Академический Документы
Профессиональный Документы
Культура Документы
Submitted to:
Submitted by:
Kamran Nasir (BC15-248)
Section C
Semester 7th
Acknowledgement
Person is not a perfect in all the contexts of his life; He has
a limited mind and mind thinking approaches. It is the guidance
from Almighty Allah That shows the man light in the darkness and
the person find his way in the light. Without this helping light,
person is nothing but a helpless creation. The teaching of the
Holy Prophet Muhammad (PBUH) were also the continuous
source of guidance for me especially his order of getting
knowledge and fulfilling once duty honestly was key motivation
force for me. With prayers of my parents and support of my
teachers it became possible to formulate this report. I pay high
regards to them. I am also thankful to all my friends and Class fellows
who helped me and provided me support to complete this hard
task. I like to thank Mr. Faisal Sagheer Syed (Accounts & Finance
Manager) and all the staff members at Options International as they
helped me remarkably for this report.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 2
Letter of Transmittal
Kamran Nasir
Roll No. BC15-248
OPTIONS INTERNATIONAL (SMC-PVT) LTD 3
Acknowledgement 1
Letter of Transmittal 2
Executive Summary 4
Introduction 5
History 8
Vision and Mission 14
Owner Profile 15
Organization Structure 16
Objectives 18
Marketing Mix 20
Competitors 23
SWOT Analysis 28
Recommendation/ Suggestions 30
Conclusion 30
Skill Acquired 31
Work Done By Me 35
Appendix 65
Letter of Authorization 65
Conclusion 43
Financial Statements 44
Bibliography 72
OPTIONS INTERNATIONAL (SMC-PVT) LTD 4
1. Executive Summary
Options Restaurant and Coffee Shop are eat-in, carry-out, specializing in evening and
weekend leisure dining. Lahore is recognized as one of the prime Restaurant markets in
the country.
Options Restaurant is a 150 seat fine-dining restaurant with a 120 seat lounge. Options
Coffee Shop is a 60 seat fine-dining Coffee shop with a 20 seat lounge they focus on new
Pakistani and Chinese menu with a touch of European influence. Options Restaurant
located in the booming, and rapidly expanding city Lahore.' The outlook for the future of
Long Branch is promising. The area is in need of a warm and friendly place with excellent
food. A place where you always know you will get the best of everything. Options
Restaurant is featuring a cozy dining room and an elegant lounge. Comfortable
furnishings and decor with soothing warm tones. The lounge has comfy couches and
antique love seats with a softly lit bar. It is the perfect place to stop in for a bite to eat, for
a drink or for a small business meeting. The menu inspired from different countries'
specialties and appeal to a diverse clientele. You can get Turkish, Lebanese, Chinese,
Iranian, Pakistani and Fast Food/Pizza, or you can go a little bit more International and
choose a red curry chicken with basmati rice, or an Asian grilled shrimp with spinach, tofu
and black bean sauce. It also have a special pasta dish entree every day plus the 'all
Pakistani and American meal' such as barbecue beef ribs and baked beans. Adding value
is an interesting business lunch menu with specialties every day. The menu is change
every 3-4 months but keep the favorites. Prices are competitive with other upscale
restaurants in the area. However, it is the strategy of Options Restaurant to give a
perception of higher value than its competitors, through its food, service and
entertainment. It offers special theme nights to attract new customers to Options
Restaurant. The restaurant is fine dining in a cozy atmosphere. Warm colors, fresh
flowers, soft music, candles and amazing artwork from some of the area’s most notable
new artists. This is their work for a diverse clientele. During the busy summer months you
can also have a special summer menu, featuring lighter fare, exotic drinks, as well as
non-alcoholic offerings. The service is relaxed, very friendly and correct. It hires the best
people available, training, and motivating and encourage them, and thereby retaining the
friendliest most efficient staff possible. Its management team is comprised of individuals
whose backgrounds consist of 10 years’ experience in food, restaurant and hotel,
catering, management, finance, marketing, art and motion pictures. Catering is a major
part of the business. "Leave it to Options Signature Catering" already has an established
clientele and they are growing each and every day. It feel in today's hectic work schedule
customers don't always have time to set up that birthday party or other event that we all
need and want. Now customers can leave it to pros and get the finest, most memorable
party or dinner ever. Options have years of experience in the catering business and know
what an important client wants and needs.Net profit for the year June, 2018 ended is
₨ 90,881,222.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 5
2. Introduction
With a past measurements of food sector, we believe that Pakistani food is gaining
popularity with energy passing time. But as with the best Pakistani dishes we put to
gather popular dishes like Italian, Turkish, Chinese, Iranian, Lebanese & fast food
along with coffee & bakery items. So under single plat form comes covers all the
spices & taste of dishes called Options An-Exotic Restaurant.
