TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc399516285 \h 2Opinion of Value PAGEREF _Toc399516286 \h 3Business Overview PAGEREF _Toc399516287 \h 4History of company PAGEREF _Toc399516288 \h 4Services provided PAGEREF _Toc399516289 \h 4Opening hours PAGEREF _Toc399516290 \h 4Menu offered PAGEREF _Toc399516291 \h 5Education industry analysis and its impact on canteen business PAGEREF _Toc399516292 \h 6General trend of Malaysian Higher Education and the Government’s policy PAGEREF _Toc399516293 \h 6Production process PAGEREF _Toc399516294 \h 7A’ la-carte service PAGEREF _Toc399516295 \h 8Self-service PAGEREF _Toc399516296 \h 9Customer Analysis PAGEREF _Toc399516297 \h 10Suppliers PAGEREF _Toc399516298 \h 12Human resources PAGEREF _Toc399516299 \h 14Description of facilities PAGEREF _Toc399516300 \h 16Layout plan PAGEREF _Toc399516301 \h 16Furniture and Fitting PAGEREF _Toc399516302 \h 18Equipment and Machine PAGEREF _Toc399516303 \h 18Financial Analysis PAGEREF _Toc399516304 \h 19Asset Valuation: Book Value Method PAGEREF _Toc399516305 \h 19Market Based Valuation Method: Going Market Rate Method PAGEREF _Toc399516306 \h 20Income based Business Valuation: Return on Investment (ROI) Method PAGEREF _Toc399516307 \h 21Conclusion for Financial Analysis PAGEREF _Toc399516308 \h 22References: PAGEREF _Toc399516309 \h 23Appendices PAGEREF _Toc399516310 \h 25Assumptions and limiting conditions PAGEREF _Toc399516311 \h 25
Executive SummaryThe purpose of writing this report is to provide business valuation of Bern’s Café at ABC University and weighing in the options whether it is suitable or not to purchase the business of Mr. Bernard. The report will be divided into several sections such as the business overview, analysis of the education industry towards the canteen business, customer analysis and also the financial analysis. The business overview will explain more about history and the services provided by Bern’s Café. The impact of the education industry towards the canteen business will explain more about the external factors that may or may not affect the growth of the canteen. The customer analysis will then explain the total customer in figures and last, but not least, the emphasis is more focused on the financial analysis. This section will take all of the facts mentioned in the previous sections and converts them into logical figures. Several valuation methods are going to be used in this section and all of the advantages and disadvantages of each method will then be weigh in to conclude the suitable selling price of the canteen
Opinion of ValueBased on the review of the information provided, I am of the opinion a reasonable range of value for ABC University’s canteen, as of April 20, 2014 is: RM 310,000.00
After full consideration, in my humble opinion, I conclude that buying Mr. Bernard’s business is a wise decision based upon the several benefits such as the external factor of government support. Statically, the Malaysian Education industry is constantly growing and this means that more students are coming in to ABC University and in return also increases the potential customer coming in to the canteen. Furthermore, upon analyzing the environment of ABC University, it has only one canteen that is Bern’s Café and within the radius of 3 km, there are no competitors available. Business wise, this is a major advantage. The staffs are also willing to work under the new owner if the purchasing agreement is finalized and this will certainly eliminates the need to look and hire new staff members. The staff turnover rate has been low, with 80% of them has been working here for more than 5 years. When it comes to machines and equipments, most of them are still in working condition and have been regularly serviced under the care of Mr. Bernard. I would recommend to my superior to purchase the business now as the market is favorable and profitable. My opinion of value is subject to the assumptions and limiting...
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