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The projection of my business for the next coming years is very good and positive. I can say that my restaurant is profitable and has a high chance for expansion. The cash flow forecast of the first year has high figures

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Introduction

Task D Business Projection Cash flow Projection (2008 - 2009) For the next two years, the restaurant's future will depend on the cash flow forecast. By this, we could monitor the money coming in and out. We could monitor the expenditures that the business may have facing, whether spending more on stocks and increasing the wages of the employees. Cash flow forecast is really helpful to keep the business on track on what is happening on the financial side of the business. For the start of the year 2008 and 2009, the opening balance of my business is �72724.8 and �159703.6. These amounts of money are the closing balance from December of both years. To increase the sales, I have made an advertisement in January 2008 to promote the business. Promoting the business for the first month of the year is good because this could be a good start to increase the flow of customers and of course to increase the sales. For this month, the total sales is �22000. This amount of money is not that bad, but if we compare this to last year when the restaurant first opened, both sales are almost the same. ...read more.

Middle

This means that I will have a 101% return on capital that I invested. The business' sales for the first year is good as it means that we are improving since the restaurant started operating. This is a good sign because if we double or triple the sales for the next coming years, I may be able to set up another business because of the money coming in to the business. Gross Profit Margin I will be calculating the Gross Profit Margin to measure the restaurant's manufacturing and distribution efficiency during one year of production process. To calculate the gross profit margin I will be using this formula, Gross Profit x 100 Sales 256500 x 100 = 96.7% 265000 My business has high Gross Profit Margin which means that we still manage the cost of sales in very competitive prices of our products. The sales that we had for the first year is good to compare against other businesses that are just starting. We can increase the percentage if we continue to earn good sales for the coming years. Net Profit Margin The profit margin tells me how much profit the restaurant can make for every �1 it generates in revenue. ...read more.

Conclusion

This could be expensive, but this can increase the sales and earn more profit. Due to inflation, the demand increases and stock prices goes up which means I need to spend more money on stocks and increase the wages of my employees. I have predicted that we can increase our sales because of our loyal customers and my restaurant starting to make its name to the market, so there is no problem spending more on stocks, advertisements and employee' wages. At the moment, my business has no current liabilities as it means that some money are not being used and might end up as a waste. The liquidity of my business is too high and therefore I might open another restaurant to use the money properly. This is my plan after the first 3 years of operation. Setting up another restaurant could be a big gamble. But with proper knowledge and experience, it could turn out as a success. With the help of fully trained and motivated staff and performing proper promotion, increasing the number of customers every day is not impossible and earning high profit is at hand. The quality of the food and service is the key for success. ?? ?? ?? ?? Daryl Llanes Business Examination Unit 8 ...read more.

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