3 | Page Crystal Messer FIN 317 Table of Contents 1. Brief 2 i. Location 2 ii. Type of customers 2 iii. Competitors 2 2. Why this type of business interests you? 2 3. Why do you believe it would be successful 3 Cafe Grill Brief This business is from the food and beverage industry. Café grill would be a fast-food restaurant chain like Mc Donald, Burger King, KFC, and other fast-food restaurants. And the type of business I am planning to start would be a partnership as it doesn’t require paying income taxes as each partner would have to pay tax based on personal income and it would have increased pool of knowledge, capital, and expertise. Location The location of the business Warner Robins, Georgia, USA. Since this would be the best location as would be the best fit because people would love to try something new when coming to Mc Donald’s and most of the restaurants and because the area of your food business will affect about as much as the menu. If your restaurant is at an inappropriate spot, you won’t attract customers you will require so as to remain in business. Type of customers The type of customers of café grill would be fast food lovers such as youngsters(these are the people who would love to spend most of their pocket money with friends ) , children( because they don’t prefer homemade food every time) and office going people( who don’t have time to make food would prefer to drive-thru). Competitors The main competitors of café grill would be Mc Donald’s, KFC, Burger King, Subway, Dunkin Donuts, Pizza hut, Wendy’s and Taco Bell as they all are direct competitors of café grill as because they have an almost similar target market and also selling nearly similar food. Why this type of business interests you? As an entrepreneur, I love to do creative and innovative things and I have an interest in cooking and trying new recipes so it is the passion and creativity that lures me to open a restaurant. Not only this but I am also a sociable person so restaurant business falls into the hospitability category business so I love to meet new people (greeting customers and solving their problems). In Addition to this, I possess strong stamina for working long hours and solving uncertain problems. Why do you believe it would be successful? The reason behind taking restaurant business is that eatery business is one of the most beneficial business in view of its developing demand as nowadays people want to dine out more in comparison to cooking meal at home and as per market research more than twice a week people like to dine ...

1. 3 | Page
Crystal
Messer
FIN 317
Table of Contents

2. 1. Brief2
i. Location 2
ii. Type of customers 2
iii. Competitors 2
2. Why this type of business interests you? 2
3. Why do you believe it would be successful 3
Cafe Grill
Brief
This business is from the food and beverage industry. Café grill
would be a fast-food restaurant chain like Mc Donald, Burger
King, KFC, and other fast-food restaurants. And the type of
business I am planning to start would be a partnership as it
doesn’t require paying income taxes as each partner would have
to pay tax based on personal income and it would have
increased pool of knowledge, capital, and expertise.
Location
The location of the business Warner Robins, Georgia, USA.
Since this would be the best location as would be the best fit
because people would love to try something new when coming
to Mc Donald’s and most of the restaurants and because the area

3. of your food business will affect about as much as the menu. If
your restaurant is at an inappropriate spot, you won’t attract
customers you will require so as to remain in business.
Type of customers
The type of customers of café grill would be fast food lovers
such as youngsters(these are the people who would love to
spend most of their pocket money with friends ) , children(
because they don’t prefer homemade food every time) and
office going people( who don’t have time to make food would
prefer to drive-thru).
Competitors
The main competitors of café grill would be Mc Donald’s, KFC,
Burger King, Subway, Dunkin Donuts, Pizza hut, Wendy’s and
Taco Bell as they all are direct competitors of café grill as
because they have an almost similar target market and also
selling nearly similar food.
Why this type of business interests you?
As an entrepreneur, I love to do creative and innovative things
and I have an interest in cooking and trying new recipes so it is
the passion and creativity that lures me to open a restaurant.
Not only this but I am also a sociable person so restaurant
business falls into the hospitability category business so I love
to meet new people (greeting customers and solving their
problems). In Addition to this, I possess strong stamina for
working long hours and solving uncertain problems.
Why do you believe it would be successful?
The reason behind taking restaurant business is that eatery
business is one of the most beneficial business in view of its
developing demand as nowadays people want to dine out more
in comparison to cooking meal at home and as per market
research more than twice a week people like to dine out and try
to taste new and tasty food and spend some quality time with
their family and peers as because routine is hectic there so they
find this solution as more appropriate as eating food while
having good time with family.

