1 / 21

Papa Geo’s Restaurant Budget Proposal For 2012-2016

Papa Geo’s Restaurant Budget Proposal For 2012-2016.  BUSN-278 Budgeting and Forecasting sessionB Professor Brandon Foor DeVry University. Table of Contents. Objectives Budget Preparation Financial Statements Methods and Assumptions Competition Geographic Target

enye
Télécharger la présentation

Papa Geo’s Restaurant Budget Proposal For 2012-2016

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Papa Geo’s RestaurantBudget Proposal For 2012-2016  BUSN-278 Budgeting and Forecasting sessionB Professor Brandon Foor DeVry University

  2. Table of Contents • Objectives • Budget Preparation • Financial Statements • Methods and Assumptions • Competition • Geographic Target • Sales Forecast • Capital Expenditures Budget • Cash Flow • NPV • Rate of Return • Payback Period • Pro Forma Income Statement • Pro Forma Cash Flow • Pro Forma Balance Sheet

  3. Objectives • Papa Geo’s Restaurant will be a single-location, sit-down Italian restaurant located in Orlando, Florida. Our objective is to generate an income of at lest $40,000 per year, starting sometime in the second year of the operation, as well as profit that is at least 2% of sales • Restaurant targets middle to lower-middle class families with children, as well as adults and seniors, • Our Italian food will be served in buffet style • The company will operate from 10:00 am to 9:00 pm all 7 days a week

  4. Budget Preparation • Five year planning horizon is used. • The initial up-front investment includes$900,000 investment. • In deciding on the initial investment, the Net Present Value (NPV) was calculated. • The discount rate for the required rate of return is 10%. Discount factors for a five year period were taken from present value tables. • This created the present value of cash inflows. The total was then taken and divided by the initial $900,000.00 investment. • The Rate of Return (ARR) was calculated simply by using the cash inflows for the 5 year period and adding in the depreciation for the equipment. • This amount was then divided by the initial investment. • The Internal Rate of Return (IRR) was figured by taken the initial investment and dividing it by the annual cash inflows.

  5. Financial Statements • A Pro-Forma Financial statement is a financial statement that a company prepares to consider the effects of a potential activity. • Pro forma describes a presentation of data, typically financial statements, where the data reflect the world on an 'as if' basis. • That is, as if the states of the world were different from that which is in fact the case. • Including the first year well have positive ending balances.

  6. Methods and Assumptions • Information is based on research on locations that sell the same products. • Italian buffet makes $9 billion sales in one year. • Assumption that amount sold in one year will be about 144,075.22

  7. Competition • As of today there are only 2,728 Italian buffets in the whole United States. • Our price is lower then that fast food restaurants around us. • We are more clean and faster when it comes to seating down our customers for them to eat. • Also we have a vending machines to keep children busy while adults enjoy their meal.

  8. Geographic Target • The target is middle to lower- middle class families with children, as well as adults and seniors. • The area is within 15 minutes of the store has 10,000 families, mostly form lower to middle class neighborhoods. • Average family size is 4 people per household. • The lower to middle class population is growing at about 6% per year over the next five years in this area.

  9. Sales Forecast

  10. Capital Expenditures Budget • Total Capital Expenditure is $50,207 • As stated we need to spend $68,083.53 on equipment that is needed to start the business. • We also are going to spend $4,810 on miscellaneous items such as dish sets, cups, silver ware, etc. • And as for the furniture/ fixtures the amount is $397 these are important because we need an office desk to be able to work on paper work such as applications, bills, payroll, etc. • The amount spent on the Capital Expenditure should cover the full five years

  11. Rate of Return • The Rate of Return is used to determine the rate allowed for the next five years to get the present value at a positive value.

  12. Pro-Forma Income Statement • A Pro-Forma Financial statement is a financial statement that a company prepares to consider the effects of a potential activity. • Pro forma describes a presentation of data, typically financial statements, where the data reflect the world on an 'as if' basis. • That is, as if the states of the world were different from that which is in fact the case.

  13. Pro-Forma Cash Flow Statement • “ The cash budget [beginning cash balance + anticipated receipts - expected disbursements = ending cash balance] will provide information about any need for working capital, such as a line of credit, short term financing, or an infusion of capital from the owners of the business. • The cash budget necessarily takes into account any payments on existing indebtedness, receipts of interest on customer financing arrangements, and any anticipated capital expenditures.”

  14. Works Cited • Yellow pages Website Retrieved from: http://www.yellowpages.com/orlando-fl/italian-buffet-restaurants?g=Orlando%2C+FL&q=Italian+buffet+Restaurants#e:/k:refinements-headingtext/l:HeadingText/f:refinements%255Bheadingtext%255D%255B%255D%3DBuffet+Restaurants%26refinements%255Bfacet_clicked%255D%3DHeadingText/o: on 5/12/2012 • Manta Website Retrieved from: http://www.manta.com/mb_35_C432C7N1_000/buffet_eating_places_#?tab=charts-emp_pie on 5/12/2012   • Vince’s Restaurant and pizza Retrieved from, http://www.vincesrestaurantandpizza.com/chicago-il-lunch- buffet.htm on 5/12/2012   • Mohammed Rafi, How Do Restaurant Buffets Make Money, February 27,2007 Retrieved from http://www.pricingforprofit.com/pricing-strategy-blog/how-do-restaurant-buffets-make-money.htm , on 5/12/2012 • Business dictionary Website,Retrived from • http://www.businessdictionary.com/definition/sales-forecast.html#ixzz1uiAkavRz,on 5/12/2012 • Katom Restaurant supply, Inc. website, Retrieved from • http://restaurant-supplies.katom.com/cat/pizza- conveyor-ovens.html, on 5/17/2012 • Acity Discount Website, Retrieved from http://www.acitydiscount.com/Used-Cornelius-Beverage-8-Head-Drink-PEPSI-Soda-Fountain-w-Ice-Dispenser-ED175.0.129672.1.1.htm?PPCID=1&link=cse_Soda-Dispensers-Carbonated&gclid=CIf29KvQh7ACFUMCQAodPgK5lAon 5/17/2012 • Gameroom Champ website, Retrieved from, http://www.gameroomchamp.com/arcade-games/?ibp-adgroup=adwords&gclid=CMvOsfXWh7ACFdEDQAodcHXmngon5/17/2012 • Investopedia website, Retrieved from http://www.investopedia.com/ on 5/26/2012 • Dictionary website, Retrieved from http://financial-dictionary.thefreedictionary.com/pro+forma+statement on 6/03/2012

More Related