Business Research Project: Strategies for Tai Pan Profit Maximization

This research project investigates how Tai Pan, a Chinese restaurant in southern Spain, can maximize profits during its low season. The study employs break-even analysis, financial statement and ratio analysis, and SWOT analysis to identify strategies for improving revenue and cutting costs. The research includes an analysis of Tai Pan's financial statements from 2016-2018, focusing on profitability, liquidity, and investment ratios. Key findings highlight areas where Tai Pan can improve its financial performance and attract more customers during the slower winter months. The project also outlines potential difficulties in gathering financial data and proposes marketing strategies to enhance customer engagement. Desklib offers this project as a valuable resource for students seeking examples of business research and analysis.

Research Proposal
Research question: How to maximise profits during the low season in Tai Pan?
Suggested Analytical Tools
 Break-even analysis
This will help me calculate how much revenue is needed compared to costs to run the
business.
 Financial statement and ratio analysis
This can help as there can be methods for the business to cut costs. Which helps the business
maximise profits whilst not losing quality as the business is expected to have a high standard
for their food and service.
 SWOT Analysis
It is a high level strategic planning model that helps organisations to identify that an
organisation is doing well and where it can improve, both from internal and external
prospectus
Rationale
Tai Pan has been suffering a lack of customers during the lower seasons where there are some
days where the restaurant is empty. 1Therefore, to cut costs and maximise profits, Tai Pan
should do something to receive an adequate amount of revenue to keep the business running.
I will be carrying out this investigation, helping the business to find the best way to
accomplish this.
Methodology
To carry out this investigation, I will be using the financial and marketing part of the business
with some other factors to prove the investigation. An interview will be needed to conduct the
research and some information from the business to calculate the costs of the business and the
profits if I am allowed to. The marketing segment of this investigation is to suggest which
strategies used to attract customers and what has to be done to this 2. To collect the
information, I would need to contact the business to see when they are available and arrange
a meeting with them. Finally, to gather the information I collect, I would create a document
of all the information I receive and create a spreadsheet if any figures come up in the process.
Difficulties
There are many problems that can occur during this investigation; such as permission to get
profits and cost since they are a Private Limited Company, and if so, I would have to use
1 Luo, D. and et. al., 2015. The application of stable isotope ratio analysis to
determine the geographical origin of wheat.Food chemistry.174. pp.197-201.
2 Dehnavi and et. al., 2015. A new hybrid model using step-wise weight assessment
ratio analysis (SWARA) technique and adaptive neuro-fuzzy inference system
(ANFIS) for regional landslide hazard assessment in Iran.Catena.135. pp.122-148.

marketing strategies to attract clients instead of finding a way of expanding the business
which can limit my solution to their issue. However, it came to my mind that there may be
biased sources when gathering information but there shouldn’t be any as I will be gathering
quantitative information where the business cannot choose a favouring side to the problem.

Action Plan
Tasks Aug Sep Oct Nov Dec Jan F
e
b
1 Come up with a
business
2 Create a research
question
3 Start research proposal
4 Commence research
5 Introduction
6 Writing report
7 First draft
8 Work on draft
9 Final submission

Research Project

Table of Contents
Research Proposal.................................................................................................................1
Research Project....................................................................................................................4
Table of Contents...................................................................................................................5
Executive Summary................................................................................................................ 6
Introduction............................................................................................................................. 7
Methodology Employed..........................................................................................................8
Main Results and Finding.......................................................................................................9
Analysis and Discussion.......................................................................................................13
(a) Financial statements and ratio analysis......................................................................13
(b) Break even analysis: .................................................................................................16
(c) SWOT Analysis...........................................................................................................17
Conclusion and recommendation.........................................................................................20
Reference and bibliography..................................................................................................21

Executive Summary
To maximise the profit of Tai Pan Chinese restaurant, three analytical tools is used.
By using break even analysis, company can achieve its desired units to maximise its profits
and also by using SWOT analysis technique company can find its strengths, weakness,
opportunities & threats to take advantage of these in profit maximisation. Tai Pan uses the
ratio analysis tool to identify the key areas where it is required to do more concentration for
increasing the overall profits. By applying these three analytical tools, a company can achieve
desired target in lean season also by removing wasteful activities of business.

Introduction
Company name: Tai Pan
Tai Pan is a Chinese restaurant located in southern Spain. It was founded in 1982, being one
of the first Chinese restaurants to open in Marbella, Spain.
The business is currently facing a downfall of customers in the past years during the low
season, as there are not many tourists during winter months. Therefore, to keep the business
up and running they would need a new strategy to keep the cash flow up 3. Having the
restaurant be open every day has its costs and they need a specific amount of people coming
per night to break-even. There are some nights where there are no customers in the restaurant,
meaning that they are losing revenue.
Thus, this is the reason I am carrying out this investigation, as I want to help them find a
solution to this problem. I will be finding out a way for Tai Pan to maximise their profits
during the low season. To do this, I will be using the financial and marketing segments of
business; as I think that they would need to attract more local customers and make the
customers have a reason to dine there, meaning that Tai Pan has something special to its food
that no other competitor has.
3 Trivedi and et. al., 2016. Gas chromatography-mass spectrometry based isotopic
abundance ratio analysis of biofield energy treated methyl-2-napthylether
(Nerolin).American Journal of Physical Chemistry.4(5). pp.80-86.

