Feasibility Study (ABC fast food restaurant in Cambrige) - Research Paper Example

? xxxxxx No. 123456 FEASIBILITY STUDY (ABC FAST FOOD RESTAURANT IN CAMBRIDGE) ABC of XYZ Department of Business Administration 19 April, 2012 Table of Contents Contents Page No Executive Summary 04 Introduction 04 Cambridge Demography 04 UK Fast Food Industry Analysis 05 Target Markets 06 Analysis of External Environment: Porter’s Five Forces Analysis 07 Threat of New Entrants   07 Bargaining Power of Buyers 07 Threat of Substitutes 07 Bargaining Power of Suppliers 08 Determinants of Rivalry among Existing Competitors 08 PEST Analysis 08 Political Factors 09 Economic Factors 09 Social and Cultural Factors 10 Technological Factors 10 SWOT Analysis 10 Strengths 10 Weaknesses 11 Opportunities 11 Threats 12 Risk Analysis and Sustainability 12 Resource Requirements 13 Dining Furniture, General Fixtures and Land Requirements 13 Machinery and Equipment 13 Human Resource Plan 14 Financial Viability 14 Capital Requirements 15 Conclusion 15 Appendices 17 Appendix-I: Dining Furniture, General Fixtures and Land Requirements 17 Appendix-II: Land and Building Requirement 18 Appendix-III: Machinery and Equipment 19 Appendix-IV: Human Resource Plan 20 Appendix-V: Cash Flow Forecast 21 Appendix-VI: Balance Sheet (Amount in ?) 23 Appendix-VII: Projected Profit and Loss Statements 24 References 25 Executive Summary This feasibility study has been made after making a comprehensive research and evaluating a variety of issues concerning fast food industry in UK. The main purpose and scope of this study is to provide general information about the said industry and to highlight the critical areas for successful launching of a new fast food restaurant in Cambridge. The data discussed in this study is based on some certain assumptions and has been collected through number of sources. A careful attempt has been made to present real time data in the study, however, this information may change at any time due to occurrence of any changes in associated factors, and thus the actual outcomes may differ from the projected results. Introduction ABC Fast Food is a small domestic fast food outlet in Cambridge which is intended to transform itself into a fast food restaurant by means of innovative and resourceful strategies. The food point is registered with Department of Food and Live Stock. ABC Fast Food is furnishing a mixture of wonderful foodstuff and it has a future plan to offer unparallel food at rational rates with entertaining environment. ABC will address the general public for local recipes, Italian dishes, as well as Chinese and Indian food. The major aim is to offer the customers with highest quality services and products to keep them staying again and again. ABC believes that by getting crucial financial support through its sale within two years, it will be able to capture 10-20% of the fast food market in Cambridge. The restaurant has estimated that it will enjoy a 37.3% profit for its investment by the end of April, 2013. Cambridge Demography The UK whole population consists of 19% of age less than 16 years, 65% between 17 to 65 years and 16% of over 65%. Cambridge total population 105,162 is currently ranked as 64th in UK. The 16.4% of its population consists of under 18, 69.7% belong to age group between 19 to 60 years, while rest of 13.9% are over 60 (Statistical Profile, 2011). The population consists of 73.8% of White British, 1.3% of White Irish, 9.8% of White Other, 2.2% of Mixed Race, 5.5% of British Asian, 5.1% of Chinese and others and 2.3% of Black British. The strength of college and graduate students is 22,580. The per capita income in Cambridge is $67,297 (Statistical Profile, 2011). The University of Cambridge established in 1209, is the 2nd oldest university in UK and 4th oldest in the Europe. The university consists of 18396 students (undergraduate 12,018 and postgraduate 6,378) and 8614 employees. The student strength of Cambridge University is about 14.75% of the total population of the city. By 2016, the population of the county is expected to increase by 12.5% while the UK population is expected to increase by 12% in 2031. The growth is high in Cambridge-shire and second to Warwickshire (13.8%). The city of Cambridge is the most attractive place for tourists. Almost 4.58 million tourists visit this city annually out of which 29.5% are foreigners (http://www.cambridge.gov.uk). UK Fast Food Industry Analysis