Cinema Caf

Lahore School of EconomicsSubmission Date: 14/9/2014 Submitted by: Abdul Basit Student I.D:13E00104

ContentsExecutive Sumamry.3Introduction of the business5The Key People6Mission6Keys to Success7Market Segmentation9Environment11SWOT Analysis14Strengths of the Business14Weaknesses of the Business14Opportunities in the Marketplace14Threats in the Marketplace15Objectives15Marketing Plan16Promotional Strategies17Advertising17Product and services:18Management Summary20Activities Schedule23Projected Profit and Loss25Projected Cash Flow29Balance Sheet31

Executive SummaryThis is a business plan for a restaurant with the best quality food and open air screening of movies on a big cinema screen. Apart from the regular screening of the movies, gigs and concerts will be organized every Sunday night. Good food has always been a need of the Lahories. People of Lahore look for the new places where they can find the best quality food with an entertaining environment. Because of this, this new venture would be of great success because of the unique offering of live music and movie screening. Although the competition is immense in this industry. Every day we see the launch of new restaurants in Lahore, but very few succeed in surviving in this competition. People look for the uniqueness and our restaurant would be a totally new experience for the people of Lahore. In today's highly competitive environment, it is becoming increasinglymore difficult to differentiate one restaurant concept from another. Cinema Caf does this by being the only where one can get the fun of watching his/her favorite movie on the cinema screen along with the best quality food. Cinema Caf is a theater/restaurant business that believes there is a significant number of theater-goers that are craving a more satisfying and enjoyable way to catch a movie and a bit to eat. Cinema Caf is renovating the downtown Majestic Theater and creating a medium-size restaurant that will show second-run movies that have proven tostill be popular to our target market. We will offer a totally unique dining and movie experience at an affordable price that will fill the theater space with repeat customers.Cinema Caf is a one-stop movie theater and restaurant. We combine movies with a casual dining experience, featuring a full-service menu offering a wide selection of food. Choices include half-pounder burgers, homemade pizzas, chicken sandwiches, wings, french fries, appetizers, and fresh salads, along with mouth watering beverages. Of course, you can get traditional concession items such as soft drinks, candy, and fresh-popped popcorn. Food at Cinema Caf is not what you would expect. It is restaurant quality, cooked at the time of order placement, and served hot and delicious.With a warm atmosphere, more than reasonable pricing, exciting movies, rocking music, parties and events, outstanding food, and the beverage of your choice, Cinema Caf has all the right moves for the whole family.

Customer satisfaction is paramount. When approached by a customer with a request, our motto will be, "Yes is the answer; what is the question?" We will strive for broad appeal. We want to be the restaurant of choice for everyone: families and singles, young and old, male or female.Employee welfare will be equally important to our success. All will be treated fairly with the utmost respect. We want our employees to feel a part of the success of Cinema Caf. Happy employees make happy guests. We will combine menu variety, atmosphere, ambiance, and friendly staff to create a sense of "place" in order to reach our goal of over-all value in the dining/entertainment experience.Introduction of the business

Are you a food lover or a film buff? But why pigeonhole ourselves. For those of us who refuse categorization, then come and Experience the Outdoor Cinema and exciting gigs featuring the best quality food in Lahore. It's the ultimate picnic in the park - no basket required! Kick back and enjoy your gourmet street food in a beautiful park under the stars. Our outdoor cinema screenings will hopefully provide a boost to tourism by attracting hundreds of people to watch films in spectacular settings in future. Cinma Caf is a unique entertainment opportunity for you, your friends and family. Over here, one not only does get to see films for free in a fun and festive environment, but you also get to quality foods in deals. A variety of quality, reasonably priced snack items and beverages will keep customers satisfied during their movie experience. Admission is free - all you pay is the price of the mouth-watering meals you'll inevitably wind up purchasing. Good sight lines, the best of technology installed, and offer views to die for. It is the ultimate outdoor experience: great films, great sound, great food, and great company under the stars. We will be featuring films, matches on huge outdoor screen with the best quality food of your choice. Cinemagoers can relax with some quality food that we will provide at a nominal and affordable price, while listening to the sunset sounds of acoustic sets from emerging musicians. Food and movies go together like, well, popcorn and movies. Since food is one of the central themes of life, it stands to reason that it would make a good theme for the cinema. Name of the restaurant is cinema caf. The name is self explainatiry. It describes that the services would be something related to cinema and food. Our core services include best quality food with the screening of movies on a cinema screen for the customer to get the feeling and experience of every mode of entertainment. The name of the restuant truly reflects the services offered.Location of our resturant would be in the suburbs of Lahore. As it would be a 3 canals space so making the resturant in the suburbs would cost me comparitively low.The Key People