Yee Haw – Its Options Restaurant. Leave the stress where it belongs and get ready for
the exceptional experience. It’s time to have a fun dining experience at Options. At
Options, you will enter through a space door overwhelmed with waterfalls and stars
above, great smiling faces to greet you, service call buttons at tables, Wi-Fi to remain
connected to the world, Disney characters to play with the children, a photographer to
take pictures to capture your memories, live kitchen to enjoy your food being cooked in
most hygienic conditions, trendy Juice Bar with large selection of special drinks and fresh
juices, Full range of Pakistani Cuisine along with Lebanese, Iranian, Turkish, Chinese
and fast food specialties.
You can also watch video presentation of dish of your choice by scanning QR code printed
in the menu next to the dish. While enjoying your favorite food, you can relax your mind
by looking at hundreds of exotic fish swimming inside the Largest Aquarium or you can
close your eyes and listen to grand concert piano being played with soothing tones.
you can listen to melodious live music being played by renowned singers or you can
watch sports at 13 feet theatre screen plugged in with 10 large size LCD’s – and when
you are done with your delicious food – the fun can be more sweetened by adding
heavenly tasted desserts from Options Dessert Bar. This is called – An Options
Experience – which is in reality an Exceptional Experience for a long time to remember.
1.1.1 SPECIALITIES:
1. PAKISTANI CUISINE
Pakistani Food is a combination of home grown rich traditional spices, fresh vegetables,
fragrant long grain rice, seasonal fruits and a refined blend of various regional cooking
traditions of Pakistan. Pakistani food is gaining popularity in all the corners of the world
OPTIONS INTERNATIONAL (SMC-PVT) LTD 7
because of its richness and unique flavors. Our famous celebrity chef and his expert team
prepare the most delicious food for the souls.
2. LEBANESE CUISINE
Lebanese Food has a wide range of menu and is in demand all over the world especially
among those who enjoy perfectly cooked meat with less spices. Options has picked the
best dishes out of most popular Lebanese menu for their guests to suit their taste buds.
3. IRANIAN CUISINE
Iranian cuisine combines savory dishes with sweet flavors like pomegranate, barberry
and cinnamon. There is ample use of fresh herbs and subtle spices like saffron. The goal
is not to knock your taste buds over with one prominent taste, but to serve up layers of
flavors to keep you guessing as to what may come next. Options Restaurant chef has
picked carefully the few specialties hoping that our guests would fall in love with his
selection.
4. TURKISH CUISINE
Food lovers are falling in love with Turkish food and the eateries offering Turkish food in
Pakistan are being filled up more and more. Options kitchen team work hard every day
to keep the taste as close to authentic as possible for the Turkish specialties being offered
in Options exotic menu with pride.
5. CHINESE CUISINE
Chinese cuisines are most popular in the country after Pakistani. Chinese eateries can
be found everywhere and it might be because of the brotherly relations with China.
Options has included most popular options of Chinese cuisine to its menu to provide
choice to valuable guests.
Options Restaurant gives you a wide selection of fast food, Burgers, Sandwiches and
Pizzas with a unique Exotic taste, Spices & Flavor’s which will kick away your hunger.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 8
Come enjoy the vast menu of burgers & Sandwiches and enjoy the taste in perfect
Ambiance at Option
7. SERVICES INTRODUCTION
“The action of helping someone working for someone, system supplying a public need &
ready to assist someone when required”
THE OPTIONS RESTAURANT is perfectly suitable with this meaning because it helps
public by providing its facilities, by gibing its facilities, by satisfying public needs and also
ready to assist them whenever required.