4. 3 | Page
Table of Contents
1. Financial Start Up Needs 2
a. Analysis 2
b. Rationale 3
2. Financing Options 3
3. Financial Ratios 4
1. Financial Start Up Needsa. Analysis
Start-up needs
Quantity
Total based on month
Amount
Cash at hand
200,000
30
6000,000
Set of cooking tools and Equipment’s
Total needed is 4 as each cost 300,000
0
12,00,000
Purchase of chicken and other needed raw material
5 kg per day and each kg is 1000 of chicken and 10,000 for

5. other material
150000+300000
450,000
Rent cost
250,000 monthly
250000
250000
Water and cold drink dispenser
100,000 per dispenser of water and cold drink. Total needed in
quantity is 2
400,000
400,000
Air conditioners
5 as each has a cost of 100,000
500000
500000
Tables and chairs
15 sets as each costs 150000
2250,000
2250,000
Standby generator
200000
0
200,000
Utility expenses (electricity bills, fuel etc)
100,000 per day
30
30,00,000
Labour cost
Total 20 working staff and each would be paid 50000, and for
executives 7 managers it needs to pay 120000
30000000+840000
30840000
Total

6. 42090,000b. Rationale
Café grill would require cash at hand of Rs. 200000 to meet day
to day operations and financial needs. And it also requires a set
of cooking tools and equipment in order to cook fries, burgers,
broasts and other needed stuff for cooking. Not only this it
would also require chicken and other raw material needed to
cook chicken and other stuff and it will also incur the cost of
rent as we will not go for the purchase of land and building
because it will incur an excessive cost as paying aren’t in a
month would be simple enough. Café grill would also need to
have water, and cold drink dispensers in order to serve drinks,
water and ice cream to customers. Since it also needs to have an
air conditioner in order to create a smooth and comfortable
environment for customers as because its competitors offer all
these facilities along with it will also need a standby generator
in case of electricity breakdown occurs so that our customers
don’t get dissatisfied with the environment we provide. Lastly,
it will incur some utility expenses such as electricity bills of
light, machines and needed equipment and incurrence of fuel
charges for generator.
2. Financing Options
There are many ways through which company can generate the
amount of money to cater its business needs as café grill can
also go for the joint stock company, loans from bank, peers or
friends, a sole proprietorship in case if he has his own saving
hence in my opinion and partnership. The best financing option
for café grill would be going for partnership among all of its
partners as it can obtain money by a partnership of 5 partners
among each other. As one of the options can be that each
partner must invest an equal amount of money in the business
and also invest sufficient expertise and time needed to run this
restaurant business. Since another option can be active partners
who may invest less amount of money and provide expertise and
knowledge in the business and sleeping partner must invest a

7. huge amount of investment and pay a very little time to manage
the day to day operations. And approaching through this type
of financing would be finding credible partners who may invest
a certain sum of money as these credible partners can be one of
your friends, relatives or colleagues.3. Financial Ratios
Although there are many direct ways to measure the
performance of the business as we can measure it by evaluating
the number of assets café grill have, low amount of liabilities it
has and etc. but the two most important rations in order to
measure the performance of the business is Return on Equity
ratio (ROE) and current assets (CA) ratio as firstly current
assets ratio means that the amount of currents assets it has in
comparison to its liabilities. In other words, A high proportion
shows a greater degree of protection, which expands flexibility
for the company And also high ratio indicates that company can
have good financial efficiency of using its assets efficiently to
create revenue and its capability to deal with those advantages
whereas return on equity refers to measuring the financial
efficiency that tells us how much company generate profits
relative to its stockholder investment as A rising ROE
recommends that an organization is expanding its capacity to
produce profits without requiring as much capital. It
additionally demonstrates how well an organization
administrates its investors' capital. Hence with these two ratios,
we can measure the company performance of how it is
performing.
Sheet1Pro forma balance sheet as at 31st december 2019Café
GrilAssets Liabilities Cash at hand 6000000rent3000000Sales
20000000labor costs 27350000Gnerator 400000Tables and
chairs 2250000Air conditioners 500000cooking tools
1200000Total 3035000030350000Proforma income statement
Cash receipts january february
mrchapriljunejulyaugustseptmberoctobernovemberdecember500
00006000000600000080000001000000010000000120000001200

8. 0000150000001600000018000000Total118000000cash
payments january february
marchaprilmayjunejulyaugustseptemberoctobernovemberdecemb
er200000020000003000000200000040000005000000500000050
000006000000600000070000008000000Total
55000000Proforma cash budget Total cash receipts
=receipts118000000Toital cash payments55000000
1
2
3
4
5
6
7
8
9
A
B
C
D
E
Pro forma balance sheet as at 31st december 2019
Café Gril
Assets
Cash at hand
6000000
Sales
20000000
Gnerator
400000
Tables and chairs
2250000
Running head: FINANCIAL MATRICS CAFÉ GRILL 5

9. Financial Metrics Café Grill
Crystal Messer
The proforma financial models have anticipated outcomes of a
transaction. Café Grill proforma balance sheet gives a summary
of the projected future of the business after all the transactions
based on the current financial status. Café Grill short total
assets, both short term, and long term equate to total liabilities
in the future, and hence the future balance sheet is realistic. The
next business profitability and risks are given out in the
proforma balance sheet. Solvency and liquidity of the business
dare calculated in risk analysis. Café Grill has enough cash to

