EXCEL ASSIGNMENT
A friend of yours wants to open a concession stand that sells hotdogs, chips and drinks at sporting events 1 Maxwell’s Seafood Diner Please read the instructions carefully and provide what is being requested. A new client of yours, Jacob Maxwell, wants to open a small diner selling calamari, oysters, fried shrimp, catfish sandwiches, salads, French fries, and sodas. He is planning to open the diner on the March 1, 2019. You, as an independent consultant, have been hired to develop a cash pro forma budget for his business venture (note: this is a spreadsheet that helps forecast income and expenses over a period of time). It can be used to plan for and manage the business if done correctly. Assignment: Using Microsoft Excel, construct a monthly proforma cash budget for your client for the first year of operations. Use the file attached Excel Template - “Excel Assignment Diner Template” as your starting point. This is the file that must be downloaded and used as the basis for your assignment. Do not make any changes to this pre-designed template. This means changing the format. You will need to add your information and any other information needed for the assignment. Do not use a template from a previous semester – this is considered academic dishonesty and will be subject to disciplinary action. Place the finished cash pro forma on a worksheet labeled “Cash ProForma". Place all your case assumptions data on a separate worksheet. Label the worksheet "Assumptions" (note: each piece of data must appear in its own cell on the Assumption sheet). Place your start-up costs on a third worksheet labeled "Startup Costs" Create two additional worksheets for your recommendations. Label one worksheet “Beer Recommendation”, label the other “Entertainment Recommendation”. Appropriate Charts (graphs): You will be creating two separate charts so create and label two additional worksheets for the charts (each chart will be in its own worksheet). Chart One –”Monthly Product Revenue” – this will show the monthly revenue for each of your five products for the entire year. 2 Chart Two – “Total Product Net Income” - You want to track the total product net income for the year to determine any trends or projections in product sales. Make sure both charts are formatted correctly (i.e. appropriate title, legend where appropriate, data series properly labeled) and they are appropriate for business use. Information needed to complete assignment: Calamari, Oysters, Fried shrimp, Catfish sandwiches, Salads, French fries, and sodas. Product Selling Prices: Oysters on half shell will sell for $8.25 each (dozen) Fried Shrimp will sell for $10.25 (dozen) Calamari will sell for $4.95 an order Catfish Sandwich will sell for $5.95 Salads will sell for $4.50 each Fries sell for $1.25 per order Sodas sell for $1.25 a bottle Cost of Goods Sold: The Catfish sandwich ingredients (fried catfish, cheese, sauce, bun etc.) cost $3.15 per sandwich. Calamari cost per order $1.90. The fresh Shrimp cost $7.19 per order from the supplier. Oysters (sauce, lemon, oysters) cost $5.19 per order. Salad ingredients (lettuce, tomatoes, cheese, etc.) cost $1.23 per salad serving Frozen fries and oil average to $.67 per order Sodas cost about $.7 per 16 oz. bottle The building rent is $2775 per month. Phone will cost about $220 per month. Electricity should cost about $775 a month. Insurance will be $850 a month. Advertising and promotion will be $900 a month. Operating Hours: The diner will be open seven days a week. The diner will serve lunch and dinner and will be open from 11am – 7pm on weekdays (Monday – Friday). It will need two hourly employees and an assistant manager (or manager) during these hours that the diner is open. On Saturdays and Sundays the store will be open 11am – 11pm and will need three hourly employees and an assistant manager (or manger). Your client will be the manager and draw a salary of $48,500 per year (includes benefits). He will also work in the store during the busiest times, and fill in for the assistant manager on days off and sick days. The assistant manager will receive a 3 salary of $37,500 per year (includes benefits). The hourly workers will be paid $7.25 an hour. Monday through Fridays the owner expects an average of 17 customers an hour. Saturdays and Sundays the owner expects an average of 45 customers an hour. Demand Rate: On average, 1/4 of all customer will buy shrimp, 1/4 of the customers will buy oysters, 1/4 will buy Calamari, and 1/2 customers will buy Catfish, 3/4 of them will buy a salad, all of them buy french fries, and every customer will purchase a soda. Start-up costs for the diner includes: Kitchen equipment: $16,250 Cash register and sales equipment: $1,250 Initial inventory: $5,500 Pre-opening marketing: $3,500 Diner fixtures (chairs, tables etc.): $4,500 Oil painting of your client’s momma to hang on the wall: $350 Licenses: $1,025 Security