Beans Coffee: Financial Plan Analysis and Budgeting Report (2018-2020)

This report provides a detailed financial analysis of Beans Coffee, a family-owned business aiming to expand its retail and wholesale coffee operations. The analysis includes a review of projected income statements, balance sheets, and cash flow statements for the years 2018-2020. It assesses projected incomes, expenses, and asset positions, identifying variances and providing reasons for them. The report also examines the company's cash flow, identifies potential financial problems and risks, and offers recommendations for financial and budgetary controls. The analysis considers various assumptions, including a constant GST rate and the company's investment capacity. The report includes a project budget, budgeted income statement, and budgeted balance sheet, offering insights into the company's financial health and its expansion strategy. The analysis concludes with recommendations for effective budgeting and market analysis to ensure the company's success in a competitive market.

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Managing Budget and Business Plan
8/16/2019
(Student Name)

Managing Budget and Business Plan 1
Table of Contents
Introduction......................................................................................................................................2
Purpose of Budget............................................................................................................................2
Project Details..................................................................................................................................2
Timeline.......................................................................................................................................2
Cost..............................................................................................................................................3
Project Budget.................................................................................................................................3
Budgeted Income Statement........................................................................................................3
Budgeted Balance sheet...............................................................................................................5
Budget Assumption and Consideration...........................................................................................6
Monitoring of Project Expenses......................................................................................................6
Budget Evaluation Process..............................................................................................................7
Contingency Plan.............................................................................................................................7
Strategy for Financial and Budgetary Controls...............................................................................8
Recommendations and Conclusion..................................................................................................8
References......................................................................................................................................10

Managing Budget and Business Plan 2
Introduction
Beans Coffee is one of the owned small companies that distribute its coffee beans to other coffee
shop across Australia. The company is planning to expand its business through retailing as well
as whole selling businesses. Therefore, in the following part there will be detailed analysis of the
budget that is required for expanding the business.
Purpose of Budget
The main purpose of the budget is to forecast the income that will be occur in the future as well
as the expected expenditure that will be required for expanding the business. Moreover, its will
be used for decision making related to the finance, from which source the fund will be raised and
the amount that is required to be raised from the market. Furthermore, it is also used to monitor
the performance of the business in an effective and efficient manner (Junita et al., 2018).
Project Details
Project Team Key Task
Marketing Team It will manage whole marketing and promotional related activities
Research Team Such team will analyze the market and analyze the demand of product
Finance Team The team will manage the funding related activities
HR team It will manage hiring related activities to enhance the sales activities
Sales Manager It will manage whole sales related activities

Managing Budget and Business Plan 3
Timeline
Activities July August September October
Novembe
r
Social Media Marketing
Email Campaigns
Market Research
Email Campaigns
Mobi Communications
Affiliate Advertising
Exhibitions
Sponsorship
Sales Promotion
Banner Advertising
Agency strategic
Review

Managing Budget and Business Plan 4
Cost
Operating Expenses 2020
Additional Staff 55000
Business Visit 35,000
Image Rebranding 20000
Company Website 25000
POS Software 50000
Staff Training 15000
Expansion Expenses 50000
Sports Sponsorship 30000
Total Operating Cost 280000
Fixed Cost
Additional Floor Space 148750
Capital Investment 54000

Managing Budget and Business Plan 5
Total Fixed Cost 202750
Total Cost 482750
Project Budget
Budgeted Income Statement
Period ended 31st march
2018
Period ended 31st march
2020
Sales Revenue
$
185,000,000.00
$
185,000,000.00
Cost of sales
$
184,200,000.00
$
184,200,000.00
Gross profit
$
800,000.00
$
800,000.00
Sundry Income
$
87,500.00
$
87,500.00
Freight Outward
$
(11,750.00)
$
(11,750.00)

Managing Budget and Business Plan 6
Rent Received
$
92,100.00
$
92,100.00
Gain/loss on sale of party
equipment
$
25,000.00
$
25,000.00
Gain on Investment
$
30,000.00
$
30,000.00
Inventory Write-down Exp
$
(15,000.00)
$
(15,000.00)
Director fees
$
(20,000.00)
$
(20,000.00)
Audi Fees
$
(52,000.00)
$
(52,000.00)
Freight Inward
$
(5,750.00)
$
(5,750.00)
Insurance
$
(20,000.00)
$
(20,000.00)
Import Duties
$
(2,000.00)
$
(2,000.00)
Depreciation $ $

Managing Budget and Business Plan 7
(120,000.00) (120,000.00)
Bad and doubtful debt
expense
$
(5,000.00)
$
(5,000.00)
Business Visit
$
(35,000.00)
Image Rebranding
$
(20,000.00)
Company Website New
$
(25,000.00)
Staff Training
$
(15,000.00)
Expansion of Catering
Business
$
(50,000.00)
Sports Sponsorship
$
(30,000.00)
New POS Software System
$
(50,000.00)
Other administrative
expenses
$
(100,000.00)
$
(100,000.00)

Managing Budget and Business Plan 8
Employment Cost
$
(3,500.00)
Sales staff wages
$
(250,000.00)
$
(250,000.00)
Add: Additional Hiring
$
(55,000.00)
Donations
$
(10,000.00)
$
(10,000.00)
Advisory Fees
$
(35,000.00)
$
(35,000.00)
Loss on Discounted
Business
$
(35,000.00)
$
(35,000.00)
Earnings before interest
and tax
$
353,100.00
$
69,600.00
Interest Paid mortgage
$
(112,240.00)
$
(112,240.00)
Interest paid - overdraft
$
(5,290.00)
$
(5,290.00)

Managing Budget and Business Plan 9
Dividends paid on ordinary
shares
$
(50,000.00)
$
(50,000.00)
Dividends paid on
preference shares
$
(18,400.00)
$
(18,400.00)
Profit or loss before Tax
$
167,170.00
$
(116,330.00)
Less: GST @10% -11633
Profit or loss after Tax
$
(104,697.00)
Budgeted Balance sheet
Beans Coffee Shop
Fiscal year ends in June. USD in
millions except per share data.
2018 2019
Assets
Current assets

Managing Budget and Business Plan 10
Cash
Cash and cash equivalents
$
3,500.00
$
3,500.00
Total cash
$
3,500.00
$
3,500.00
Receivables
$
35,000.00
$
35,000.00
Inventories
$
358,800.00
$
358,800.00
Prepaid expenses
$
3,500.00
$
3,500.00
Shares in New Zealand Company
$
60,000.00
$
60,000.00
Allowance for Doubtful Debt
$
1,700.00
$
1,700.00
Total current assets
$
462,500.00
$
462,500.00
Non-current assets

Managing Budget and Business Plan 11
Property, plant and equipment
Land
$
1,900,000.00
$
1,900,000.00
Additional Floor Space
$
148,750.00
Warehouse
$
953,000.00
$
953,000.00
Accumulated Depreciation (Ware
House)
$
(350,000.00)
$
(350,000.00)
Party equipment for hire
$
640,000.00
$
640,000.00
Purchase new Coffee Machine
$
54,000.00
Accumulated depreciation – Party
equipment
$
(40,000.00)
$
(40,000.00)
Investment
$
360,000.00
$
360,000.00
Net property, plant and equipment
$
3,463,000.00
$
3,665,750.00