SERVICES
A service is the most important part and major key for the success of any unit. Without a
service, marketing cannot be imagined. Service is one tool in the hands of the marketing
through which it gives life to all marketing program. So, the main responsibility of the
marketing would be to know its service well and to take proper service decision.
HOTEL SERVICE
RESAURANT FACILITIES – Provide Nourish food, fast food, and continental food.
HALL – Banquet/conference to accommodate 150 persons.
REGENT ROOM -Party Room for 120 persons.
OPEN SPACE – If customers demand open arena for the party, Reception,
TERRACE is provided them with all arrangement.
BIRTHDAY PARTY:
If some one wants celebrate Birthday in THE OPTIONS RESTAURANT, they are
providing hall for party and arrange the event. They provided music to the party, and also
arrange for cold-drink and food to the members of party so; person can get both
entertainment and food.
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MARRIGE PARTY:
Someone wants to arrange a marriage party. They handle the event; they provide food &
other services and also provide music and other facilities.
DANCE PARTY:
If the festival of “Christmas” and “new year” they provide all the types of entertainment to
the all customers. Service like music, dance floor other many types of services to
celebrate festival.
Options Coffee & More which we call “The Social Lounge” where friends gather to enjoy
conversation, retreat from the chaos of everyday life, take a moment to relax and enjoy
our world class freshly brewed Italian coffee. To complement our unique hot and cold
beverages, we offer a wide selection of snack ideas including pastries, cold & hot
sandwiches, innovative burgers, exclusive pizzas, scrumptious steaks, special sundaes
and homemade options ice-cream. Options Coffee & More is an ideal venue for dining,
casual meetings, business talks and have fun. To keep you entertained at Options, we
have largest LED screen, chess / Ludo tables, news corner, 3D gaming zone, separate
family and party lounges where you just need to grab a cup of coffee or snack and enjoy
all at Options- Coffee & more in a perfect ambiance. We take coffee serious while having
fun and never stop experimenting.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 10
For the first time ever in Pakistan, Options – Coffee & more is serving you freshly
brewed Italian Coffee. Once you enter Options – Coffee & more, aroma of our coffee
beans brewing will freshen you up. You can choose from a number of light, medium
and strong coffee’s, hot or cold, or enjoy best frappes. You will not be able to stop
yourself from saying that this the better coffee than the coffee which I had in London,
Dubai or New York.
Options, being the trend setter once again introduced popular flavors of Options
homemade ice cream. . There are a number of toppings and shakes to choose from
which you can make your ice cream more creative and delicious.
Options- Coffee & More gives their customers a wide choice of Options cold coffees,
frappes, special drinks, Smoothies, shakes and seasonal fresh juices which will clench
your thirst and refresh your mind. Options- Coffee & More gives you a variety of
different flavors and choices in their drinks selection menu.
5. SNACK IDEAS
Options – Coffee & More gives you a wide selection of creative snack/food ideas
including Burgers, cold/hot Sandwiches, pizzas, soups, steaks with Exotic taste,
Spices, & Flavor’s which will kick away you hunger whether its day or late night.
Options coffee and more is also a place for the families to come and connect with
each other and relish the moments together by enjoying traditional Ludo and chess
OPTIONS INTERNATIONAL (SMC-PVT) LTD 11
games provided on tables. This is the best amalgam to enjoy coffee/snacks with loved
ones.
7. 3D GAMING ZONE
Options knowing trend of the kids going digital has created state of the art 3D digital
gaming room which has now become the talk of town especially amongst children and
youngsters. Kids love this digital adventure and keep themselves busy while their
elders enjoy their meals or conversations.
8. NEWS CORNER
Options Bakers & delight is the only place where cakes and pastries of your choice are
baked live in front of you. Options Bakers & Delights offer a versatile selection of Cakes.
Designer cakes, Elegant Royal Cakes, Royal Signature Cakes, Picture Cakes, Dry
Cakes, Mousse Cakes, wedding cakes, corporate cakes, cup cakes, cookies, an array of
different Pastries and tarts and other Exotic Bakery items. From Innovative 3D Cup Cakes
to the perfect Wedding Cakes, Options Bakers itself is a dream come true for anyone with
a sweet tooth or simply a thing for ART. The art of giving never stops here. Options Bakers
& Delights is also a place to buy branded chocolates and customized gift baskets for all
occasions. Our designer cakes also commemorate the joys, accomplishments,
momentous occasions and wonders of life. Our clients from around the globe become
OPTIONS INTERNATIONAL (SMC-PVT) LTD 12
part of our family, calling us time after time to create beautiful and delicious cakes for all
of their special occasions and we, at times, deliver them to their loved ones on their behalf.
