PAPA GEO’S RESTAURANT13Papa Geo’s RestaurantBudget Proposal.docx

PAPA GEO’S RESTAURANT13
Papa Geo’s Restaurant
Budget Proposal
for
[2020-2024]
Table of Contents
Section
Title
Subsection
Title
Page Number1.0Executive Summary
42.0Sales Forecast
4
2.1Sales Forecast

2.2Methods and Assumptions
3.0Capital Expenditure Budget
44.0Investment Analysis
5
4.1Cash Flows
5
4.2NPV Analysis
5
4.3Rate of Return Calculations
6
4.4Payback Period Calculations
65.0Pro Forma Financial Statements
7
5.1Pro Forma Income Statement
7
5.2Pro Forma Balance Sheet
7
5.3Pro Forma Cash Budget
86.0Works Cited

87.0Appendices
8
7.1Appendix 1: [description]
7.2Appendix 2:
[description]
1.0 Executive Summary
Papa Geo’s Restaurant needs to be competitive and unveil
marketing crusades to protect their returns in the business.
However, it is guided by typical objectives in the marketing
plan. The first objective of the restaurant is ensuring customer
satisfaction and loyalty. The target market entails about 10,000
families which is a totality of lower to middle class clients with
zero direct competition. However, the customers’ satisfaction is
determined the customer’s loyalty to the restaurant especially
due to the services that they receive. The restaurant wins the
customers through the good Italian food of low price. Stunning
cleanliness of the restaurant is welcoming and eye catching
which applies to both the foods served and the environment.
Generation of the restraint traffic will impact the Restaurant
towards success. The restaurant will cultivate a customer base
such as having demanding lunchtimes and dinner services
through intensive marketing. It will achieve this through weekly

and monthly promotions as the marketing strategies.
The restaurant needs to attain their financial goals. The
objective is to meet the financial income goal of $40000
annually. At the starting of the second year the company
expects to attain a minimum of 2% profits of the sales. The
main objective of the restaurant is profitability. It is attainable
with the managerial ability to achieve the weekly goals
especially through cost reduction with profitability growth
concurrently.The restaurant needs to develop a restaurant brand.
As the restaurant grows successfully, it will improve it’s place
in the local market and toughen the brand. The quality of the
food served has a great influence on the restaurant branding.
The company purposes to cook using healthy products and use
the brand to win new customers (Myers, 2019).
2.0 Sales Forecast
The sales forecast table illustrates the restaurants ability to
offer services to the clients through listing the total services
sold and the net sales in every year.2.1 Sales Forecast
Year 1
Year 2
Year 3
Year 4
Year 5
Sales
$1,074,150
$2,157,700
$2,390,100
$2,625,920
$2,880,040

The sales are expected to rise each year as the restaurant
continues to gain a higher customer base each year through
marketing.2.2 Methods and Assumptions
The sales forecast figures were obtained from the customer
surveys which are based on the Italian fast food industry. Using
the historical analysis of other restaurants with similar services
and the customer base similar to that of this restaurant, we were
able to structure the sales for each year in the next five years.
3.0 Capital Expenditure Budget
year 1
year 2
year 3
year 4
year 5
$204,360
$393,000
$411,800
$440,500
$460,700
(payroll)
$50,000
$53,000
$53,000
$52,000
$50,000
(marketing)

$25,000
$30,000
$34,000
$37,000
$41,000
(utilities)
$12,000
$38,000
$43,000
$44,000
$45,000
(repairs/maintainance)
$2,400
$10,000
$11,000
$13,000
$15,200
(dishes/ cleaning supplies)
$15,000
$18,000
$22,000
$24,000
$31,000
(employee healthcare)
$17,000
$50,000
$50,000
$50,000
$5,000
(rent)

$325,760
$606,000
$624,800
$660,500
$647,900
This data was gathered from numerous consumer surveys of the
fast food industry. Using the data, we were able to develop the
most crucial costs for every restaurant and then estimate the
increment of capital expenditure as the restaurant’s sales grow.
4.0 Investment Analysis

The discount rate used in the calculations is 5 % since it is the
most dominant rate that most restaurants similar to this one use
(Van den Berghe.et.al, 2019). The net present value of the firm
is calculated as $2,695,521
which illustrates that the company’s investment is very
productive. In addition, the rate of return in all years indicates
that the company’s profitability is approximately twice the
amount of investment that was made.4.1 Cash flows
year 1
year 2
year 3
year 4
year 5
$1,074,150
$2,157,700
$2,390,100
$2,625,920
$2,880,040
(cash sales)
$69,045
$134,673
$148,117
$162,899
$179,146
(taxes)
$10,300
$12,000
$13,000
$14,000
$15,000
(sales of current assets)
($204,360)
($393,200)
($411,860)