Since a careful and successful market analysis is very much supportive to the success of a new business, therefore ABC has a special emphasis on it. UK fast food is the largest fast food market in Europe which is double and triple in size than Germany and French markets respectively. Consumer expenditures have been raised since the start of 21st century in UK. The food industry (including fast food) had an estimated gross value of ?73.4 billions in 2007 (http://www.whatmattersweblog.com). It had a contribution of 18.8% of national part-time employment and 8.7% of national full time employment. In terms of catering and hospitality, the burger sector is leading and it had revenue of ?9.33 billion in 2008. This revenue was 4.2% greater than the previous year and it was 22.2% of the total fast food market. By including the business of coffee shops, the revenue would reach ?11.22 billion, greater than 4.4% of the year 2007. Fast food restaurants were increased by 8.2% in ten major cities of UK in 2008. According to Food for Thought review, Domino’s and Eat were the most popular and successful while Burger King was the least successful brand in 2009. During 2009, pizza chain of Domino’s, healthy fast food group Eat and sandwich chain Pret A Manger have increased their growth by 50%, 36.4% and 29.7% respectively (www.caterersearch.com). McDonalds entered in the fast food industry in 1974 and today it is the mot dominating fast food chain in the world including UK. According to BHA’s Trends and Statistics 2007, it has more than 1300 outlets in UK. The company deals about 47 million people daily on its 31,000 worldwide fast food restaurant chain (www.mcdonalds.ca/en/aboutus/faq.aspx). KFC is the second largest fast food company operating more than 700 outlets in UK. Target Markets In terms of target market, ABC stands for anyone who wants to eat healthy food. UK public has more appeal toward fast food on weekends because most of the leisure and mall activities are planned on these days. The target market of ABC Restaurant will consist of customers of different categories. ABC is planning to focus on young generation as the primary target market especially the students of Cambridge University and other colleges. Cambridge University arranges permanent extra-curricular activities for students; therefore most of the students are habitual of eating their lunch inside the shopping malls or on fast food points. More than 18,000 students of Cambridge University and Anglia Ruskin University are the main target market for ABC Restaurant. Residential population and working class of Cambridge in particular along with its neighbouring areas would be the second target market. Cambridge is full of shopping malls and super-markets and about 35,000 people work in these markets and malls. Majority of these people take their lunch from fast food restaurants or points. On weekends the residential population spends its leisure time by enjoying fast food from these restaurants. Lastly, the old City of Cambridge is a special attraction for tourists throughout the world. Almost 4.58 million tourists from all over the world are some sort of special target market for ABC. Analysis of External Environment: Porter’s Five Forces Analysis Since ABC is going to grow its already existing unit into a fast-food restaurant, therefore, following are few factors which have been studied to observe the feasibility state for food related business in Cambridge and to achieve the desired success level. Threat of New Entrants   Although it is considered that competitive environment is all the time available at a reasonable cost in UK, even then in Cambridge, the threat from new entry in the field of fast food restaurant is low because of existence of McDonald's Restaurant at Peterborough in Cambridge. MacDonald’s worldwide reputation is a real threat for any new entrant in any area of UK including Cambridge. ABC Restaurant would face a terrific competition with existed chain of McDonald’s and KFC. Bargaining Power of Buyers It is estimated that in Cambridge the customers have reasonable low buying power, so they cannot easily decide and opt to go to the fast food restaurant of their choice. The location, menu, and season also lessen their bargaining power. ABC Restaurant is located at the main road and just 03 km from the Cambridge University. Although, it will enjoy a good number of consistent customers from university, however, from students