Employeesinclude hosts, kitchen staff, serving staff, technical staff, security staff and cleanup staff, sufficient to cover the hours of operation, prep-time and cleanup. Restaurant serving hours begin at 3 PM and the restaurant closes at 2:00 AM. Initially 10 people will be required for the operations where 4 will be in kitchen including a head chef, 2 for technical purposes, 2 for restaurant services and 2 for security purposes.

MissionCinema Cafs mission is to create a new theater experience for our customers that will be so enjoyable and satisfying that they will return often and recommend Cinema Caf to their friends and family. Our customers will be delighted with our level of service, the quality of the food, and a theater environment that is second to none. When the film ends and the applause die out, we believe that our customers will prefer to watch a new movie at Cinema Caf rather than to ever be squeezed into a Megaplex again.

Keys to Success Selection of popular films that work best in the group viewing environment; i.e. comedies, scary or adventure films. Provide exceptional service that leaves an impression. Consistent entertainment atmosphere and product quality. Managing our internal finances and cash flow to enable upward capital growth. Strict control of all costs, at all times, without exception. Hiring the best people available, training, motivatingand encouraging them, and thereby retaining the friendliest, most efficient staff possible.Industry AnalysisWho are the competitors?Due to the rapid growth in the entertainment industry in past few years there are many new cinemas entering the market. There are some who are well established in the market and can give my business a strong competition. Cinemas such as DHA Cinema and Cinestar are top at the list. It also includes Restaurants and cafes who present a potential complimentary offering that we might exploit later through strategic alliances.What percentage of the market share do they have?60 % to 70% of the market share is held by these giant companies where they give the services to their customers on regular bases and at a slightly less prices to maintain strong customer base to gain MAXIMUM OF THE MARKET share and through effective marketing policies .How long have they been in business?They are almost new entrants as this is a totally new trend that is being followed up and the competitors have been in the businesses for not more than five to six years a recent example of it can be DHA and cine stars that are recently come into entertainment based business activities

Is the market stable or changing, with new competitors entering and/or leaving?The market is changing as the social values attitudes and tastes of people are changing due to globalization and lot of new businesses are exploring the potential of the market an example of it can be new cafes and cinemas opening up in areas like DHA and Gulberg etc.What is the competitive edge of the principal competitor?These include their experience, brand name, economies of scale that they attain through operating efficiently, other variables that give them a competitive advantage over us in their high responsiveness to the change in needs and demands of their customersHow profitable and efficient are they?They are very profitable and efficient as they are very few in the number so only they maintain high market share. They maintain efficiency by providing quality food and entertainment at a very low price, so they are both at the same time profitable and efficientHow do customers rate the principal competitor?They rate them high as they provide services to them at very lower price by maintaining economies of scale and operating in the most cost effective manner.Are they active in the market place?Yes they are very active in the market as they keep an eye on the changing demands and needs of their customers by changing the product or modifying it. They have to be active in order to high market share

Market AnalysisWe believe that our unique dining environment with an unforgettable experience of movie screening and music will attractour target customers. Once inside, the customer will find watching a movie at comfortable seating, while enjoying great food, is an experience to repeat again and again with friends.We cannot survive just waiting for customers to come to us. Instead, we mustfocus on the specific market segments whose needs match our offerings. Focusing on targeted segments is the key to our future. We will attractcustomers with live performances anddistribution ofbrochures. Therefore, we need to focus our marketing message and our product offerings. We need to develop our message, communicate it, and make good on itMarket SegmentationFamilies: The focus will be on parents with children who want to catch a movie with food in the afternoon or early evening, before or after shopping at the downtown mall.Young Adults: The second group that will be focused is young adults ages 18 - 26 for the evening shows. We believe that this target group will enjoy this unique way to watch a film and Cinema Caf will become a common place for friends to have an affordable evening's entertainment together.

