Financial Analysis & Forecast: Italian Restaurant Business Plan

This report presents a financial forecast for an Italian restaurant business plan, including a profit and loss statement, cash flow statement, forecasted balance sheet, break-even point analysis, and margin of safety calculation. The profit and loss statement projects revenues, material costs, direct wages, gross profit, and various operating expenses over three years. The cash flow statement details cash inflows and outflows from operating, investing, and financing activities. The balance sheet forecasts shareholders’ funds, liabilities, and assets for three years. The break-even point is calculated to determine the sales volume needed to cover all costs. The margin of safety indicates the buffer between actual sales and the break-even point. Desklib provides students with access to past papers and solved assignments for further study.

E Managing Enterprise in the
21st Century

Contents
INTRODUCTION.......................................................................................................................................................................................3
MAIN BODY..............................................................................................................................................................................................3
Profit and Loss Forecasted Statement......................................................................................................................................................3
Cash Flow Statement...............................................................................................................................................................................4
Forecasted Balance Sheet........................................................................................................................................................................6
Break-Even Point.....................................................................................................................................................................................7
Margin of Safety......................................................................................................................................................................................7
REFERENCES............................................................................................................................................................................................8

INTRODUCTION
A business plan is a document which elaborates in detail about how the business will continue its business operations and it also
states the objective and goals of the management. It also draws a map for which includes various strategies such as financial, operation
and marketing strategies of management. In the following report it is related with the Italian restaurant (Davidson III, 2018).
.
MAIN BODY
Profit and Loss Forecasted Statement.
PROFIT & LOSS FORECAST FOR THREE YEARS
Particulars
Jan
uary
Febr
uary
Mar
ch
Apri
l May June July
Aug
ust
Septe
mber
Octo
ber
Nove
mber
Dece
mber
TOT
AL
Year
2
Year
3
Sales /
Income
£
30,0
00
£
37,0
00
£
43,5
00
£
44,0
00
£
56,7
80
£
59,8
20
£
62,1
00
£
65,9
80
£
64,25
0
£
65,2
60
£
57,84
0
£
69,85
0
£
6,56,
380
£
7,50,
000
£
8,50,0
00
Less
Materials
Cost
£
5,50
0
£
5,75
0
£
5,75
0
£
4,25
0
£
6,00
0
£
6,25
0
£
615
£
675
£
625
£
635
£
635
£
675
£
37,36
0
£
8,250
£
9,750
Less Direct
Wages
£
800
£
850
£
875
£
900
£
925
£
1,12
5
£
12,5
00
£
13,0
00
£
14,50
0
£
17,7
00
£
11,00
0
£
13,00
0
£
87,17
5
£
1,40,
000
£
1,52,5
00
GROSS
PROFIT
£
23,7
00
£
30,4
00
£
36,8
75
£
38,8
50
£
49,8
55
£
52,4
45
£
48,9
85
£
52,3
05
£
49,12
5
£
46,9
25
£
46,20
5
£
56,17
5
£
5,31,
845
£
10,39
,990
£
20,49,
580

