5BUS1156: Fit-cook Business Plan Analysis, Recommendations, and KPIs

This report provides a comprehensive analysis of Fit-cook Limited's business plan, focusing on its performance in the diet meal box industry. The report begins with an executive summary outlining the company's objectives, which is to meet the growing demand for healthy food in the UK. The analysis section delves into Fit-cook's current business operations, including its sourcing strategies, operational activities, and the launch of a mobile application to facilitate online ordering. A key component of the report involves a detailed financial review, where various ratios, including profitability, liquidity, capital structure, and efficiency ratios, are calculated and assessed using financial data from 2016 to 2019. The analysis highlights the company's financial strengths and weaknesses, such as improvements in net profit margin and return on equity, as well as areas needing attention like liquidity. Furthermore, the report offers advice on key performance indicators (KPIs) such as revenue per client and client retention rates. The report also explores a new business opportunity, and concludes with recommendations for Fit-cook’s future strategies. The report is a valuable resource for understanding the company’s performance and potential for growth.

Running head: BUSINESS PLAN
BUSINESS PLAN
Name of the Student
Name of the University
Author Note

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Table of Contents
Executive summary....................................................................................................................2
Analysis of the current business.................................................................................................3
Advice on the key performance indicators.................................................................................7
Analysis of the new business opportunity..................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................11
Appendix..................................................................................................................................14

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Executive summary
The aim of the report is to assess the business prospect of Fit-cook limited, which is a
private limited company located in the Hannah close region of Wembley. The organisation is
engaged in the delivery of diet plan meal boxes which are made with the intention to give
more focus on providing hygienic and healthy food to its clients. The company is formed with
the main objective to capture the growing demand of healthy and hygienic food in the United
Kingdom. In addition to its high quality food the organisation also launched a mobile
application from which the customers can easily place their order and can get their food at any
place wherever they want.
The demand of the retail food industry is in favourable condition since the last five
years, in the recent days people become more conscious about their health and become more
aware about their food habit. The operators of the food sector will also get the opportunity of
the recent scandals that occurred in this sector due some fraudulent activity of some
restaurants which includes supply of food of inferior quality. The consumers have to suffer
from various diseases that make them more aware about the food that they want to consume
and they started to give more importance to buy foods only from such outlets that can assure
them hygienic as well as healthy food at an affordable price. This creates a huge demand in
the retail food store industry and many entrepreneurs get interested to start a food store with
the mission to serve the best quality food staff to the customers. In addition to the supply of
high quality of foods the demand for food delivery through online applications has also
accelerated the growth rate of this industry. With the increase of then consumers priority on
hygienic and healthy food increased the growth rate of revenue has also increased rapidly
which creates a huge opportunity for the newly formed food outlets which are ready to
provide food that can meet the basic requirement of the consumers. It is expected that this

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industry will enable to generate a revenue growth of 3.40% in the current fiscal year with a
total value of 841.10 million.
The future growth prospect of the industry is also impressive and within next five
years this industry will provide huge profit earning opportunity to the locally operated food
outlets or restaurants. Fit cook is also formed with the mission to grab these opportunity and
become one of the leading supplier of best quality food in United Kingdom.
Analysis of the current business
The fit cook is a newly formed fast growing company that is engaged in the business
of supplying diet meal box for customers who are highly conscious about their health and
want to maintain a fit life style by consuming foods that are specially prepared for keeping
people fit and healthy (Muranko et al 2017).
The business is formed in the year 2012 by Louis and Rishi who were college friend
and both in nutrition and food science which encouraged them to open a food outlet with the
aim to supply highly nutritional as well as hygienic meal boxes to the health conscious
customers. At the initial stage they hire 3 buyers which assist them to source products and in
designing the menu. Later on Kayden a marketing and website designing specialist along with
a company secretary Sofia joined the business. Gradually the co mpany hire 16 more
employees for the sales and administration team and for the distribution centre it hire more 20
people. From 2016 the company launched a mobile application from which the customers will
be able to place order through their mobile and can get their orders at the address mentioned
in the order (McKeever 2016).
Operational activity

