Financial Management: City Brassserie's Cost Analysis & Strategies

This presentation provides a financial analysis of City Brassserie, a local restaurant planning to open a new establishment. It delves into the cost elements, including direct materials, direct labor, overheads, and fixed costs, determining a cost of £15.50 per unit and a fixed cost of £5 per unit. The analysis identifies a profit of £3.1 per unit based on a selling price of £18.6, resulting in a 20% profit margin. Strategies for enhancing gross profit are explored, such as optimizing pricing, managing supplier relationships, and preventing theft. The presentation also highlights the importance of effective management, stock taking, and cash control, recommending measures like enhanced security, lockers, CCTV cameras, and guard services to safeguard the company's assets. The presentation concludes with a list of references, providing a comprehensive overview of the financial considerations for City Brassserie's new venture.

HOSPITALITY
MANAGEMENT Student’s Name
University Name

INTRODUCTION
This presentation would present about
the new business of City Brassserie.
This presentation has been presented
to analyze the various sources through
which the cost and the position of the
comapny could be analyzed. In the
given case, a local restaurant wants to
open a new restaurant and for that
various new strategies and policies
have been made to enhance the
business.

CURRENT OPERATIONS
 According to the case, City Brassier want to
open a new restaurant and for that the
operations and the policies are required to be
set by the comapny. Further, the cost and
other elements are also important for a
business.
 According to the evaluation over case, it has
been found that the following would be the
cash position of the new restaurant:

COST ELEMENTS

COST OF THE CITY BRASSSERIE’S
NEW RESTAURANT:
 According to the evaluation, it has been
found that the cost of the new restaurant
would be as follows:

COST ELEMENT
Cost element are the elements which make an
impact over the total cost of the comapny.
The cost elements are required to be
evaluated by the company to enhance the
business performance and evaluate the total
profit of the comapny.
Direct material, direct labour, overheads, fixed
cost etc are the main cost element of a
company (Bromwich and Bhimani, 2005).
In case of City Brassier, cost elements has
been discussed in the next slide:

COST ELEMENT
 Through the above statement, it has been
found that the cost of the comapny is £ 15.50
per unit.
 And the fixed cost of the company is £ 5 per
unit.
 Further, the total prime cost of the comapny
is £ 8 per unit.
 And the profit of the company is £ 3.1 as the
total selling price is £ 18.6 per unit.
 The total profit % of the comapny is 20% on
total cost of the company.

HOW TO ENHANCE THE GROSS
PROFIT
Gross profit is the total profit which is earned
by a company through selling the products or
providing the services to the clients. The
formula of the gross profit is as follows:
Gross profit = Revenue – Cost of goods sold
(Brigham and Michael, 2013)
Gross profit could be enhanced by a company
through making the changes into the
variable cost of the company or through
altering the policies of the comapny.

CONTINUED:
In case of City Brassier, the gross profit could be enhanced
by the comapny, through using the following methods:
1. Figure out the total gross margin
2. Analyse the profit margin
3. Increase the prices
4. Review the prices
5. No discounting
6. Don’t compete on pricing
7. Take cash discount from suppliers
8. Prevent theft
9. Watch supplier bills
10. Use inventory system (Davies and Crawford, 2011)
These techniques would assist the comapny to enhance the
business.

MANAGEMENT OF THE COMPANY
Further, the management of the
company has also been analyzed as it
makes an impact over the position and
the performance of the company. All
the departments of the comapny are
required to be managed by the
department head properly so that the
performance of the company could be
enhanced.

STOCK TAKING
 Stock taking is a physical verification
of the inventory and the condition of
the inventory. This procedure is done
by the management to analyze the
position of the stock in the comapny. It
manages and controls various
procedure of the comapny and assist
the manufacturing and various other
departments to make a better decision
(Deegan, 2013).

In case of City Brassiere, Stock taking is
most important element as the nature
of the business is of manufacturing
and stock plays the most important
role in that. So it becomes mandatory
for the business to manage the stock
and keep a track over the stock so that
the business could not get effected.