($431,453)
($451,717)
(cash spending)
($570,420)
($1,380,599)
($1,493,514)
($1,619,145)
($1,758,632)
(bill payment)
$378,715
$530,574
$645,843
$752,221
$863,837
(net cash flow)
$495,311
$1,112,740
$1,537,093
$2,508,380
$2,647,942
(cash balance)
4.2 NPV Analysis
npv

year 1
year 2
year 3
year 4
year 5
$378,715
$530,574
$645,843
$752,221
$863,837
$360,680.00
$481,246
$557,903
$618,854
$676,838
Npv
$2,695,521
4.3 Rate of Return
current value of investment
original value of investment
rate of return
year 1
1,000,000
250,000
400

year 2
2,000,000
1,000,000
200
year 3
2,200,000
1,500,000
147
year 4
2,500,000
1,700,000
147
year 5
2,900,000
1,900,000
152
4.4 Payback Period
cash inflow
cumulative cash flows
initial oulay
remaining payment
year1
$378,715
$378,715
-1,000,000
-621,285
year 2
$530,574
$909,289
288,004
year 3
$645,843

$1,555,132
year 4
$752,221
$2,307,353
year 5
$863,837
$3,171,190
$3,171,190
payback period is two years
5.0 Pro forma Financial Statements

This section represents the financial analysis of the activities
which takes place within the restaurant. It helps us understand
the profitability of a firm, its cash inflows and outflows as well
as the amounts of assets and liabilities that a company possesses
(Fernando, 2019)5.1 Pro Forma Income Statement
pro formula income statement
year 1
year 2
year 3
year 4
year 5
net sales
$1,074,150
$2,157,700
$2,390,100
$2,625,920
$2,880,040
direct costs of sales
$375,103
$700,340
$770,238
$847,101
$931,564
operating expenses
$325,760
$606,000
$624,800
$660,500
$647,900
taxes incurred

$114,899
$200,001
$238,831
$281,506
$328,753
net profits
$258,388
$651,359
756,231
$836,813
$971,823
5.2 Pro Forma Balance Sheets
pro forma balance sheet
cash
$495,311
$1,112,740
$1,537,093
$2,508,380
$2,647,942
inventory
$14,331
$26,756
$29,427
$32,364
$35,591
Other Current Assets
($10,300)

($22,300)
($35,300)
($49,300)
($64,300)
net current assets
$499,342
$1,117,196
$1,531,220
$2,491,444
$2,619,233
longterm assets
$0
$0
$0
$0
$0
liabilities
current borrowing
0
$0
$0
$0
$0
accounts payable
$98,320
$114,831
$123,464
$133,942
$145,495
other current liabilities
$69,045

$203,718
$351,835
$514,734
$693,880
net current liabilities
$167,364
$318,549
$475,299
$648,675
$839,374
earnings
$258,388
$651,359
756,231
$836,813
$971,823
5.3 Pro Forma Cash Budget
pro forma cash flows
cash sales
$1,074,150
$2,157,700
$2,390,100
$2,625,920
$2,880,040
sales of current assets
$10,300
$12,000

$13,000
$14,000
$15,000
cash spending
($204,360)
($393,200)
($411,860)
($431,453)
($451,717)
additional cash spent
($570,420)
($1,380,599)
($1,493,514)
($1,619,145)
($1,758,632)
net cash flow
$309,670
$395,901
$497,726
$589,322
$684,691
cash balance
$495,311
$1,112,740
$1,537,093
$2,508,380
$2,647,942
6.0 Works Cited
List any sources you cited in the body of your report.
Fernando, H. S. K. S. B. (2019). Business Proposal on Rail
Carriage Manufacturing&Repairing Plant in Sri Lanka (Master's
thesis, 华南理工大学).
Myers, M. D. (2019). Qualitative research in business and

management. Sage Publications Limited.
Van den Berghe, H., De Meyere, M., Denys, K., & Calcoen, J.
(2019). Proposal business plan WRC network-December
2019. Proposal business plan WRC network-December 2019.
7.0 Appendices
NOTE: Start this section at the top of a new page.
This section of the budget proposal is where you’ll attach all of
the supporting materials that you’ve referenced in the
preparation of your plan and that is too detailed or extensive to
be included in the body of the report. Use this page to separate
the appendices from the text in the body of your report. Make
certain that you update the table of contents to include the title
of each exhibit in the appendix and its page number.7.1
Appendix 1: [put a description here]7.2 Appendix 1: [put a
description here]7.3 Appendix 1: [put a description here]
Export SummaryThis document was exported from Numbers.
Each table was converted to an Excel worksheet. All other
objects on each Numbers sheet were placed on separate
worksheets. Please be aware that formula calculations may
differ in Excel.Numbers Sheet NameNumbers Table NameExcel
Worksheet NameInstructionsTable 1Instructions2.1 & 2.2 Sales
ForecastTable 12.1 & 2.2 Sales Forecast3.0 Capital Expenditure
BudgetTable 13.0 Capital Expenditure Budget4.1
CashflowsTable 14.1 Cashflows4.2 NPV AnalysisTable 14.2
NPV Analysis4.3 Rate of Return CalculationsTable 14.3 Rate of
Return Calculations4.4 Payback Period CalculationsTable 14.4
Payback Period Calculations5.0 Pro Forma FinancialsTable 15.0