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The company used to source its products from different parts of the world, and create
customised eating plans and used to offer subscription packages of different rates which the
customers can select as per their budget, and can become a member of the organisation. The
company also concerned about the legal aspects of the business and for that reason they have
registered their business with the trademark act and make brand of their own so that no other
company can make wrong use of their name and provide inferior products to the customers.
The subscription box is only available in the united nations and the products are sourced
globally particularly from Italy (35%) ,US(10%) China (10%) and from India which provides
(10%) of the total value. the balance amount is sourced from the local market of United
Kingdom (Welch Swaffield and Evans 2018).
Financial review
Different ratios of the company are assessed to evaluate the actual financial condition
of the business and for that reason a five years financial data analysis has been done from the
financial statements provided by the business. The different ratios that are calculated to
measure the financial prospect and strength of fit cook limited are, profitability ratios,
liquidity ratios capital structure ratio and the efficiency ratio (Porter 2018).
Profitability ratios
From the profitability ratio it will be possible to evaluate the profit earning capacity of
fit cook and to estimate how much return it can provide to its shareholders. The ratios that are
assessed to evaluate the profit generating capacity are stated below
Net profit margin
It is the main indicator of the profit generating ability of their organisation from its
operational activities, the higher the net profit margin the better it is for the organisation. In

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the case of fit cook it has been observed that the NP margin of this organisation is 0.40 and
0.51 in the year 2016 and 2017 which indicates that the company fail to operate effectively in
these years as fit cook fail to generate profit due to lack of control in the costs of operation in
the initial stage but the organisation make significant improvement in the year 2018 and
achieve 49.88% and 38% of net profit margin this indicates that after the launch of the mobile
application the company able to increase its revenue and also able to control the cost of
operation (Ibidunni Peter and Ogbari 2017).
Return on equity
Then return on equity is the indicator of the ability of the company to return to its
shareholders on the wealth that they have invested in the company. it is expected that the
shareholders will expect that they will get some additional value on their invested amount and
if any organisation fail to provide good return on the invested amount then the shareholders
will lose their interest from such company, so higher the return on equity the better it is for the
organisation . in the present case of fit cook the return on equity in the initial stage is in
negative figures which indicates that the company performed very poorly in the years 2016
and 2017 but with the increase in its profit margin the return on equity also improved to 147%
which shows that fit cook has the potential to provide high return to its shareholders and in the
future with the increase in the demand of its product it can be expected that the company will
give high return to its equity shareholders (Leyman and Vanhoucke 2017) .
Liquidity ratios
The liquidity ratios are used to measure the liquidity position of the company from
which it can meet its short term obligations. The higher the liquidity ratio the better it is for
the company. In the food supply industry a high liquidity ratio is very essential as it has to
settle the short term obligations of the suppliers. The suppliers always like to check the

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liquidity condition of the company so that they can get ensured that they will get back their
money within time and this also keep the operation of the organisation in flow as they will get
raw materials from the suppliers on time. Fit cook Limited’s quick ratio in the year 2016 and
2017 is 0.05 and 0.08 which indicates that the liquidity condition is not good and the company
has to allocate more liquid assets but in the year the company is able to generate more revenue
and for that reason the quick assets like cash or bank increase3d and for that reason the quick
assets ratio also increased to 1.46 and 7.49 in the year 2019(Berbegal-Mirabent Gil-Doménech
and Alegre 2016).
Current assets ratio
The current assets ratio of the company in the year 2016 and 2017 is 0.50 and 0.70
which is below the average industry level which is 1. So in this regard it can be said that the
company’s current assets is less than its current liabilities and it may not be able to meet its
short term obligations in these two years, but the situation changes in the year 2018 and by
increasing the current ratio up to 2.65 and 9.90 in the year 2019 the company make huge
improvement and this imp0rovement can help the organisation to attract more suppliers (Noch
and Kusto 2018).
Capital structure ratios
This ratio is used to determine the proportion of debt to equity in the capital structure
of the co company. In general it is expected that a company with low percentage of debt in its
capital structure is more risky than a organisation which have high portion of equity in its
capital structure. to analyse the capital structure the debt to assets ratio is assessed and in case
of fit cook limited it has been observed that in the year 2016 and 2017 the debt to assets of the
company is high which is 1.44 and 1.35 this indicates that the company has to take more debt
to operate its activities while in the year 2018 the company is able to reduce its dependency on

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debt and reduce the debt to assets ratio to 0.66 and furher reduce to 0.25 in the year 2019
(Brinckmann, et al 2017).
Debt to equity ratio
As the company is mainly funded by Louis and rishi they kept the debt to equity ratio
at a fixed point of 3.00 in the last three years. This indicates the shareholders does not increase
their portion of equity neither they take further long-term debt from the market (Hopp and
Greene 2018).
Efficiency ratio
The efficiency ratio is used to measure the efficiency of the management in controlling
their affairs and how effectively they convert their receivables in to sales. In the restaurant
business as there is less scope of providing credit to customers so the receivable ratios in the
three years is 100% (Filimonau and Gherbin 2017).
Another efficiency ratio that has been calculated in this regard is the fixed assets to
turnover ratio, this ratio indicates the efficiency of the management in generating revenue
from its fixed assets (Davidson et al 2018).
Advice on the key performance indicators
The key performance indicator in the food industry are the following
 Revenue per client
 Client retention rate
 Profit margin
 Average daily attendance