What are the boundaries of my target market?These are geographical boundaries by this I mean that I would not be possible to operate out of Lahore. Yes later on we shall extend our boundaries for a greater market share this can be done when we maintain a strong customer base Will I be dealing with more than one customer segment?I will be dealing with, more than one customer segment that includes the food lover, movie lovers and music lovers. My aim would be to target all the three segments.How often do they buy?They will avail my service as often as possible as it is totally entertainment based there would be only few customers from whom we can accept that that shall be rarely going to purchase our services .How much do they buy at one time?The type of service I shall be selling is not an individual based in fact people would like to come in groups or pairs there is very less probability that individuals will be attending that is why I assume the customers to be buying in deals

Do they buy randomly or at specific times?It can be both at specific times and randomly depending on the condition and the needs of the customer .for example in case a release of new movie or screening of football, cricket matches we can expect that customer will be buying for specific times but if there want to get regular entertainment then that will be randomly.Do some customers account for a high percentage of purchases?Yes they will account for high percentage of purchases as we plan to target the movie, fun and entertainment lovers .we can accept a much greater increase in percentage purchases with better movies and special screening of matches What percentage of the market can I expect in Year 1? Year 2? Year 3?In the first two three years we cant except to cater to a larger customer base because of the market share shall be very low for example in the first Year 1 around 4%, :Year 2: 7%, Year 3: Up to 12%What are the existing distribution channels and structure of the market?Market Structure is competitive as there are some competitors such as DHA Cinema, Cinestar. Our competitors will also be some cafes who offer the facility of match screening with food. They include Zee grill mini golf, Caf Rock, Hot Fuzon. So the market is competitive. The existing through internet, telecommunication and brochures EnvironmentWhat are the social trends?The social trends are changing over the years due to globalization as people are becoming more aware and socially active in the changing environment their values and believes are changing with the changing environment. Moreover, in this rapidly changing world where everyone is struggling, there are many few places where they can relax themselves and can spend the quality time with their friends and families.

What are the economical factors?Due to increase in competition and new companies entering the market, the prices of kitchen equipments have gone down. Moreover, the prices of projectors, sound systems and other technical appliances have also lowered. What are the political factors?There are some of the political forces e.g. IJT, J.I, etc. that are against all this which needs to be catered as these are totally against all such entertainment that we plan to sell to our customers Other political factors include the unstable government and their changing policies over time.What are the technological trends?There is always new technology coming up within the entertainment and food industry, which is more attractive to the people which help us in getting more customers attracted. Companies are coming up with innovation in technology. And people are more aware of the changing technological trends and expect the same from the growing entertainment industry.Demographics of the target market:My services will be used by the families as well as by the young adults. Age bracket of the consumers is 15 onwards. That will include mostly the students of different colleges and universities such as LSE, LUMS, NCA, BNU. Families - this segment focuses on adults and parents with younger children who don't need to see the latest movies on release and seek an inexpensive, quality, family-oriented entertainment experience. Young adults - this segment is comprised of the 16-35 year old age group. This group is interested in seeing comedy and action/adventure type movies that are not directed at the younger and family markets

What will be the key external influences in the marketplace in the next three years?The external influences include hyper inflation, slow economic growth, unstable government, higher interest rates, and energy crises. These factors can influence my business in a negative way, until these conditions are made favorable.How will these influences affect the competition?The above mentioned factors will have a negative effect on the competition. As, the profits will go down and all the competitors will look for developing such strategies which can help them in surviving in such a uncertain environment .As most of them will be experiencing diseconomies of scale.How will these influences affect my business?If the external influences that include inflation, strict government policies etc ten this will obviously make it difficult to survive but in case the external factors are favorable that include controlled inflation and friendly government policies then there will be less risk to start up the business. Strategy and Implementation Summary