it will keep on facing low bargaining powers. Threat of Substitutes This corporate point ranges from the competitive fast food restaurant to a family restaurant. Generally fast food restaurants do not offer good products or services in remote areas and since Cambridge is surrounded by several towns and villages, therefore ABC can minimize the threat of any substitutes by appealing more people to come and enjoy its products and services. The desired target is achieved by formulating innovative strategies in terms of menu and services. In Cambridge, generally the threat level is of medium level because of presence of McDonalds. Further, there is also the chance that customers may bring their own food to events ABC will be at. Bargaining Power of Suppliers In UK and especially in Cambridge, the bargaining power of suppliers is somewhat low because main ingredients of some exclusive products or menu are not easily available. For example, French Fries are made from a special kind of potato that grows up in a particular soil and environment. Similarly, the restaurant has a low capacity to deal with trying to buy fruits and vegetables in the winter months when they are harder to get and the price is higher as well. This point demonstrates the lack of pricing elasticity as the cost of seafood is considerably high in UK. Determinants of Rivalry among Existing Competitors In Cambridge, the fast food industry is growing swiftly and provides a reasonable opportunity for competition. In Cambridge, the branch of McDonalds at Peterborough and Terrys Burger Bar at Wisbech has created a really competitive atmosphere. The more specialized the restaurant, the less the threat of competition, could be an ideal policy for ABC to achieve excellence in this area. PEST Analysis The PEST analysis of UK fast food industry highlights major influences on new restaurant. According to Sanderson and Luffman (2001), this analysis indicates “current strategies of competitors, the potential of new competition to enter in the market, the behavior of suppliers and buyers, and the availability of substitute products” (2001, p.20). The competitive marketing environment continuously changes, therefore a well thought-out, composed, detailed and consistent analysis is necessary for best evaluation. Despite of the fact that PEST analysis is used on the basis of previous data, interestingly it can be used as a forecast model (Wilson and Gilligan, 1998).  Political Factors Although the distressing incidents at the start of 21st century e.g. attacks of terrorists in New York on 11 September, 2001 and in London on 7th July 2005, have turned out the most difficult times for the business world, and up to some extent contributed to global recession as well, however, even then political conditions in UK are good. There is no threat of political instability. Government institutions are strong and reliable. In current scenario, there is no such situation or government agreement that has a negative effect on fast food industry. However, in terms of human health particularly with respect to children, UK government has passed several legislations including the education acts of 1996, 1998, 2002 and 2006. The government announced its nutritional regulations for school children as “new standards for school food” in 2006. These regulations may be a sort of external pressure on the ABC Restaurant. Economic Factors Like some other business fields, fast food industry is also directly proportional to the peaceful environment and stable economy of the country because the emerging activities of fast food industry are generally characterized by peaceful environment and high earning elasticity of the general public. In case, the global economy falls down, the corporate environment will get disturbed, and ultimately less number of people will use the fast food restaurants for spending leisure and exciting weekends. During last few years, the fuel cost has risen tremendously throughout the world due to war in Iraq and war against terrorism. In response of fuel cost, ABC might add more investment to meet its necessary requirements. Further, the decline of GDP is a also a serious concern for fast food industry in UK as it has dropped significantly from 3.9% in 2000 to -4.9% in 2009 (CIA, The World Factbook: United Kingdom, 2010). Social and Cultural Factors The social and cultural environments vary in different societies. They mainly depend on the nature of