Key factors on which profit performance depends • • •
• •
Customer - being more than able to satisfy customers (good food, service and good atmosphere) Meet the needs of the community - for which extensive market research is being carried out Controlling costs - always being cost conscious and ensuring that actual expenses do not cross budgets Meet the needs No of customers
FINANCIAL PROJECTIONS Operating Results Notes
1. Interest is payable @ 6.95% on a bank loan of $ 162,000 2. Advertising - Cornucopia advertises in 3 local newspapers; on radio 2ws and drops brochures to the local community including RAAF 3. Wages currently cover 5/8 employees and there is a move of one of the partners joining the business on a full time basis 4. Telephones - Cornucopia proposes to employ a Business Development Manager who will be contacting customers via the telephone to improve and further develop the business. 5. GST : a thought has been given to GST (which is said will affect medium businesses) but since technical details about GST are not available, much headway could not be made Table 1 Income and expenditure statement Weekly Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $10,000 $130,000 $520,000 $546,000 $575,300 $601,965 $632,063 5%/Sales $600 $26,000 $27,300 $28,000 $30,000 $31,500 $50 $600 $1,200 $1,500 $1,800 $1,900 $2,000 $1,450 $18,850 $75,400 $75,400 $76,000 $78,000 $80,000 $20 $260 $1,040 $1,040 $1,100 $1,200 $1,500 $100 $1,300 $5,200 $5,200 $5,300 $5,400 $5,500 $2,500 $36,400 $156,000 $200,000 $200,000 $210,000 $215,000 $100 $300 $400 $500 $600 $650 $237 $3,081 $12,424 $12,500 $12,500 $12,500 $12,500 $90 $4,680 $4,680 $4,680 $4,680 $4,680 $4,680
Sales Advertising Telephones Rent & Outgoings Water Electricity Wages Postage Interest Insurance & Workers Compensation Depreciation Mortgage Gas Fuel Purchases Total Expenses
$400 $80 $30 $3,000
EBT
$1,250 $5,000 $5,000 $6,000 $6,000 $6,500 $5,200 $20,800 $20,800 $20,800 $20,800 $20,800 $1,140 $1,500 $1,500 $1,700 $1,900 $2,000 $390 $1,440 $1,500 $1,700 $1,900 $2,000 $39,000 $156,000 $163,000 $172,590 $180,589 $189,618 $112,851 $466,984 $519,820 $532,670 $555,469 $574,248 $17,149
$53,016
$26,180
$42,630
$46,496
$57,815
Operating Results Comment on how these were derived. Table 2 Estimated Balance Sheet - Cornucopia Cafe
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