Methodology Employed
This investigation will primarily use secondary research as the financial statements of
the business are needed to carry out my research. I will organise an appointment with Tai Pan
to carry out an interview of what I am investigating and if I need any additional information I
would send them an email to get what I need. I decided to use these methods to obtain the
information I need as the interview will allow me to ask any additional questions I have in
mind and it is easier to contact them as there will not be any miscommunication or problems
when trying to reach them 4. An email is also good as it is quick and easy to respond to and
will not take any time trying to organise a time where both the business and I can meet.
The business tools I will be using to conduct this investigation are break-even analysis
and financial statement and ratio analysis. The break-even analysis will allow me to figure
out how much income compared to cost is needed for Tai Pan to not lose revenue and
increase it instead 5. Financial statement and ratio analysis is used to evaluate Tai Pan’s
operating and financial performance, such as its efficiency, liquidity, profitability and
solvency; which then allows me to show the business on ways to increase profit.
The collection of data should be reliable as the business wouldn’t give me false
numbers when they have a problem to be resolved in addition the information I will be
gathering are quantitative, therefore, it will not be biased as it will be facts that the business is
giving me 6.
4 Petruzzo and et. al., 2015. Outcomes after bilateral hand allotransplantation: a
risk/benefit ratio analysis.Annals of surgery.261(1). pp.213-220.
5 Morano, P. and Tajani, F., 2017. The break-even analysis applied to urban renewal
investments: a model to evaluate the share of social housing financially sustainable
for private investors.Habitat International.59. pp.10-20.
6 Dehnavi and et. al., 2015. A new hybrid model using step-wise weight assessment
ratio analysis (SWARA) technique and adaptive neuro-fuzzy inference system
(ANFIS) for regional landslide hazard assessment in Iran.Catena.135. pp.122-148.

Main Results and Finding
The results and the finding of the Tai Pan that are to be understand with the help of
ratios and charts mentioned below in order to improve its sales in off seasons 7.
1) Profitability Ratios:
 Gross Profit Ratio: Gross Profit / Sales * 100
2016-17 2017-18
972 / 1036 *100 1164 / 1295 *100
93.82% 89.88%
0.87
0.88
0.89
0.9
0.91
0.92
0.93
0.94
2016-17 972 / 1036 *100
2017-18 1164 / 1295 *100
 Net Profit Margin Ratio: Net Profit / Sales * 100
2016-17 2017-18
437 / 1036 * 100 175 / 1295 * 100
42.18% 13.51%
7 Morano, P. and Tajani, F., 2017. The break-even analysis applied to urban renewal
investments: a model to evaluate the share of social housing financially sustainable
for private investors.Habitat International.59. pp.10-20.

0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2016-17 437 / 1036 * 100
2017-18 175 / 1295 * 100
(2) Liquidity Ratios:
 Current Ratio: Current Assets / Current Liabilities
2016-17 2017-18
842 / 550 625 / 764
1.53:1 0.82:1
 Quick Ratio: Quick Assets / Current Liabilities.
2016-17 2017-18
813 / 550 583 / 764
1.48:1 0.76:1
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2016-17 842 / 550
2017-18 625 / 764

(3) Investment Ratios:
 Return on Equity: Profit after tax / Net worth *100
2016-17 2017-18
362 / 1481 * 100 91 / 1340 * 100
24.44% 6.79%
 Return on Assets: Net Profit / Total Assets * 100
2016-17 2017-18
340 / 3683 * 100 53 / 3786 * 100
9.23% 1.40%
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2016-17 813 / 550
2017-18 583 / 764
0
0.05
0.1
0.15
0.2
0.25
2016-17 362 / 1481 * 100
2017-18 91 / 1340 * 100

Analysis and Discussion
Analysis and discussion can be done by :
(a) Financial statements and ratio analysis
Income Statements of Tai Pan for the year ended 30.06.2017 and 30.06.2018
( € in million)
2016-17 (€) 2017-18 (€)
Revenue 1036 1295
Cost of revenue 64 130
Gross Profit 972 1164
Operating expenses:
Sales, general and administration expenses 627 739
Other operating expenses 90 107
Total Operating expense 717 846
Operating Income 255 318
Interest expense 29 43
Other income (expense) 211 -100
Income before tax 437 175
Provision for income tax 75 84
Net Income available for common shareholders 362 91
other -22 -38
Net Income 340 53
Balance Sheet of Tai Pan as at 30.06.2017 and 30.06.2018
(€ in million)
2016-17 (€) 2017-18 (€)
Assets:
Current Assets:
Cash:
Cash and cash equivalent 652 362
Short term investment 76 83
Total Cash 728 444
Receivable 72 85