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INTRODUCTION

In context to determine crucial aspects of “Chop- Chomp Ltd”, it is necessary to make proper evaluation of their regular business. As it has been found that this particular company is operating in online meal-kit-style subscription business which is entirely focuses on meat marinades, spices and inventories. The primary objective is to enhance creatively to home cooking between all busy householders. In order to make proper analysis about overall performance of an organisation it is necessary to make proper swot analysis of their overall performance and growth position. According to the market research information, this particular company is developing a positive aligned with this trend (World Health Organization, 2013).

They are started their operations in 2010, whereas their trademark and brand registration are protected as Trademark Act of 1994. They have decided to expand their operation into producing as on monthly Taste box subscription products which is related with various fresh and non-fresh ingredients. There overall business is regulated in capturing wide market, as they are regulating in presently in UK. Apart from this, product is sources from all over the world. Some part from Mexico with total of 30% and in South Africa with 40%. The company negotiated about 60 days’ credit terms with maximum suppliers during the time of expansion in 2013.

SEMINAR 1

Strengths

Weaknesses

The major positive point collected in respect to this company is their dedication toward home cooking services.

Another important part of the company is that they do package their hand selected choice of international goods in branded packaging.

There business is started with producing gift boxes which are hampers their overall product sold to consumers are not available to high street.

Opportunities

Threats

There overall success is increase through their expansion of business. The niche operations of recipe boxes and their subscription have promoted various major players such as TESCO and other companies.

The major issues they are facing are associated with online market which is dominating through store based players such as Hello Fresh and Naked wines.

SEMINAR 2

Review of business opportunity

Under this particular analysis, certain essential aspects related with current position of Chop and Chomp Company is mentioned.  It is necessary to make proper evaluation of all necessary data which are helpful in order to detect their overall cost of financing. This will assist an organisation to manage their overall growth and performance during the time. The company have been offer or supplies spices and marinades to small chain of 13 restaurants from which 8 are located in central London and 5 are situated in North London. According to these particular opportunities they would make impacts on overall financial year of 2018. 

It has been found that company is providing products in huge amount with included value component of subscription business in respect of their presentation and their recipe cards. In accordance to profit margin which would be significantly minimum than their existing subscription business. While it would be continue supplies under a 3 year contract and distribution costs that is very low (Yancy and et. al., 2013). It has been advice by various restaurants to make promotion of their upcoming sales. In present time, total of 80% of their earning is being generated by subscriptions box business with proper balance in next coming time from ad-hoc sales of their overall products which would consists of butches and farm shops and one-off gift boxes.

Calculation of loan repayments: In case of investment appraisal the costs of capital will be taken in to account ass the financing structure and be adjusted for the loan. Henceforth, the initial process can often be helpful for business to get proper financing it require and can afford it. Thus, positive opportunities are that which get the money a company can invest.

Consideration of depreciation plan for their vehicle is not account as part of investment appraisal. As it is said to be non-cash movement and can be more effectively use as decision making process in some business.

(1): Loan Amount if they are taking, it was 11500 per month

Year

Principal (A)

Interest (B)

Total Payment (A + B)

Balance

Loan Paid To Date

2018

₹ 39,846.02

₹ 7,681.81

₹ 47,527.83

₹ 98,153.98

28.87%

2019

₹ 57,222.56

₹ 6,147.88

₹ 63,370.44

₹ 40,931.42

70.34%

2020

₹ 40,931.53

₹ 1,315.43

₹ 42,246.96

₹ 0.00

100.00%

 

(2): Depreciation table on total vehicle

Cost: $32,000.00, Salvage: $0.00

Life: 3 years, Factor: 2

Convention: Mid-Year

First Year: 6 months

Depreciation

Year

Depreciation expenses

2018

10667

2019

14222

2020

4741

2021

790


 

(3): Investment appraisal

Year

Cash inflows

P.v factor @ 8.5%

Present cash inflows

0

-138000

1

-138000

1

114000

0.921659

105069.1244

2

119700

0.8494553

101679.7978

3

125685

0.7829081

98399.80435

   

Present value

305148.7266

   

NPV

167148.7266

Sensitivity Analysis:

            According to the given analysis, it has been seen that bank will asked to take into consideration about total risk that the company cannot able to attain their forecast and overall projects which will be not profitable in coming time (Kimberlin and et. al., 2015). According to the turnover which would be fixed contractually as key variable that are making huge impact on increase in total cost of sales. The company would be able to tried to improve their products in next coming 3 years. It is necessary to determine the overall investment return one can getting from their total investments.

Cost of inflation :

Year

Amount

Inflation Rate

2013

₹ 114,000.00

N.A.

2014

₹ 119,390.10

4.73%

2015

₹ 125,872.54

5.43%

2016

₹ 131,907.52

4.79%

2017

₹ 134,493.95

1.96%

Additional consideration:

According to this particular evaluation, it has been seen that potential for extra products sales by which overall restaurant promotions. This has to be done on an average that each restaurant does covers around 125 on every Thursday and Friday evening. 150 on Saturdays and 65 covers on Sunday, Monday and Wednesday. Advertising through using restaurant of an organisation would increase the overall customers of research. Moreover, it has been based on prior advertising, the company would estimate that one extra regular subscription sales will increase total of every 10000 people (Johnson and et. al., 2015). There are certain assumptions which are needed to be taken into consideration. Some of them are discuss underneath:

  • The assumptions of total income from additional customers to see promotion in next 1 year. While the impact of that particular additional customers are see the promotion in next 2 years as cash-flows in that year.
  • Whereas gross profit margin of new customers is the line with total current gross profit margin of company with 55 %.