deposit: $6,500 First Insurance Payment: $850 Your client has $10,000 and plans to borrow the rest from the bank with a five-year loan at 5.1% interest. You are to calculate the monthly loan payment using the appropriate financial function. Assume a tax rate of 24% if Income Before Taxes (IBT) is equal to or is greater than $23,500. Assume a tax rate of 15% if IBT is less than $23,500. You are to calculate the monthly tax payment using the appropriate logical function. Assume that sales will grow at an average of 2.55% per month. Assume that each month contains 4.2 weeks. Scenario One: “What if” Analysis Your client is unsure if he should sell beer at the diner. He thinks he can sell a beer to every other customer and it seems to be lucrative because the beer sells for $4.75 each and costs him only $1.10 to purchase. Unfortunately your client is afraid that he would cannibalize his soft drink sales with the beer customers (one soft drink less for every beer sold). It will cost him $5,250 to purchase the beer license from the county and his monthly insurance costs would rise by another $375 per month. What is your recommendation: Should your client offer beer to his customers? 4 Scenario Two: “What if” Analysis A former school friend of your client is an amateur Comedian and has planted the idea in your client’s head of adding a Comedy act to provide live entertainment on the weekends (Saturday and Sunday). The friend states he can guarantee 7 more customers per hour if your client will hire him at $1,950 a month. What is your recommendation: Would it be a profitable idea to hire the trio? Recommendations: Show your client how these recommendations would affect the bottom line by recreating the pro forma for each scenario, and applying the data analysis to determine profitability. You do not have to start from scratch, but note, these are completely independent proformas. They must update accordingly from the data worksheets. Plan on showing your analysis and discussing the proforma changes that occur under each new scenario and how it affects profitability. Use a formatted text box (not a comment) to explain your recommendations under each new pro forma. This will be approximately a 2-3 paragraph endeavor. Pizzeria Grading criteria (2) Criteria: Your current score: Sheets are appropriately labeled5 points All information cells on cash proforma are referenced back to the assumption page, calculations are correct, all fields have values, twelve months are presented and an annual totals are given as well as a monthly totals.35 points Assumptions and startup worksheets setup and complete.15 points Recommendations are based on cash proforma information and what if analysis Use separate worksheet for each recommendation.15 points The chart is present and reflects worksheet content.10 points Taxes are calculated correctly using boolean logic.10 points Loan payment is calculated using a function..10 points Score (out of 100)0 Sheet 1 Maxwell's Seafood Diner Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12Total Revenue: Oysters Fried Shrimp Calamari Catfish Sandwich Salads Fries Sodas Monthly Revenue Expenses: COGS Rent Phone Electricity Insurance Advertising Hourly Wages Salaries Loan Payment Total Expenses Income Before Tax Tax Net Income Cash Flow Sheet 2 Assumptions Made: Products: Oysters selling price Fried Shrimp selling price Catfish Sandwich selling price Calamari selling price Salad selling price Fries selling price Sodas selling price Oysters COGS Fried Shrimp COGS Catfish Sandwich COGS Calamari COGS Salad COGS Fries COGS Soda COGS Fixed Costs: Rent Phone Electricity Insurance Advertising Operating Information: # of days open (weekdays) # of days open (weekends) Hours open (weekdays) Hours open (weekends) Hourly wage Customers per hour weekdays Customers per hour weekends Hourly employees/day (weekdays) Hourly employees/day (weekends) % of customers purchasing Oysters % of customers purchasing Fried Shrimp % of customers purchasing Catfish Sandwich % of customers purchasing Calamari % of customers purchasing salads % of customers purchasing fries % of customers purchasing sodas Manager Annual Salary Assistant Manager Annual Salary Growth rate Weeks Per Month Loan period (years) Loan interest rate Taxes: If income before tax is equal or greater than:Tax rate = If income before tax is less than:Tax rate = Coded Document Sheet 3 Start Up Costs: Kitchen equipment Sales equipment (cash register, etc.) Initial inventory Pre-opening marketing Diner fixtures (chairs, tables etc.) Oil painting Licenses Security deposit Initial insurance payment Total Owner's Equity Cash Reserves Elke Leeds: Cash Reserves represent an amount in excess of what is needed to open your business. This reserve fund is borrowed and kept to protect your business against negative cash flow or losses. It replaces what would normally be considered an available line of credit. Loan Amount