business, demographic aspects and custom values. These factors highlight the customers’ trend and the strength of the potential markets. Previously, the demand of fast food was based on its facilities but due to global economic downturn, the trend has been changed and now it is primarily associated with the prices. UK people and especially residents of Cambridge and its surrounding areas have diversified cultures and therefore have a direct effect on fast foods. ABC Restaurant has to rebuild the confidence of customers especially from young generation. Technological Factors A growing pressure on prices has been building up by the influence of technological advancements. It includes the online booking of orders, seat reservations in restaurants, and cost synergies from the industry consolidation. Youth of Cambridge is the main target market. Further 72% residents of Cambridge are 25 years or older and having at least a Bachelor’s degree (Statistical Profile, 2011). It means the population is fully equipped with sound knowledge of latest marketing technologies and modes, therefore, in order to gain a competitive advantage on its competitors, ABC will emphasize on the field of e-commerce and home delivery of frozen and fresh fast food items of customers’ choice. SWOT Analysis Strengths This feasibility study highlights that ABC possesses several competitive strengths which indicates that this business is going to be superior. The first strength is that ABC Restaurant is healthy. This is an obvious strength because more and more people want to eat healthy food and healthy food of ABC can be a great source of attraction for more and more customers. Secondly, ABC believes in quick service. This business is meant to be a fast and healthy vendor. ABC has enthusiastic and friendly staff and thus has the potential to offer the desired food to its customers as quickly as possible. ABC is very much affordable and its strategy believes that healthy food should not be out of reach for anyone. Being a portable vendor is also one of the strong points of ABC because it can work dynamically even in far locations. ABC Restaurant has the strength to entertain huge number of customers simultaneously during large or special events. ABC provides healthy and tasty food to all age groups so that they always choose to come back again. Being local set up already established, the restaurant is familiar with specific events going on in Cambridge and be involved in the community at all times. Further, ABC is in and around the city all the seasons looking for “the place to be” and this is one of the greatest strengths of ABC because it can be in the right place all the time. Weaknesses One of our biggest weaknesses is the fact that ABC does not have the greasy fried foods that people sometimes crave. When people are looking for something fried, they do not come to it because the restaurant does not offer this type of food. Further, the restaurant has some limited operations in winter. This is a large weakness because the winter months are long, which means that means ABC can be out of some operations for quite a while. Opportunities Since ABC is dynamic and flexible restaurant with respect to its services, schedules, and locations, therefore, it may take full advantage from many outdoor opportunities when many activities are held in the spring, summer and fall, which mean that there will be many places where it can launch its stall to sell its products to the customers. ABC also has lots of room to expand its operations as more and more people want to eat healthy instead of eating greasy fried foods. This is where ABC steps in and offers them the healthy alternatives. An increasing demand for social networking is also an opportunity for ABC because it can plan its advertising through the social media. This is how people will find out where the restaurant’s outdoor services will be on certain days. Also, according to the statistics, the population and urbanization trend in Cambridge is drastically increasing and it is a huge opportunity for ABC because the more people coming to the city, the more people can be served. Threats ABC needs to take some threats into consideration as well. One of them is the repositioning of fast food companies. Lots of fast food businesses are revamping their menus to look healthier. Lots of places are now selling salads, wraps, fruits and vegetables along with their fried foods as well. This is