SEMINAR 3

Historical financial analysis

 

Trail balance

   

Particular

Debit

Credit

Cash balance at bank

29057

-

Mortgage loan at 7%

1145

-

Shareholder loan at 4%

80

-

Tangible assets

24572

-

Inventory

31800

-

creditors

-

51279

taxation

-

4814

Profit

-

30561

Capital and reserves

-

 

Total

86654

86654

It is known as an effective statements which consists of all debits and credits record of financial transactions that are being done during an accounting period of time. The primary sources of preparing trail balance is taken from journals and ledger posting. This would be helpful in preparing final account of an organisation. A trail balance is said to be bookkeeping worksheet under which the balances of all ledger which are complied as per debit and credit column. It has been seen that these are prepared as periodically which is mainly at the closing of every reporting duration of time. Total balance generated during the time is collected as 86654. These are done by making proper evaluation of all expenditure that are done during the time. The financial account of an organisation is being prepared through using necessary information mentioned in trail balance. The company can use third party delivery to their monthly subscription boxes during the time. It is necessary to make proper distribution which is significant costs to an organisation (August and Shanahan, 2017).

SEMINAR 4

Future profitability and current valuation analysis

Valuation analysis

 

Valuation analysis

 Net Asset Value (also known as net book value)

 
 

2017 (ï¿¡000)

Adjustments

Fair Value

Non-Current Assets

24618

18000

42618

Current Assets

62136

0

62136

Less: Current Liabilities

-25110

-11500

-36610

Less: Long-Term Liabilities

-16364

-4500

-20864

Net Asset Value

128228

 

162228

From the above calculation, it has been found that total net assets valued as per the mentioned book value is being providing positive results with 128228 during in 2017. after making all crucial adjustments total fair value, it has been made a total value of 162228. It has been seen that there is increase in fair value of net assets after valuation of information’s. It is known as total value of an organisation assets deducted the value of all debt obligations. It is often related to open ended or mutual capital investments made by the company during the time. This seems to be more viable ways of reading into total value of overall investment done by an organisation.

Income multiple (Enterprise Value  to EBITDA)

 

2017 (ï¿¡000)

Profit before interest and tax

7925

Plus: deprecation

6651

EBITDA

14576

Plus/minus required adjustments

10667

Maintainable EBITDA

25243

From the above mentioned data, total income multiple as per the enterprise value to overall earning generated during the time. The total maintainable earning incur by the company is about 25243 is being incurred by the company after paying all expenses or deprecation charged by the company. It is said to be amortization is a financial measure which is being calculated through using a company's total net earnings, before paying interest amount, taxes and other important aspects (Beveridge, 2014). This is an essential measure to evaluate performance of a company without having all factors applicable in financing decisions. The variation of operation earning because this does not consider non- operating expenses and other non-current expenses.

 

Discounted Cash flow model (also known Net present value or multi-period income model)

     
 

2017 (ï¿¡000)

 

Maintainable Earnings

   

Market Multiples

1838350.5

113593.5

Less: debt

51279

51279

     

Equity Value

1787071.5

62314.5

           

According to the above equity valuation, it has been seen that a total value collected during the time is about 1787071.5. The primary objectives of equity valuation are to estimate a company’s overall earning during the time. There are certain assumptions related with fundamental value techniques which is that value of securities derived from underlying business operations at the closing of accounting year. This is simply defining as effective method which can be categorised into balance-sheet techniques, discounted cash-flows approaches and other relative methods. This will be an essential to determine the overall intrinsic value of shareholder equity of an organisation.

           

Forecast year on year revenue growth rates

 

Year

EBITDA

Growth rate

 

2018

7925

15.00%

9113.75

2019

9113.75

10.00%

8836.38

2020

8836.375

5.00%

8366.82

It has been seen that, it is estimation of total current year financial performance which is being used to develop near term plans for their capital purchasing of all necessary aspects of an organisation. This is mainly adjusted as per the monthly earnings in response to actual business outcomes generated during the year. The long term forecasting is more risk in terms of revenue growth of an organisation (Drucker, 2011). If the company is forecasting in 7925 earning in 2018 they are getting a total 9113 with 15%. whereas in 2019, it gets slow down with total of 9113 and reduce with 10% during the time and so on.

CONCLUSION

It has been concluded from the above report that, SWOT analysis is effective tool which helps the organisation is to identify about their strengths and weaknesses. It helps to grab the opportunities through effective use of their strengths. Financial statements include income statements, balance sheets etc. It helps in determination about their income and expenses and also about their assets to determine their current position. NPV and IRR are two effective investment appraisal technique which helps the organisation regarding selection of most appropriate and profitable project which provides maximum return. Valuation of company provides the opportunity to build their structure stronger for accomplishment of their desired objectives.

REFERENCES

  • World Health Organization ed., 2013. Global tuberculosis report 2013. World Health Organization.
  • Yancy, C. W. and et. al., 2013. 2013 ACCF/AHA guideline for the management of heart failure: a report of the American College of Cardiology Foundation/American Heart Association Task Force on Practice Guidelines. Journal of the American College of Cardiology. 62(16). pp.e147-e239.
  • Kimberlin, D. W. and et. al., 2015. Red Book, (2015): 2015 Report of the Committee on Infectious Diseases. American academy of pediatrics.
  • Johnson, L. and et. al., 2015. NMC horizon report: 2015 library edition (pp. 1-54). The New Media Consortium.
  • August, D. and Shanahan, T., 2017. Developing literacy in second-language learners: Report of the National Literacy Panel on Language-Minority Children and Youth. Routledge.
  • Drucker, P. F., 2011. Landmarks of tomorrow: A report on the new. Transaction Publishers.
  • Beveridge, W. H., 2014. Full Employment in a Free Society (Works of William H. Beveridge): A Report (Vol. 6). Routledge.