Our strategy is simple; we intend to succeed by giving our target customers a combination of great food and a relaxed enjoyable environment that creates a memorable experience.Sales StrategyOur initial sales strategy is to flood our target consumers with free movie coupons for the firstthree months of operation. The Rs.100 chargefor the film will be waived with the coupon. These coupons will be in the city's daily paper as well as in the monthly magazines of different universities and colleges.The film charge is really incidental Cinema Cafs profits will come from food sales. Menu pricingwill reflectthis focus. Our prices will be higherthan a traditional restaurants but we believe the unique dining environmentwill justify those prices with our customers. SWOT AnalysisThis is a summary of the business's most important strengths, weaknesses, opportunities and threats.Strengths of the Business Excellent quality products Best quality food, music and movie all under one roof. Good management skills. Good ability to extract information.Weaknesses of the Business New Player"Which means that" Credibility problem may affect initial sales Lack of systems"Which means that" The company needs to develop systemised operational & sales techniques or sacrifice profitsOpportunities in the Marketplace Add-on products "Which means that" A potentially enormous market for the Cafe Cinema Business to tap into. Growing market segments."Which means that" our Cinema Caf Business should target all segments. Explore new markets in PakistanThreats in the Marketplace Increasing supplier prices."Which means that" Resulting in reduced profitability. Political instability.Objectives

General Objectives:

To provide our valued customers prompt and high quality food and service in a friendly and courteous manner To deliver a stunning, unbelievable,international menu to the customers with an excellent environment. To be the only option for food and movie lovers. To gain the customer loyalty by providing the best services in town. To keep our menu simple to maintain low food cost To maintain and expand an outstanding reputation as being the best hang out place in town.

Specific Objectives: To gain the 10% of the market share by the end of first year. Keeping food cost fewer than 30% of revenue. Keeping employee labour cost between 15-20% of revenue. To maximize the profit by exploring new markets in Pakistan.

Marketing Objectives: To ensure customer satisfaction and build a repeat-customer base. To entice regular customers to come back more often as well as introducing the restaurant to new customers To generate Cafes traffic by intensive marketing campaigns using email and social networking pages.

Management Objectives: To be socially responsible to the needs and challenges of society while minimizing the negative impact of such demands upon the Cafe To ensure proper staffing in each area of the theatre To perform daily opening and closing operational duties To assist employees in achieving their personal goals. To have a complete check on the motivation level of the employees.Financial Objectives: Salesover $600K the first year, more than a million by the third. Personnel costs less than $300K the first year. Profitable in first year, with net profits increasing each year. To have sponsorship from different big organizations.Marketing Plan

Competitive Edge:We are unique in a way that no other restaurant and cafe in Lahore is offering the screening of movies on such a big screen that we offer. It is a complete new experience for the customers. Here people can enjoy the best quality food with the screening of their favorite movies along with live exciting music. We will stand out with sustainable value, something that we can maintain and develop over timePromotional StrategiesAdvertising Develop a corporate brochure. Develop personalised business cards. Create Basic Website as a tool to promote services. The Cappuccino Caf will promote the business and specials over the Internet through a web presence. The website will be updated monthly to advertise specials and product offerings. Advertise in local publications Advertise monthly in magazines that are specifically targeted to the movie and food lovers. Advertise monthly in magazines that are aimed at the general industry.Website:Thewebsite will be initially developed with few technical resources. We will work with a contracted user interface designer to develop the simple, classy, yet Internet focused site. The user interface designer will work with a graphic artist to come up with the website logo, and the website graphics. The website will include the complete information regarding the menu and the schedule of movies. Moreover, discount coupons will also be offered at the website.