Operating
Expenses
Staff
Salaries
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,000
£
5,00
0
£
5,000
£
5,000
£
60,00
0
£
6,250
£
6,750
Staff wages
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,000
£
1,00
0
£
1,000
£
1,000
£
12,00
0
£
1,250
£
1,500
Rent &
Rates
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,150
£
2,15
0
£
2,150
£
2,150
£
25,80
0
£
2,750
£
3,150
Gas &
Electricity
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,000
£
1,00
0
£
1,000
£
1,000
£
12,00
0
£
1,250
£
1,250
Insurances
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,000
£
7,00
0
£
7,000
£
7,000
£
84,00
0
£
8,550
£
8,800
Postage &
Stationery
£
1,00
0
£
1,01
0
£
1,01
0
£
1,00
0
£
1,10
0
£
1,02
0
£
1,03
0
£
1,01
0
£
1,110
£
1,21
0
£
1,200
£
1,210
£
12,91
0
£
1,299
£
1,320
Repairs &
Maintenance
£
2,50
0
£
2,30
0
£
2,50
0
£
140
£
250
£
260
£
420
£
620
£
120
£
620
£
410
£
2,450
£
12,59
0
£
627
£
628
Travelling &
Motor
Expenses
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,000
£
1,00
0
£
1,000
£
1,000
£
12,00
0
£
1,200
£
1,200
Loan
Installment
£
12,0
00
£
12,0
00
£
12,0
00
£
12,0
00
£
12,0
00
£
12,0
00
£
12,0
00
£
12,0
00
£
12,00
0
£
12,0
00
£
12,00
0
£
12,00
0
£
1,44,
000
£
14,40
0
£
14,40
0
Telephone
Expenses
£
510
£
520
£
510
£
520
£
530
£
520
£
550
£
500
£
510
£
520
£
510
£
520
£
6,220
£
636
£
654
Professional
Fees
£
2,25
£
2,26
£
2,24
£
2,25
£
2,26
£
2,14
£
2,36
£
2,14
£
2,520
£
2,62
£
2,410
£
2,010
£
27,46
£
2,789
£
2,985

0 0 0 0 0 0 0 0 0 0
Advertising
&
Promotions
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,250
£
2,25
0
£
2,250
£
2,250
£
27,00
0
£
2,700
£
2,700
Miscellaneo
us Expenses
£
240
£
260
£
250
£
260
£
250
£
210
£
210
£
240
£
290
£
280
£
270
£
280
£
3,040
£
319
£
326
TOTAL
EXPENSES
£
£
37,9
00
£
37,7
50
£
37,9
10
£
35,5
70
£
35,7
90
£
35,5
50
£
35,9
70
£
35,9
10
£
35,95
0
£
36,6
50
£
36,20
0
£
37,87
0
£
4,39,
020
£
8,40,
140
£
16,42,
530
Net Profit
(Loss)
Before Tax
-£
14,2
00
-£
7,35
0
-£
1,03
5
£
3,28
0
£
14,0
65
£
16,8
95
£
13,0
15
£
16,3
95
£
13,17
5
£
10,2
75
£
10,00
5
£
18,30
5
£
92,82
5
£
1,99,
850
£
4,07,0
50
Cash Flow Statement.
Cash flow Statement
Particular
Jan
uar
y Feb
Mar
ch
Apr
il May
Jun
e July
Aug
est
Sept
emb
er
Oct
ober
Nov
emv
er
Dec
emb
er
Total(
Year
1)
Year
2
Year
3
A. Cash flow from
operating activities:-
Sales/Revenue
£
30,0
00
£
37,0
00
£
43,5
00
£
44,0
00
£
56,7
80
£
59,8
20
£
62,1
00
£
65,9
80
£
64,2
50
£
65,2
60
£
57,8
40
£
69,8
50
£
6,56,3
80
£
60,0
00
£
65,0
00
Payment of salary
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
5,00
0
£
60,00
0
-£
33,0
00
-£
33,0
00
Rent Paid
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
2,15
0
£
25,80
0
-£
2,59
2
-£
2,59
2
Staff Wages £
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
1,00
£
12,00
-£
12,0
-£
12,0

