Financial Analysis and Management

Financial Analysis and Management



TABLE OF CONTENT

SECTION-1 EXECUTIVE SUMMARY1

SECTION-2 INTRODUCTION2

Concepts and Methodologies2

SECTION-3 RESEARCH CONTRIBUTIONS MADE FROM EXISTING LITERATURE3

Present Environment of the Franchise based business3

Industry Analysis4

Objective of the Red Chilli Ltd5

SECTION-4 FINDINGS, ANALYSIS AND EVALUATE-DEVELOP6

Financial Estimates6

Budget and Budgetary Control8

Sales Budget8

Production Budget8

Materials Purchase Budget9

Labour Budget9

Overhead Budget9

Capital Expenditure Budget10

Cash Receipts Budget11

Cash Disbursement Budget11

Cash Budget12

Budgeted Income Statement13

Budgeted Balance Sheet14

SECTION-5 CONCLUSION AND RECOMMENDATIONS - POTENTIAL APPLICATION16

Monitoring Performance of the Red Chilli Ltd16

Regulation and Budget16

Financial Turnover and Budget17

Management Decisions And Actions18

RECOMMENDATION20

SECTION-6 REPORT REFLECTION20

REFERENCES22

Section-1 Executive Summary

This report is about good budgetary planning and control system in the organisation to ensure the efficient and effective use of resources, the maintenance of sound internal control, Sound management decision-making, Accountability and lastly the Remedial action is taken where needed. Budget offers a worthful assistance to management through planning, coordination and control. The basic concept behind the budget is the measurement of the managerial performance of the organisation. It encourages good team spirit and generates harmony with the company. Beside this, budget also encourages competence and amenities management by exceptions. A feeling of cost consciousness is promoted by the preparation of budgets among employee. As budgets are prepare on the estimation or previous trend which might or might not be true. It should be known that budgetary system's efficiency and utility depends upon the management skills and experience. Continuous efforts are essential for the budget execution as it cannot be performed automatically. In case of “Red Chilli Ltd” Trading as Subway and a Franchise based business, currently the Ltd Company owns 1 Subway store. T he financial forecast is based on the last years financial analysis of Red Chilli and market conditions in which we have made certain prediction looking at the current market condition which are expected to increase and vice versa. Further prediction is based on the changing consumer needs and increasing competition in the domestic market which might result in the offering of more made-to-order menu items using fresh and possibly even organic produce, and far less fried foods, such as grilled, roasted and steamed chicken and seafood items become more common. The main limitation for this model would be that values are based on predictions given in the problem. The sales quantities, growth percentages and other values might change due to external factors and as a result, the predictions made might not be correct or relevant in the future.

Section-2 Introduction

At management and operational level budget and budgetary control system determines the future and establishes the goal which has to be achieved. The main objective of company is to generate money and the chief role of management is to make a plan, control, measure performances and hence make decision in order to meet the objectives. If any deviation occurs in the plan prospective then corrective measures are adopted so that future loss might be avoided. This study analyzes by what means the budget and budgetary control can affect on the subway fact food franchise in UK.

Concepts and Methodologies

Budgetary control has been considered ...