a threat because these places are challenging the ABC in their healthier food line. The availability of fruits and vegetables is a threat to ABC because these are the products that make or break its business. These are the products on which ABC is highly dependent and without these items, it will not have a successful business. Further, the strong strategic positions of McDonalds, KFC, and other direct competitors are obviously a serious threat because these are the companies which have strength enough to take the target market away. Risk Analysis and Sustainability ABC recognizes that risks involved in the field of fast food restaurant are conditional on both industry and market. The leading risk ABC has to face is the long-term pressure of environmental laws exerted by the UK government. It includes the administrative controlling of restaurant and supervision of operations with respect to sustainability laws. These aspects will regularly evaluate and organize the business developments and associated risks. Sustainable management is hallmark of ABC as it keeps a constant balance among the economical, environmental, ecological and social concerns. This concept enables the new restaurant to secure its ability of competition, prop up the efficiency of its staff, build up strong interaction with social stakeholders, and ensure the professional use of natural resources. ABC has the target to put utmost efforts through its convincing sustainability performance to confirm it by environmental experts and international rating agencies. Resource Requirements Dining Furniture, General Fixtures and Land Requirements ABC Restaurant is likely to receive at least 500 users daily, that entails an excellent seating format avoiding any sort of frustration and complications at the time of rush. A comprehensive seating plan shown as Appendix-I, provide the details of dining tables and chairs which will serve up about 200 customers at a time. The area required for ABC is around 22,500 sq. ft. in a densely inhabited area in the vicinity of Cambridge University where almost all resources and services are to offer adequately. The expenditures required for dinning and for kitchen items are calculated in Appendix-II. Machinery and Equipment Recognizing the specific preferences of each and every consumer along with the potential to meet up with their requirements thoroughly is an integral element of the positive results of a restaurant. Sequentially it is primarily based over the equipment and machines which are used to manufacture high quality food. Fast Food machines are comfortably accessible in the market whereby the restaurant owners decide on among pricy and inexpensive varieties in accordance with what amount they are able to manage. Used appliances of world top rated companies like Ayrking, Carpigiani, Elettrobar, Fry-master, Henny-Penny, Ilsa, Lincat, Lincoln, Keating, Mirror, Morretti, Round-Up, Sanyo, and Spinzer are usually out there. In recent times less costly Chinese manufacturers have received recognition from Asian markets but no positive reception in UK. The products could be purchased through international distributors by using shipping timeframe of at least 90 days. A few outlets shutting down their enterprise also sell off their machines at minimal rates, however, the resilience and stability issues should be thought about during the purchase of such equipment. The required machines and equipment for ABC operations along with estimated cost are shown as Appendix-III. Human Resource Plan Cambridge Fast Food is located near the Cambridge University where numbers of foreign students are studying in different disciplines. ABC can manage its full time vacancies through online and newspapers advertising while part-time jobs can be offered to the foreign students. In such situation, ABC should apply polycentric staffing policy for the first year of the marketing. In this approach parent-country nationals hold key positions at company headquarters while foreign citizens are employed as subsidiaries (Hamblin, 1974). Bob Willis is the Managing Director while Graham Lloyed is General Manager of current ABC fast food unit. They both will be responsible for over all running of the restaurant while the daily operations will be supervised by shift managers, holding a degree of MBA in marketing form a reputable University and 14 years experience in related field. ABC will operate in two shifts and its human