10. meet all its obligations as portrayed in the balance sheet. Its
assets equate to the liabilities. The business solvency depicts
whether the company can be able to recover from losses. The
proforma balance sheet also looks into the future profitability
analysis in profitability ratios such as return on equity. (ROE).
The proforma income statement of Café Grill consists of
expenses and revenues alongside the resulting net loss or
income over a certain period from the company’s activities. The
proforma income statement of the business clearly shows the
management and investors whether the firm will make money or
not in the future. The future income statement has got a revenue
section that has inflows of cash as well as cash outflows. The
next net income is calculated by subtracting total expenses from
total revenue. Among the proforma expenses are; COGS (cost of
goods sold). This gives a future value of Café Grill’s direct
costs associated with the production and selling of goods. Other
costs such as expenses in development and research of products
are also included. Expected depreciation costs with respect to
the company’s fixed assets are also part of the proforma income
statement. The proforma non-operating expenses and revenues
include primary business losses such as foreign exchange rates
whereas revenues include patent income. A proforma analysis
on earnings per share, EPS is also calculated from the income
statement to give out the shareholders expected a profit for the
targeted period. The net income section in the proforma income
statement is critical as it represents the firm’s expected
profitability attributable to its shareholders. It determines the
production schedule. It also gives a sales projection as well as
computing other expenses.
The proforma cash flow gives out the expected amount of cash
outflows and inflows of the business. The proforma cash flow
statement illustrates Café Grill anticipated net cash flow over
the specified period. The cash balance on the proforma cash
statement shows improvement, and hence, the business will be
profitable. The proforma cash flow is composed of; operational
cash flows. This gives the expected cash receivership as a result

11. of Café Grill internal business activities. The cash earnings will
be net positive maintaining the company’s solvency. Investment
cash flows are also included in the proforma cash flow
statement of Café Grill. It estimates the amount of cash that will
be received from long-life assets and other investments.
Proforma financing cash flows will give the anticipated cash
receivership from equity and debt, or the cash paid out as share
repurchases and as dividends.
Café Grill expected rate of return is calculated from the
proforma cash flow statement as well as the net present value.
The two gives out a positive value; hence, the business is worth.
There are no problems with Café Grill’s proforma liquidity as
shown by the proforma cash budget. The company will have
enough cash and hence no probability of collapsing or going
bankrupt. Also, from the proforma cash budget, income
generated by accrual accounting of the firm is of quality. Café
Grill’s financial products risks are also anticipated to be low
based on the proforma cash budget.
Both the tangible and intangible costs of the business do not
exceed the gross income of the company; hence, the funding
source is well implemented.
A business would be worthwhile if it has a good return on
equity ratio (ROE). Return on equity ratio would measure the
effectiveness of the industry in using its equity to generate
income. Dividing the net profit with the equity gives this ratio
by the company’s equity. A return on equity ratio of about 15-
20% would make the enterprise worth as it gives the ability of
the management to generate income from the available equity.
(Saleem, 2011).
Operating margin will also provide a functional analysis of
whether the business is worthwhile. The ratio is calculated by
dividing the operating income with the company’s revenue. If
the industry happens to have a small ratio, then it is less
profitable and vice versa. If the operating margin of the
business is zero, then the company is not earning anything from
its sales. (Saleem, 2011).

12. Moreover, I would check on the business’s profit margin as the
operating margin ratio won’t be sufficient as a standalone. The
profit margin will measure the amount of profit the company
earns from its sales. The ratio is calculated by dividing profit by
sales. Both gross and net profit margins would be vital in
evaluating the profitability of the venture. Return on assets ratio
(ROA) would be crucial in measuring how the assets are being
effectively utilized to generate profit. The ratio would be made
by dividing the net income by the total assets. If the ratio is
high, then the business is effectively utilizing its assets to
generate profits. (Penman, 2007).
In conclusion, basic earning power ratio (BEP) of the business
is also considered. The ratio would be calculated by dividing
the business EBIT by its total number of assets. Generation of
income form the assets is effective if the ratio is high. EBIT
sums in all the income earned by the company in calculating the
BEP ratio and hence showing how the company makes money.
Comparison of tax situations with the business is done using
BEP ratio (Saleem, 2011).
References
Nissim D, Penman SH. (2001). Ratio analysis and equity
valuation: From research to practice. Review of accounting
studies.
Penman SH. (2007). Financial statement analysis and security
valuation.
Saleem Q, Rehman RU. (2011). Impacts of liquidity ratios on
profitability.