Management Team & Company Structure:

Product and services:

The Menu: The menu is extremely simple Choices include half-pounder burgers, homemade pizzas, chicken sandwiches, wings, French fries, appetizers, and fresh salads, along with mouth watering beverages. Movies: The films will be chosen with two target audiences in mind. The first is the families that will come to Cinema Caf to watch movies like Shrek and Spy Kids. These movies will be shownthree times during the afternoon. The second group is young adults who will come to the evening shows to watch movies like Jeepers Peepers, the Fast and the Furious, and Rush Hour 2. There will bethree evening showings of these films. In addition, there will be midnight movies for the college crowd on Friday and Saturday.Music:Concerts and gigs will be organized on Sunday nights. Musical bands from all over the city will be given a chance to perform live in front of the audience. They will be selected on the basis of auditions.

Management SummaryInitially I will be responsible for hiring, training and supervision of all restaurant staff. With the passage of time, professional managers will be hired in order to have a proper check on the overall work of the staff. And the managers will be answerable for their performances.Planning operations: All the marketing and advertisement campaign will be initially carried out by me. The decisions making authority will be lead by me and all the decisions will be made by my consent. The menu and all the requirements of the restaurants and cinema will be decided by me.Formulating a people plan: Kitchen staff will be hired on the basis of their experiences and specialities Staff will be hired after complete session of interviews and tests Other staff including waiters, technical staff security staff will be hired keeping in mind the requirement of the business. There will be a completer check of the performance of the employees and managers will be answerable regarding their performances Training session will be carried out in order to train the staff with the changing needs.Plan for premises: The premises of the restaurant will be 3 canals of land. It will be in the suburbs of Lahore which will cost me a bit less. The office will be located within the premises of the restaurant including an executive room, a conference room and the waiting area.Plan for Equipment: Technical equipments: Projector, Cinema Screen, sound system, sound mixer, lights e.t.c. Kitchen accessories: It includes all the required machineries for the kitchen. It also includes sheesha. Easy chairs with tables.Plan for materials: Cutlery: It includes disposable plates, glasses, spoons e.t.c. Other necessities such as tissue papers, stationary items, dustbins e.t.c. All the ingredients required in the process of food makingHow people would be managed:People would be managed on the basis of their performance. Proper training sessions will be given to the staff and senior employees would be expected to train the junior employees. Performance of every individual will be closely monitored and on the basis of the performance, bonus and incentives will be given. How to recruit, retain and motivate staff:A complete session of interview and tests will be carried out in order to hire the best staff. The hired staff will be trained by the professionals. Regular training sessions will be carried out for the changing customers needs. Bonus and incentives will be given on the monthly basis. On the basis of hard work and good performance, employee of the month will be nominated which will be provided with a special bonus. This would increase the motivation level of the employees. What will be your employment practices and how will you operate payroll and personnel systems?Pay structure would be monthly based. Pay would be transferred to the employees account within first five days of the month.

How will you develop entrepreneurial team with all the required roles filled?Employees will be motivated through bonuses and incentives. Work will be taken by the employees in such a way that they do not feel it as a burden. Their requirements will be closely viewed. Senior staff is required to motivate the junior staff and help them with their problems. Moreover, senior staff will be in a direct contact with the CEO and they would be answerable to the CEO regarding any problem. Operations PlanMarketing Policies: Heavy advertisement will be done initially on social media websites. Other advertisement channels such as radio, magazines, T.V will also be explored later on. Discount coupons will be given to the leading universities and colleges of Lahore. For the first six months 10 % of the profit will be allocated for advertising. City 42 which caters to the market of Lahore will be used for the advertisements for the first six months.Management Policies: Experienced staff will be hired after a complete session of interview and tests. Regular training sessions will be carried out for the changing needs of the customers. Senior staff is answerable for the performance of the junior staff. Salary will be monthly based and will be transferred into the accounts of the employees within the first five days of the month.Financial Policies: All the calculations and financial analysis will be initially carried out by the CEO. Later on an expert will be hired for these purposes. The prices of food and movies will be set by the CEO. There will be no deal on credit basis. Sponsorship from the companies will be evaluated by the CEO and the decision authority lies with him.