Royal Signature Cakes are most popular cakes of Options Bakers. They come in
chocolate, cream, flavor of choice and in dry form.
3. DESIGNER CAKES
4. CORPORATE CAKES
Corporate Cakes are new addition in the ever-growing selection of Options Bakers
& Delights. Corporations now a day expressing thank you to their clients and
appreciating best performance employees with company with the cakes carrying
logo and desired messages. This is the best way to win the heart of valuable
customers and employees.
5. WEDDING CAKES
Wedding cakes are now a part of tradition. It seems wedding celebrations are not
complete till the wedding cake is cut by groom and bride. Options Bakers feel pride
to be the only confectionery in Pakistan who was able to make 500 pounds cake
for a high profile wedding in Lahore.
6. CUP CAKES
Cup Cakes are known as fun in the cup. Best Chefs at Options Bakers are capable
of making flavored cupcakes, name initial cupcakes, designer cupcakes and 3 D
cupcakes. Highly Recommended Fun Sweet.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 13
7. PASTRIES / COOKIES
Options Bakers and Delights offers freshly baked pastries and cookies in most
liked flavors and always ready to bake anything and everything on demand.
8. BRANDED CHOCOLATES
Chocolate Love is the strongest love which exist today. Options Bakers and
Delights make its own premium chocolate products which can also be customized
at times. Similarly, Options Bakers offers chocolates of all popular brands.
9. LIVE BAKING!
Options introduced the concept of Live Baking visible through a glass for the
customers so that they can enjoy viewing their Cakes being baked in front of them.
It’s amusing as well as satisfactory form customers.
Branches
4. VISSION
“As the leader in the food service industry, we will strive to provide the
highest level of consistency in the quality and delivery of our products,
services and knowledge”
5. MISSION
“We will maintain our established reputation within our province and
community for a high standard of:
D r. Ka i s e r R a f i q u e
(CEO)
6. ORGANIZATION STRUCTURE
Organization structure is a basic frame work of business manage
ment. It is the pattern in which various parts of the company are interconnected.
Partners
Head of Department
Supervisors
Workers
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LOCATION
Location of the service sector requires all that facilities which are needed to run them.
When the new service sector is to be established, one major decision has to be taken.
That is the location of that. There are many factors which affecting the location of the
service sector i.e. availability of Raw material, Financial factor, Govt. policy, availability
of water, electricity etc.
Generally, the location of the sector should be very easiest in which the sector can get
necessary things very easily. The Options Restaurant is situated at 8 Aibok Block new
Garden Town Lahore. This sector situated hears for some reasons are as follows.
SIZE OF ORGANIZATION
According to Pakistani company act, there three main types of industry:
SMALL SCALE
MEDIUM SCALE
LARGE SCALE
FORM OF ORGANIZATION
The main business form of organization is follows:
OBJECTIVES OF BUSINESS
Generally, the main object of a business to get more and more profit. All the business
activities are running with the main object of profit but “profit is not only the object of any
business.” There are many objects such as to contribution in the development of the
country, Social responsibility etc.
7. QUALITY CONTROL
The quality control department inspects the basic raw material, which is produced or
extract from the earth, for quality assurance test. This process is necessary in order to
get sufficient and effective management for produce the food.
The Options Restaurant is maintaining quality by experience and expert person. They
never compromise to its quality and services. They always try to its level best.
8. STORAGE
THE Options Restaurant is having storage department in which they are store different
raw material some of them have long period like 15 day to changes, some of them have
very short period i.e. daily.
The store keeper examine store after every 15 days this stoke is oil, sugar, tea, coffee.
And other stock examines store daily bases i.e. fresh vegetable, milk.
After examine by storekeeper, he make a list of things that will be needed and give to
purchase manager, purchase manager take form cashier and purchase thing listed in
list. The store keeper has to visit storage department and check the stock otherwise it is
OPTIONS INTERNATIONAL (SMC-PVT) LTD 20
create difficulty for cooks. And mismanagement is place. But the Options Restaurant
has proper management of food & beverage department.