Pro Forma Financials
InstructionsBUSN278 Budgeting and Forecasting Template
InstructionsUse this spreadsheet structure to lay out the various
sections of your project.The purpose of this spreadsheet is to
make it easy for your professor to locate the various sections of
your project. Please don't alter the worksheet tabs or titles.After
you finish your calculations in this spreadsheet, you will have
tocreate a written report in which you take screenshots from this
spreadsheetand put them in the Budget Proposal Template,
along with necessary explanations. Detailed instructions for
how to write the reportare found in the Budget Proposal
Template, a Word document.
&"Helvetica Neue,Regular"&12&K000000&P
2.1 & 2.2 Sales Forecastsales year 1year 2year 3year 4years
5pizza$560,000$1,053,000$1,158,000$1,274,120$1,401,540soda
$45,100$89,000$98,000$107,000$120,000salad$46,000$93,000
$105,000$117,000$125,000pastas$374,850$737,200$820,000$9
00,000981,000soup$39,000$75,000$89,000$95,000$104,500des
serts$55,200$110,500$120,100$132,800$148,000total
sales$1,074,150$2,157,700$2,390,100$2,625,920$2,880,040
3.0 Capital Expenditure Budgetyear 1year 2year 3year 4year
5$204,360$393,000$411,800$440,500$460,700(payroll)$50,000
$53,000$53,000$52,000$50,000(marketing)$25,000$30,000$34,
000$37,000$41,000(utilities)$12,000$38,000$43,000$44,000$4
5,000(repairs/maintainance)$2,400$10,000$11,000$13,000$15,2
00(dishes/ cleaning
supplies)$15,000$18,000$22,000$24,000$31,000(employee
healthcare)$17,000$50,000$50,000$50,000$5,000(rent)$325,76
0$606,000$624,800$660,500$647,900
4.1 Cashflowsyear 1year 2year 3year 4year
5$1,074,150$2,157,700$2,390,100$2,625,920$2,880,040(cash

sales)$69,045$134,673$148,117$162,899$179,146(taxes)$10,30
0$12,000$13,000$14,000$15,000(sales of current
assets)($204,360)($393,200)($411,860)($431,453)($451,717)(ca
sh
spending)($570,420)($1,380,599)($1,493,514)($1,619,145)($1,7
58,632)(bill
payment)$378,715$530,574$645,843$752,221$863,837(net cash
flow)$495,311$1,112,740$1,537,093$2,508,380$2,647,942(cash
balance)
4.2 NPV Analysisnpvyear 1year 2year 3year 4year
5$378,715$530,574$645,843$752,221$863,837$360,680.00$481
,246$557,903$618,854$676,838Npv$2,695,521
4.3 Rate of Return Calculationscurrent value of
investmentoriginal value of investmentrate of returnyear
11,000,000250,000400year 22,000,0001,000,000200year
32,200,0001,500,000147year 42,500,0001,700,000147year
52,900,0001,900,000152
4.4 Payback Period Calculationscash inflowcumulative cash
flowsinitial oulayremaining paymentyear1$378,715$378,715-
1,000,000-621,285year 2$530,574$909,289288,004year
3$645,843$1,555,132year 4$752,221$2,307,353year
5$863,837$3,171,190$3,171,190payback period is two years
5.0 Pro Forma Financialspro formula income statementyear
1year 2year 3year 4year 5net
sales$1,074,150$2,157,700$2,390,100$2,625,920$2,880,040dire
ct costs of
sales$375,103$700,340$770,238$847,101$931,564operating
expenses$325,760$606,000$624,800$660,500$647,900taxes

incurred$114,899$200,001$238,831$281,506$328,753net
profits$258,388$651,359756,231$836,813$971,823pro forma
cash flowscash
sales$1,074,150$2,157,700$2,390,100$2,625,920$2,880,040sale
s of current assets$10,300$12,000$13,000$14,000$15,000cash
spending($204,360)($393,200)($411,860)($431,453)($451,717)a
dditional cash
spent($570,420)($1,380,599)($1,493,514)($1,619,145)($1,758,6
32)net cash
flow$309,670$395,901$497,726$589,322$684,691cash
balance$495,311$1,112,740$1,537,093$2,508,380$2,647,942pro
forma balance
sheetcash$495,311$1,112,740$1,537,093$2,508,380$2,647,942i
nventory$14,331$26,756$29,427$32,364$35,591Other Current
Assets($10,300)($22,300)($35,300)($49,300)($64,300)net
current
assets$499,342$1,117,196$1,531,220$2,491,444$2,619,233longt
erm assets$0$0$0$0$0liabilitiescurrent
borrowing0$0$0$0$0accounts
payable$98,320$114,831$123,464$133,942$145,495other
current
liabilities$69,045$203,718$351,835$514,734$693,880net
current
liabilities$167,364$318,549$475,299$648,675$839,374earnings
$258,388$651,359756,231$836,813$971,823

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