0 0 0 0 0 0 0 0 0 0 0 0 0 00 00
Payment of Utilities
£
2,50
0
£
2,30
0
£
2,50
0
£
140
£
250
£
260
£
420
£
620
£
120
£
620
£
410
£
2,45
0
£
12,59
0
-£
1,20
0
-£
1,20
0
Phones
£
510
£
520
£
510
£
520
£
530
£
520
£
550
£
500
£
510
£
520
£
510
£
520
£
6,220
-£
120
-£
120
Fright and postage
£
1,00
0
£
1,01
0
£
1,01
0
£
1,00
0
£
1,10
0
£
1,02
0
£
1,03
0
£
1,01
0
£
1,11
0
£
1,21
0
£
1,20
0
£
1,21
0
£
12,91
0
-£
60
-£
60
Stationary
£
1,00
0
£
1,01
0
£
1,01
0
£
1,00
0
£
1,10
0
£
1,02
0
£
1,03
0
£
1,01
0
£
1,11
0
£
1,21
0
£
1,20
0
£
1,21
0
£
12,91
0
-£
14
-£
16
Promotion and
advertisement
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
2,25
0
£
27,00
0
-£
18,0
00
-£
18,0
00
Legal Expenses
£
2,25
0
£
2,26
0
£
2,24
0
£
2,25
0
£
2,26
0
£
2,14
0
£
2,36
0
£
2,14
0
£
2,52
0
£
2,62
0
£
2,41
0
£
2,01
0
£
27,46
0
-£
50
-£
50
Transport
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
1,00
0
£
12,00
0
-£
600
-£
600
Vehicle running
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
250
-£
3,000
-£
3,00
0
-£
3,00
0
Insurance
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
7,00
0
£
84,00
0
-£
220
-£
220
£
2,50
0
£
2,30
0
£
2,50
0
£
140
£
250
£
260
£
420
£
620
£
120
£
620
£
410
£
2,45
0
£
12,59
0
-£
1,20
0
-£
1,20
0
Misc. Expense
£
240
£
260
£
250
£
260
£
250
£
210
£
210
£
240
£
290
£
280
£
270
£
280
£
3,040
-£
220
-£
220
Setup cost -£ £ £ £ £ £ £ £ £ £ £ £ -£ £ £

14,6
00 - - - - - - - - - - -
14,60
0 - -
Net cash flow from
operating activities:-
£
43,5
50
£
64,8
10
£
71,6
70
£
67,4
60
£
80,6
70
£
83,4
00
£
86,2
70
£
90,2
70
£
88,1
80
£
90,4
90
£
82,4
00
£
98,1
30
£
9,61,9
00
-£
12,2
76
-£
7,27
8
B. Cash flow from
financing activities:-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
Net Cash flow from
financing activities:-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
C. Cash flow from
Investing activities:-
Initial investment
made
£
20,0
00
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
20,00
0
£
-
£
-
Net cash flow from
investing activities:-
£
20,0
00
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
-
£
20,00
0
£
-
£
-
Total cash
inflow/outflows(A+
B+C)
£
63,5
50
£
64,8
10
£
71,6
70
£
67,4
60
£
80,6
70
£
83,4
00
£
86,2
70
£
90,2
70
£
88,1
80
£
90,4
90
£
82,4
00
£
98,1
30
£
9,81,9
00
-£
12,2
76
-£
7,27
8
Forecasted Balance Sheet.
Statement of financial Positon for the year ended
Particular Year 1 Year 2 Year 3
Shareholders’ Funds:-

Net Profit for the year ended
£
15,000.00
£
25,000.00
£
32,000.00
Capital
£
20,000.00
£
20,000.00
£
20,000.00
Non-Current Liability:-
Long term liabilities -
£
10,000.00
£
25,000.00
Current Liability:-
£
15,000.00
£
25,000.00
£
35,000.00
Total (A)
£
50,000.00
£
80,000.00
£
1,12,000.00
Non-Current Assets:-
Other Non Current Assets
£
25,000.00
£
47,000.00
£
60,000.00
Current Assets:-
Inventory
£
10,000.00
£
15,000.00
£
32,000.00
Cash and Cash Equivalent
£
15,000.00
£
13,000.00
£
20,000.00
Total (B)
£
50,000.00
£
75,000.00
£
1,12,000.00

Break-Even Point
Break-even Point = Fixed cost / (Revenue per unit – variable cost)
In First Year = £4,39,020 / (65.36 – 12)
= 439020 / 45.36
= 9679 units
Margin of Safety
Margin of Safety (In percentage) = (Current sales level – Break-even point) / Current Sales level * 100
= (10000 - 9679) / 9679 * 100
= (321/ 9679) * 100
= 0.03316 * 100
= 3.32%
Margin of Safety (In units) = Current Sales units – Break Even Sales
= 10000 units – 9649 units
= 321 Units

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