resource plan is as shown in Appendix-IV. Financial Viability Bob Willis and Graham Lloyed along with their budget experts believe that preliminary financial support of ?125,000 is adequate to achieve the short term profitability plans. The restaurant intends to arrange this money through its business shares and personal investment. To cover up the early expenses, ABC is planning to focus on manufacturing, production, and marketing. It is estimated that by the end of first fiscal year, ABC will make a minimum gross margin of 70%. ABC also estimates that during the same period, it will sustain a net return on sale by 35% to 40%. The following assumptions are very critical for the future success of the restaurant. Year 2012 - 2013 Plan Month 1 Current Interest Rate 10% Long-term Interest Rate 10% Tax Rate 23.38% Cash flow forecast, balance sheet, and projected loss and profit statements are attached as Appendix-V, Appendix-VI, and Appendix-VII respectively. Capital Requirements A brief summary of capital required to set up ABC is shown in tabular form below. Item Capital Required (?) Construction Cost (all inclusive) 376,707 Equipment & Machinery 33,300 Dining & Office Furniture 66,645 Working Capital (Utilities, salaries, bills etc) 10,23,325 Total 14,99,777 Conclusion The demand of fast food is on increasing in UK as well as in Cambridge especially it is a significant part of young generation’s diet. It is expected that this feasibility study will offer a basic guideline for the managing authorities of new restaurant to launch their business with proper preparation. The analysis regarding the day to day demographic and economic changes will provide a clear platform for managers to establish a successful fast food restaurant and to grow it in near future. The taste, freshness, and presentation of food are quite vital for the success of a fast food restaurant. The future growth of ABC Fast Food Restaurant will depend on its ability to come across the innovative conduct and to save the precious time of its customers through its quick, friendly, and dynamic servings. ABC has done the home work almost in all fields and therefore, on the basis of well-researched data, it has established very specific short and long term objectives. By using conventional and modern technology as well as through skilled and motivated human resource, the restaurant believes to achieve its economic, social and sustainability targets within specific time frame. The findings of this report suggest that fast food industry is very much profitable in UK and like other areas; it has sustained a strong influence on the youth population of Cambridge, therefore projected fast food restaurant must consistently seek out for creative ideas and marketing strategies as the field is becoming more competitive day by day. Appendices Appendix-I: Dining Furniture, General Fixtures and Land Requirements Item Details Quantity Unit Price ((?).) Total Price((?)) Dining Table – Square (2X2) 50 120 6000 Chairs (Standard 14”) 300 80 24000 Kitchen Cutlery Set 3 450 1350 Dining Cutlery* (Plate, Fork, Knife, Spoon, Glass) 300 50 15000 Air Conditioner Split Units (6 Ton) 3 2200 6600 Hot Water Geyser Large 2 500 1000 Halogen Lights 40 40 1600 Wall Lights (Large) 10 125 1250 Portable Emergency Light 5 125 625 Generator (1.5 KVA) 2 2100 4200 Counter Chairs 2 110 220 Office Table & Chair Set 1 3000 3000 Waiting Chairs for Take Away Customers 10 180 1800 Total 728 - 66645 Appendix-II: Land and Building Requirement Details % (Sq. Feet) Size (Sq. Feet) Civil Works & Decor* (Cost in ? / square feet) Total Construction Cost (?) Dining 63 14017.5 21 294357 Waiting 4 112.5 21 2362 Kids Play 3 667.5 26 17355 Kitchen & Preparation 25 5562 10 55620 Office 1.5 33.75 10 338 Stores 3 667.5 10 6675 Total 100 22,250 - 376,707 Appendix-III: Machinery and Equipment Item Details Quantity Unit Price (?) Total Price(?) New Broast Machine (15 Pound Capacity)* 2 11500 23000 Hot Plate for Burgers, Kebab, Sandwiches (30” x 22”) 2 630 1260 Potato Cutter (8mm) 2 70 140 Microwave 2 80 160 Keg Racks & Shelves 3 210 630 Freezers (12 cf) 6 520 3120 Deep Well Frier (Single Valve With 2 Baskets) 2 800 1600 Bin Marry Soup Container (2 Valve With Steel Cabinet) 2 615 1230 Pillar (4.5 Kg Potato Peeling Capacity) 2 120 240 Working Tables 3 640 1920 Total 26 - 33300 Appendix-IV: Human Resource Plan Position Strength in 1st Shift Strength in 2nd Shift Total Strength Payroll/Head /Month (?) Total