9. MARKETING MIX
“Marketing mix is the set of marketing tools that the firm uses to pursue its marketing
objective in the target market”
- Philip Kotler
The basis of marketing operation is the co-ordination of four key variables namely,
Product
Promotion
Price
Place
Product mix is the list of all product offered for sale by a company. It is defined as “The
composite of product offered for sale by a firm or a business unit.”
(1) Depth
(2) Width
Depth depends on the number of products items with in each product line.
Width depends on the number of products group of products line with in the company.
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The Options Restaurant has product width in food dishes. I.e. Pakistani, Iranian,
Turkish, Chinese, & continental items.
The Options Restaurant has product depth in Hall i.e. Dance and Party Hall, Marriage
The marketing mix activates or product planning and distribution are performed mainly
with in business or between a business and the member of its distribution channels.
However, though its promotional activities, a firm communicates directly with potential
customers and as well we see, it is not a simple process.
“Promotion consists of those activities that are designed to bring a company goods and
services to the favorable attention of customer”
• Advertising
• Sales Promotion
The Options Restaurant makes a promotion activity. So they can increase the volume of
sales and earning maximum profit.
The prices of the product are depend upon the expenses which is made for making
product. The expenses such as the cost of raw material, cost of over heads, sector
overheads, administrative overheads, margin of profit etc.
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While deciding the price of product, following factors are consider as cost:
9. ADVERTISEMENT
In this modern time, advertising is very important for increasing the sales of the product
of the company or industry. Advertising is the best tool for increasing sales. Big
company spent lots of Rupees for good Advertising.
It is a modern business word and in modern business world no business can survive
without advertisement. So advertisement is must.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 23
10. COMPETITORS
Today, competition increases very fast in any business. Competition is very important
for the development of the economy and country.
The restaurant has to find new and new food product to continue in the market. There
are lots of competitors in the market for restaurant.
Therefore, Options Restaurant tries their level best to face the all competitors.
Marketing research is a systemizing gathering recording and analyzing the date about
the marketing problem to facilitate decision making.
The Options Restaurant is high quality Restaurant. The Restaurant offers consistently
high standard of food facility. Therefore The Options Restaurant is famous in the Lahore
especially for Desi Food, Coffee Shop and Bakery.
An every institutions or organization trains their worker after selection of the person.
Training is a technique by which a management also gets information that, this
employee is right for the job or not. THE OPTIONS RESTAURANT is giving training to
new employees by senior. They are planning for giving training to employee in other
branch.
Training includes “ASK” means Attitudes, skills and Knowledge. Promotion involves
movement of a person to a vertical position carrying higher status more pay, increased
responsibility, increased benefit, better prestige, higher authority, better working
condition facilities and higher rank.
Ones the employees have been selected trained and motivated; he is then appraised
for his performance. Performance appraisal is the step where the management finds out
how effective it has been at hiring and placing employee. A performance appraisal
consists of evaluating an employee’s performance of a job in terms of a job in terms of
its recruitment.
“THE OPTIONS RESTAURANT considers its employees as its most valuable and
therefore it believes in perfect and accurate performance appraisal system. They
believe that employees’ efficiency, productivity and great performance is a ladder to
success. THE OPTIONS RESTAURANT has an efficient performance appraisal system
for evaluating their employees’ performance.
THE OPTIONS RESTAURANT has record book of employees. These record books are
as follow.
Salary-wages register
Casual leave register
Attendance register
Bonus register
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Salary refers to the monthly or weekly rates paid to the clerical, administrative and
professional employees.
Wages and salary is one of the important functions for organization as well as staff
working in it. It is motive the person to effective, so it is most important work.
Clothes
Living facility
Food facility
Medical facility
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Overtime
Festival gift
THE OPTIONS RESTAURANT has a two shift of duties. They can enjoy the festival
holidays.
18. ACHIEVEMENT
The people of Punjab are famous for celebrating festivals and eating outside. One
survey states, Lahorians spend more money on eating outside the home than any other
city of Punjab. In Lahore, Most of the families go to the restaurant or hotel once a week.
Options Restaurant is famous for Desi food especially for Mutton Karahi, Chicken
Stakes etc.