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From the analysis of the entire business of the fit cook it can be advised to the
management that from the perspective of the revenue per client the organisation have to take
more initiatives to increase its revenue margin per client as the food industry is highly
competitive in nature it can be predicted that a new entrant can emerge in the market and
capture the market so more active initiatives should be taken by the management to increase
its revenue per client (Xue et al 2017).
Client retention rate
The client retention rate is not satisfactory the company has to make more
improvements in the initial stage due to poor client retention the company fail to make profit.
This is area of concern and the company has to take aggressive marketing strategy to increase
its client retention rate (Wen and Zhu 2019).
Profit margin
In the years 2016 and 2017 the company’s profit margin is very poor this happen due
to ineffective management of the operating cost and failure to attract more customers.
However the company make huge improvement in the year 2018 and increase its profit
margin to more than 100%. This performance has to be maintained in the coming days and the
management has to be more conscious about controlling the increasing trend of the cost of
operations (Ribeiro et al 2018).
Average daily attendance
After 2016 the average daily attendance of the company increased significantly and the
company also started to get more order through the mobile app. The management should also
give more focus in increasing the physical attendance of the customers by giving attractive
offers and discounts if they visit the outlet of the food outlet (Fernie and Sparks 2018).

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Analysis of the new business opportunity
The prospect of the new business is very impressive which can be easily detected from
the result of the net present value of the company. The most important factor that is essential
to measure for evaluating the prospect of business is its net present value. If the net present
value is positive then it can be said that the business is feasible and the management can make
investment in the business. A positive net present value indicates that after considering the
discounted factor of the estimated cash inflow if the value of such cash inflow exceeds the
value of the initial cash outlay or the investment made by the management in the initial stage
then it will be profitable to do the business. This indicates that the business have the capacity
to give more return to the investors than the investment that they made (Peymankar and
Ranjbar 2019).
In this case after considering the discounted factor which is calculated, on the basis of
the weighted average cost of capital, on the cash inflows it can be observed that the total cash
inflow after the end of the 8th year and there by adding the residual value is more than the
initial investment of 2500000. This indicates that there is high potentiality in the business and
in the future it will be possible to generate good amount of profit from the same (Kashyap
2019).
The process of the discounted cash flow is that the cash flows of the company is
discounted back to the present value by applying the PV factor and thereby try to find out
what is the value of these cash flows in the present days. The total of all these cash flows that
are discounted back to the present value and that is considered as the net present value of the
company (Creemers 2018).
Confirmation statement

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It is confirmed from the project appraisal that as the net present value of the project is
positive it will be viable to make investment in this business.
Conclusion
From the above discussion it can be said that fit cook with its unique and innovative
business strategy will be able to capture the highly potential market of hygienic food supply.
The organisation having a highly qualified management team like Louis and rishi who have
adequate knowledge about food nutrition has make it possible for the business to understand
the current demand of the market and produce menu that will attract the health conscious
people of united kingdom. In addition to that the marketing team of the company also
anticipated that the demand for food delivery will increase in the future and if they can launch
a mobile application from which the customers can place their order and get tier meal
packages in tier door step it will keep them above all the other market participants, and with
this idea they have launched the mobile application in the year 2016 and the decision turned
out to be a major success for the company as after the launch of the mobile application the
volume of revenue increased rapidly and fit cook achieve its financial success since then. With
the major improvements made by the efficient management of the company it is expected that
the company will be able to achieve sustainable growth in the coming days also.

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References
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Analysis and the Wealth Creation Process: A Case Illustration. The Accounting Educators'
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Berbegal-Mirabent, J., Gil-Doménech, D. and Alegre, I., 2016. Improving business plan
development and entrepreneurial skills through a project-based activity. Journal of
Entrepreneurship Education, 19(2), p.89.
Brinckmann, J., Dew, N., Read, S., Mayer-Haug, K. and Grichnik, D., 2019. Of those who
plan: A meta-analysis of the relationship between human capital and business planning. Long
Range Planning, 52(2), pp.173-188.
Creemers, S., 2018. Maximizing the expected net present value of a project with phase-type
distributed activity durations: an efficient globally optimal solution procedure. European
Journal of Operational Research, 267(1), pp.16-22.
Davidson, J., Halunga, A., Lloyd, T., McCorriston, S. and Morgan, W., 2016. World
commodity prices and domestic retail food price inflation: some insights from the
UK. Journal of Agricultural Economics, 67(3), pp.566-583.
Evans, E.W. and Evatt, R.L., 2018. A Narrative Review of Food-Safety Research Studies of
Professional Food-Handlers in Catering and Manufacturing Environments. Focus, 80, p.120.