Payroll/Month Total Annual Payroll (?) Managing Director 01 - 01 3800 3800 45600 General Manager - 01 01 3500 3500 42000 Shift Manager 01 01 02 2200 4400 52800 Accountants 01 02 03 1500 4500 54000 Receptionist 02 02 04 1200 4800 57600 Facilities Management 02 03 05 1200 6000 72000 Kitchen Staff 03 06 09 1000 9000 108000 Waiters 08 08 16 700 11200 134400 Parking Boys 01 01 02 700 1400 16800 Sanitary Workers 01 02 03 700 2100 25200 Grand Total 46 50700 608,400 Appendix-V: Cash Flow Forecast Variables Month Wise Forecast (?) May Jun Jul Aug Sep Oct Beginning Cash Balance 125000 8352 8379 11256 17513 26177 Sales 79445 95000 97000 102000 104000 108900 Total Cash Available 204445 103352 105379 113256 121513 135077 Cash Disbursements Manufacturing 5000 4800 4770 4800 4890 5100 Expenses 27550 22220 21850 22555 22000 23550 Depreciation 778 778 778 778 778 778 Principal 1020 1020 1015 1035 1048 1070 General And Admin 2200 1780 1410 2075 1970 2070 Staff Salaries 46500 46500 46500 46500 46500 46500 Total Cash Disbursements 83048 77098 76323 77743 77186 79068 Net Cash From Operations 121397 26254 29056 35513 44327 56009 Loans and Capital Infusion National Bank Fixtures 0 0 0 0 0 0 Capital Infusion 0 0 0 0 0 0 Other Disbursements Proprietor's Draw 12000 12000 12000 12000 12000 12000 Debt Service 1100 1100 1100 1100 1100 1100 Capital Disbursements Furniture & Fixtures 66645 0 0 0 0 0 Equipment 33300 0 0 0 0 0 Net Cash Balance 8352 8379 11256 17513 26177 37409 Variables Month Wise Forecast (?) Nov Dec Jan Feb Mar Apr Beginning Cash Balance 37409 49601 50073 44830 35357 19709 Sales 111000 102000 98000 94000 88000 94000 Total Cash Available 148409 151601 148073 138830 123357 113709 Cash Disbursements Manufacturing 5325 5500 5610 5800 6100 6100 Expenses 24250 25500 26855 27125 27200 27000 Depreciation 778 778 778 778 778 778 Principal 1055 1040 1050 1055 1055 1055 General And Admin 2100 2710 2650 2615 2515 2420 Staff Salaries 46500 46500 46500 46500 46500 46500 Total Cash Disbursement 80008 82028 83443 83873 84148 83853 Net Cash From Operation 68401 69573 64630 54957 39209 29856 Loans and Capital Infusion National Bank Fixtures 0 0 0 0 0 0 Capital Infusion 0 0 0 0 0 0 Other Disbursements Proprietor's Draw 12000 12000 12000 12000 12000 12000 Debt Service 1100 1100 1100 1100 1100 1100 Capital Disbursements Furniture & Fixtures 0 0 0 0 0 0 Equipment 0 0 0 0 0 0 Net Cash Balance 49601 50073 44830 35357 19709 10256 Appendix-VI: Balance Sheet (Amount in ?) Assets and Liabilities Current Year 1 Current Assets Cash and Equivalents 125,000 318,912 Receivables from Sales 0 87,100 Prepaid Expense/Deposits 0 9,000 Total Current Assets 125,000 493,112 Fixed Assets Equipment & Machinery 33300 33300 Furniture & Fixtures 66645 66645 Net Fixed Assets 99645 99,645 Total Assets 224,645 592,757 Liabilities Current Liabilities Trade Payables 0 18,624 Income Tax Payable 0 25,360 Short Term Notes 0 7,125 Total Current Liabilities 0 51,109 Long Term Liabilities Notes Payable, Bank 224,645 558,000 Notes Payable, Others 0 0 Other Liabilities 0 0 Total Long Term Liabilities 224,645 558,000 Total Liabilities 224,645 609,109 Proprietor's Account Owner's Equity 224,645 10,000 Less Withdrawals 0 6192 Total Net Worth 224,645 16,352 Total Net Worth and Liabilities 224,645 592,757 Current Ratio 10.2 Quick Ratio 8.1 Return on Investment 2.2 Appendix-VII: Projected Profit and Loss Statements The following graphical data displays our estimated profit and loss in first years. Cost 2012 Sales 11,71,900 Direct Cost of Sales 297,655 Other 125,000 Total Cost of Sales 422,655 Gross Margin 949225 Gross Margin % 63.9% Expenses Payroll 608400 Sales and Marketing and Other Expenses 191,525 Depreciation 81633 Utilities 26000 Insurance 40,000 Miscellaneous 5000 Total Operating Expenses 952,558 Profit Before Interest and Taxes 201,374 EBITDA 284,912 Interest Expense 25,360 Taxes Incurred 85,585 Net Profit 355,327 Net Profit/Sales 37.3% References CIA, The World Factbook: United Kingdom. . Retrieved 21 May, 2010. Luffman, G.A. & Sanderson, S.M. (2001). ‘Strategic Planning and Environmental Analysis’, European Journal of Marketing, Vol. 22(2), pp. 14-27 Hamblin, A. C. (1974). Evaluation and Control of Training. Maidenhead: McGraw-Hill Book Company Statistical Profile, Demographic, Socioeconomic, Land Use, Education, Cambridge Community Development Department: 2011 Wilson, R.M.S., and Gilligan, C. (1998). 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