Activities Schedule

Month/dateActivity

1st monthTo hire the best staff for the operations

2nd monthPromotion of the restaurant. Initially through social media websites and cheap advertisements in magazines and newspaper.

3rd monthLook for the problems in all departments and come up with the solution.

4th monthHire more experienced and specialized staff for kitchen.

5th monthStart evaluating the feedback of the customers and will start working on the changing needs.

6th monthEvaluating the performance of the first six months and set goals for the next six months.

6-12monthsKeep a close eye on all the operations and feedback of the customers. Increase pays for the employees. Hire new staff if needed

1-2yrLook for other potential markets the business could enter. Making a research on how innovative the idea would be in other potential cities.

Product/ Service Design & Development Plan:Development Plan:Year 1Year 2Year 3

Potential CustomersGrowthCAGR

Families15% 400,000 460,000 529,000 15.00%

Young Adults10% 200,000 220,000 242,000 10.00%

Total13.41% 600,000 680,000 771,000 13.41%

Financial Projections:I will invest Rs. 300,000 of my own capital. This will provide the start-up financing required. Our market and financial analyses indicate that with a start-up expenditure of Rs300,000 we can generate Rs. 600,000 in sales by the end of year one, and produce high net profits by the end of year three.

Rs. 1,200,000Rs. 1,000,000Rs. 800,000Rs. 600,000Rs. 400,000Rs. 200,000Rs. 0

Projected Profit and LossThe following table and chart showsprojected profit and loss

Rs. 15,000Rs.12,000Rs. 9,000Rs. 6,000Rs. 3,000Rs. 0(Rs. 3,000)(Rs. 6,000)(Rs. 9,000)(Rs. 12,000)

Rs. 210,000Rs. 180,000Rs. 150,000Rs. 120,000Rs. 90,000Rs. 60,000Rs. 30,000Rs. 0

Rs. 60,000Rs. 50,000Rs. 40,000Rs. 30,000Rs. 20,000Rs. 10,000Rs. 0

Rs. 700,000Rs. 600,000Rs 500,000Rs. 400,000Rs. 300,000Rs. 200,000Rs. 100,000Rs. 0

