 25 19 29
telecommunication 40 42 45 48 50 52
presentation expenses 20 22 25 28 30 33
total operating expenses 2790 2690 3399 3958 3829 4534
Net Income 78210 228310 267601 396042 443171 495466
balance at the start of year 350
net income for the year 78560 228310 267601 396042 443171 495466
net profit margin
28.5387
5
31.4824
7
44.0046
7
45.4068
6 49.5466
Projected Cash Flow Statement for the next Five Years
year 1 year 2 year 3 year 4 year 5
net income 228310
26760
1
39604
2
44317
1
49544
6

add: depreciation 80 120 100 135 125
less account recievables 250 280 300 270 290
add account paybles 150 120 140 160 190
inventories
140 130 150 160 130
Cash Flow From Operating Activities 228150
26743
1
39583
2
44303
6
49534
1
Assets purchased/sold
Cash Flow From investing Activities
Capital investment
100000
0
venture capital funds received
100000
0
Cash flow from Financing Activities
200000
0
Opening Cash balance 150 180 130 200 260
Ending cash balance
222830
0
26761
1
39596
2
44323
6
49560
1
Projected Balance Sheet for the Next Five Years
START
YEAR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Cash at bank 200 150 180 130 200 260
inventories 2000 140 130 150 160 130
accounts receivables 170 250 280 300 270 290
current assets 2370 390 410 450 430 420
fixed assets 84980
123691
0
127700
1
140583
2
145548
6
151026
1
accumulated depreciation 20 80 120 100 135 125
net fixed assets 84960
123683
0
127688
1
140573
2
145535
1
151013
6
TOTAL ASSETS 87330
123722
0
127729
1
140618
2
145578
1
151055
6
account payables 120 150 120 140 160 190
current liabilities 120 150 120 140 160 190
venture capital investment
100000
0
100000
0
100000
0
100000
0
100000
0
long term liabilities
100000
0
100000
0
100000
0
100000
0
100000
0
TOTAL LIABILITIES 120
100015
0
100012
0
100014
0
100016
0
100019
0
capital stock preferred
additional paid in capital 9000 8760 9570 10000 12450 14900
add net income 78210 228310 267601 396042 443171 495466
TOTAL STOCKHOLDERS' EQUITY 87210 237070 277171 406042 455621 510366

TOTAL LIABILTIES & STOCK HOLDERS
EQUITY 87330
123722
0
127729
1
140618
2
145578
1
151055
6
FINANCIAL ANALYSIS
Monetary investigation is a method for assessing the exhibition and suitability of firms, projects,
uses, and other monetary activities. Monetary examination is generally used to analyze whether a
business is steady, dissolvable, fluid, or sufficiently serious to legitimize a money related
speculation (Peters-Destéract, 2020).
The project taken up by the Yum! Brands will now be analysed using the costs and the
investments in the business.
Profit:
The profit that the business idea is projected to earn in the initial year is around 78500. The
business is planning to make these profits go vast in the coming years of the plan. The plan is all
set to be a success and by the 5th year the profit of the business from this idea will reach 400000.
The projected financial statements of the business are showing profits for the business if they
take up the project of vegan restaurant. This project can be seen a viable one as the profits of the
business ensures better demand for the products and settled client base in the Asian market after
the covid-19 pandemic (Murage, 2019).
Payback Period:
The payback period is the time it takes to reimburse the underlying expense of a venture. It is
how much years it will take for a venture's underlying speculation to be recovered. Subsequently,
as a capital arranging technique, the restitution time will be utilized to investigate projects and
lay out the quantity of years it will take to return the underlying expense. The project with the
shortest duration is usually picked.
Following is the calculation of payback period of the project taken up by Yum! Brands.
Year Cash Flow Cumulative Cash flows
Initial Year -1000000 -1000000
1 228310 -7,71,690
2 267601 -5,04,089
3 396042 -1,08,047
4 443171 3,35,124

5 495466 8,30,590
Payback Period = 3 + (1,08,047 / 443171)
= 3 + 0.24
= 3.24 or 3 years and 2 Months
The above calculation of the payback period of the business plan shows that the business will be
earning back its initial investment paid for the project in 3 years and 2 months which is a great
time period as the business will earn mostly all of its cost spent in spend and may use these funds
into other growth aspects. The return of the business can be seen as good hence the project can
be called as a viable one and the business may plan on investing in the same.
Gross Profit Margin:
The gross profit margin is a metric that reflects how efficient a company's manufacturing or
production process is. After subtracting the company's cost of products sold, it tells managers,
investors, and other stakeholders what proportion of sales income is left (Aller De Las Casas,
and Ortiz Calvo, 2018).
The gross profit margin of the business project can be seen in a increasing trend in the 5 year
projected profit statement. The business is able to foresee 50% gross profit margin in the 5th year
which is a good sign for the business as it can save 50% of its revenue for the other operating
costs and eventually rise net profit margins of the business.
CONCLUSION
From the above-mentioned report, it can be seen that the business plans different growth aspects
for its enterprise which helps the business to rise its overall profits and create an image in the
market place. The report highlighted the business plan of Yum! Brands to open up an all-vegan
restaurant in the Asian market as the aftereffects of the covid-19 pandemic can be seen to raise
the safety and health measures of the consumers. The detailed business plan has been discussed
followed by required capital and the projected financials of the business for 5 years.

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