The owner is planning to open a theme restaurant which will have Chinese characteristic food. The startup is planning to carry forward Chinese food all over the world. The restaurant needs the waiters to be bilingual speaking both English and Chinese. The specific requirement for the waiters has made their hiring cost higher than the average salary of the waiters in Canada. The restaurant will have separate space for business conferences and kids zone. The company has requirement of highly experienced manager in food and tourism industry. The company has offered a higher level of salary to its both managers. As the owner of the restaurant is not fetching any profit from restaurant at the beginning, therefore, it has been offered salary as manger to compensate for the same.
The main obstacle that the company is facing is due to lack of standard management for Chinese fast food in Canada. The emphasis is mostly on cooking skills instead of standard management for the Chinese cuisine. Second, they don’t have enough awareness of localization. Some Chinese restaurants dishes biased in favor of the Chinese people’s eating habits in the taste, and thus failed to attract the attention of mainstream western consumers.
In accordance with the above table, the start – up requires a loan of CAD 30,000/- as seed money. For working capital requirements, creditor will provide the amount required which has to be paid in the next operating cycle. The interest rate is 12% per annum floating rate and loan to be payable in 20 years.
Financial performance Indicator
As it is a start up business, the financial indicators will provide an overview of the feasibility of the project. Main financial indicators are as follows –
Customer acquisition cost
Total cost acquired to acquire the customers is known as customer acquisition Cost.The Company’s customer acquisition cost shows it has higher CAC in the beginning of the month and it declines over time.
Financial management metrics
Burn rate in simple word means how much cash goes out of the company every month. The projected cash flow provides an idea for burn rate. On analysis of the cash flow statement, it has been concluded that almost similar cash flow occurs in almost all month, therefore, company has constant burn rate.
The company has shown a constant gross and margin over time. In initial years, the company has lower gross margin but in coming years, its margin increases as COGS decreases over time.
Ratio analysis (projection)
Return on total asset
Return on asset can be calculated as follows –
Earnings available to common share holder/ total asset
It represents the return available on total asset. In simple word, it indicates how profitable a company is relative to total assets.
Return on Investment
The investment made by the owners was for the fund of 20,000 CAD. In the beginning of the year, company does not have any return available. From third year, return on investment made is available to the investors.
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