Pro Forma Profit and Loss

Year 1Year 2Year 3

SalesRs.692,100 Rs.860,000 Rs.1,150,000

Direct Cost of SalesRs.177,255 Rs.213,500 Rs.$287,000

Movie Screening ExpensesRs.77,861 Rs.96,750 Rs.129,375

Total Cost of SalesRs.255,116 Rs.310,250 Rs.416,375

Gross MarginRs.436,984 Rs.549,750 Rs.733,625

Gross Margin %63.14% 63.92% 63.79%

Expenses

PayrollRs.288,000 Rs.307,000 Rs.326,000

Sales and Marketing and Other ExpensesRs.22,600 Rs.8,000 Rs.8,000

DepreciationRs.0 Rs.0 Rs.0

Leased EquipmentRs.0 Rs.0 Rs.0

UtilitiesRs.14,400 Rs.14,400 Rs.14,400

InsuranceRs.21,600 Rs.21,600 Rs.21,600

RentRs.24,000 Rs.24,000 Rs.24,000

Payroll TaxesRs.43,200 Rs.46,050 Rs.48,900

OtherRs.0 Rs.0 Rs.0

Total Operating ExpensesRs.413,800 Rs.421,050 Rs.442,900

Profit Before Interest and TaxesRs.23,184 Rs.128,700 Rs.290,725

EBITDARs.23,184 Rs.128,700 Rs.290,725

Interest ExpenseRs.0 Rs.0 Rs.0

Taxes IncurredRs.6,955 Rs.38,610 Rs.87,218

Net ProfitRs.16,229 Rs.90,090 Rs.203,508

Net Profit/Sales2.34% 10.48% 17.70%

Projected Cash Flow

Rs. 210000Rs.180,000Rs. 150,000Rs. 120,000Rs. 90,000Rs. 60,000Rs. 30,000Rs. 0

Pro Forma Cash Flow

Year 1Year 2Year 3

Cash Received

Cash from Operations

Cash SalesRs.692,100 Rs.860,000 Rs.1,150,000

Subtotal Cash from OperationsRs.692,100 Rs.860,000 Rs.1,150,000

Additional Cash Received

Sales Tax, VAT, HST/GST ReceivedRs.0 Rs.0 Rs.0

New Current BorrowingRs.0 Rs. 0 Rs.0

New Other Liabilities (interest-free)Rs.0 Rs.0 Rs.0

New Long-term LiabilitiesRs.0 Rs.0 Rs.0

Sales of Other Current AssetsRs.0 Rs.0 Rs.0

Sales of Long-term AssetsRs.0 Rs.0 Rs.0

New Investment ReceivedRs.0 Rs.0 Rs.0

Subtotal Cash ReceivedRs.692,100 Rs.860,000 Rs.1,150,000

ExpendituresYear 1Year 2Year 3

Expenditures from Operations

Cash SpendingRs.288,000 Rs.307,000 Rs.326,000

Bill PaymentsRs.337,234 Rs.475,500 Rs.607,541

Subtotal Spent on OperationsRs.625,234 Rs.782,500 Rs.933,541

Additional Cash Spent

Sales Tax, VATRs. 0Rs.0Rs.0

Principal Repayment of Current BorrowingRs.0Rs.0Rs.0

Other Liabilities Principal RepaymentRs.0Rs.0Rs.0

Long-term Liabilities Principal RepaymentRs.0Rs.0Rs.0

Purchase Other Current AssetsRs.0Rs.0Rs.0

Purchase Long-term AssetsRs.0Rs.0Rs.0

DividendsRs.0Rs.0Rs.0

Subtotal Cash SpentRs.625,234 Rs.782,500 Rs.933,541

Net Cash FlowRs.66,866 Rs.77,500 Rs.216,459

Cash BalanceRs 216,066 Rs 293,566 Rs 510,026

Balance SheetThe table shows projected balance sheet for three years.

Pro Forma Balance Sheet

Year 1Year 2Year 3

Assets

Current Assets

CashRs.216,066 Rs.293,566 Rs.510,026

Other Current AssetsRs.10,000 Rs.10,000 Rs.10,000

Total Current AssetsRs.226,066 Rs.303,566 Rs.520,026

Long-term Assets

Long-term AssetsRs.0 Rs.0 Rs.0

Accumulated DepreciationRs.0 Rs.0 Rs.0

Total Long-term AssetsRs.0 Rs.0 Rs.0

Total AssetsRs.226,066 Rs.303,566 Rs.520,026

Liabilities and CapitalYear 1Year 2Year 3

Current Liabilities

Accounts PayableRs.50,638 Rs.38,047 Rs.50,999

Current BorrowingRs.0 Rs.0 Rs.0

Other Current LiabilitiesRs.0 Rs.0 Rs.0

Subtotal Current LiabilitiesRs.50,638 Rs.38,047 Rs.50,999

Long-term LiabilitiesRs.0 Rs.0 Rs.0

Total LiabilitiesRs.50,638 Rs.38,047 Rs.50,999

Paid-in CapitalRs.300,000 Rs.300,000 Rs.300,000

Retained Earnings(Rs.140,800)(Rs.124,571)(Rs.34,481)

EarningsRs.16,229 Rs.90,090 Rs.203,508

Total CapitalRs.175,429 Rs.265,519 Rs.469,026

Total Liabilities and CapitalRs.226,066 Rs.303,566 Rs.520,026

Net WorthRs.175,429 Rs.265,519 Rs.469,026

RatiosYear 1Year 2Year 3

Current4.46 7.98 10.20

Quick4.46 7.98 10.20

Total Debt to Total Assets22.40% 12.53% 9.81%

Return on Equity9.25% 33.93% 43.39%

Debt to Net Worth0.29 0.14 0.11

Current Debt/Total Assets22% 13% 10%

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