EEE451 Case 4 Questions

September 11, 2012

Case 4 THAIFOON RESTAURANT

* Prepare a spreadsheet for the restaurateur to project his net profits.

From exhibit 3, Thaifoon restaurant forecast that there would be 18 turns (5 lunch turns and 13 dinner turns) each week. And the owner planed to have 30 or fewer seats in order to meet the legal regulations and design. So it means there are 30 seats for each turn. Daily Turnover Ratio | | Lunch | Dinner | Revenue | $12.00 | $25.00 | Monday | 1 | 1.5 | Tuesday | 1 | 1.5 | Wednesday | 1 | 1.5 | Thursday | 1 | 1.5 | Friday | 1 | 2.5 | Saturday | 0 | 2.5 | Sunday | 0 | 2 | Number of Seats | 30 | |

Moreover, the restaurant would open 52 weeks annually. Lunch bill would amount to $12 while dinner would amount to $25 per person. Therefore, for the seats of 30, the restaurant would have revenue of $360 ($12*30) for lunch per turn; and $750 ($25*30) for dinner per turn. Thus, the annual revenue would be $600,600 ($360*5*52+$750*13*52). Total Sales | | | | | | Day | Lunch | Dinner | Total Profit | Total Sales | Monday | $18,720.00 | $58,500.00 | $77,220.00 | | Tuesday | $18,720.00 | $58,500.00 | $77,220.00 | | Wednesday | $18,720.00 | $58,500.00 | $77,220.00 | | Thursday | $18,720.00 | $58,500.00 | $77,220.00 | | Friday | $18,720.00 | $97,500.00 | $116,220.00 | | Saturday | $0.00 | $97,500.00 | $97,500.00 | | Sunday | $0.00 | $78,000.00 | $78,000.00 | $600,600.00 |

For the fixed cost, from exhibit 4, I subtract amortization from the total projected annual cost, and add one month deposit paid to the landlord, which is 87,789-19,414= $68,375. Then variable cost based on the sales, which in total equals $397,371. So gross profit would be revenue- total cost (fixed cost+ variable cost)= $134,854. Then subtract amortization from gross profit, EBIT= $115,440.

Since the restaurant is owned by Mr. Phimphrachanh alone, so I