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STRENGTH
WEAKNESS
OPPORTUNITY
THREATS
19.1. STRENGTH
It is one thing to discern attractive opportunities and another to have the competencies
to succeed in these opportunities. Each business needs to evaluate its internal strength
and weaknesses periodically.
19.2. WEAKNESS
The business does not have to correct all the its weaknesses or should it gloat about all
its strengths.
Scarcity of Water
Inconvenient Parking space
Certain Dishes are prepared occasionally
Less advertisement
19.3. OPPORTUNITY
It is an area of buyer’s need in which sector can perform profitability. The sector’s
success probability depends on whether its business strengths not only match the key
success requirements for operating in the target market but also exceed those of its
competitors.
19.4. THREATS
1. Monal Restaurant
2. Pind Restaurant
3. Laal Kila
4. Gloria Jeans
5. Burger King
6. Dera Restaurant
7. Yasir Broast
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SUGGESTIONS
After visiting the sector, I think that Restaurant is well and efficient there is nothing as
such which I can suggest to the sector. But, I also want to tell something to the
Restaurant that I think is necessary to attract more and more customers.
The restaurant is strongly recommended to introduce dishes that are not still
served.
The major problem faced by customers is parking so Restaurant must make
some arrangement for parking.
The Restaurant should promote cooking competitions and also accept the
cooking recipe from the people outside.
So, this is one the views from my point of view, which I hope may be taken positively
and will not be misunderstood.
CONCLUSION
I think that I had got a golden opportunity to visit. OPTIONS RESTAURANT. I got a
whole information regarding personnel, financial and marketing. During my study, I
marked that the Restaurant is best in management, in working in providing facilities to
the workers and provide food facility to the people.
I have come to the conclusion that this sector has an efficient in financial and marketing
process. It possesses proper finance. Hence, this sector has a many scope for
expansion and development. The food of this sector is very good in taste. The Name is
‘Options Restaurant’, Customers would like to visit often to this Restaurant. The staff is
interested to improve the food product as per changing and taste of the customers.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 31
Skilled Acquired
Time management
Team work
Communication Skills
Knowledge of Professional Skills
Pressure handling
Computer Skills
Store Management
Expense Management
Inventory Management
Finance management
OPTIONS INTERNATIONAL (SMC-PVT) LTD 32
In financial planning, they do not think investment in other place but expand their
business. Planning is very necessary for the smooth
The Options Restaurant will invest their finance for their new project establish new
restaurant.
Purchase
Work in
Cash
Progress
Finished
Sales
Product
Every business unit’s financial is in this way. Options Restaurant invests his money into
purchase basic things to prepare food. After completion of the foods, it is to be served to
the customers. Thus, working money rotated into cash and profit is earned.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 33
THE OPTIONS RESTAURANT has both internal sources and external sources of
finance.
There must be proper and appropriate provision for depreciation of on fixed assets. The
financial manager is responsible for maintaining proper management of fixed assets.
Financial manager has to take proper decision for the investment in fixed assets.
The total fixed assets of “THE OPTIONS RESTAURANT” is Rs. 14,899,783 /- only.
25. ACCOUNT
To know how much money earn during the year, how much sales and expanses occur
during the year, what steps to be taken to remedy the financial problems, it is necessary
to record all financial transactions systematically and properly. Every organization keeps
records and evaluates the financial position of the unit. OPTIONS RESTAURANT keeps
records and prepare financial statement at the end of financial year.
For preparing account, they follow the double entry mercantile system. This is the
modern method of preparing account. The account is prepared in computer. Mr.
Muhammad Akram is the auditor.
The OPTIONS RESTAURANT maintains its account by double entry system and
accounting is computerized. This is managed by the auditor.
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7- Insurance
8- Costing
Sections in which I have been working are given below with brief description.
“Inventory Section”
I worked in inventory section where I came to know that how to record inventory using
the system.
In this section all the raw material purchased for the purpose of production is recorded
and entries are posted in the system.
Procedure
The documents involved in the purchase process and their description is given below.
When purchased material arrives in the factory, a gate pass is made at the gate and
GRN is prepared in the store against that gate pass. GRN includes the following
elements:
Voucher Number
Date
Document Type
Invoice Number
Invoice date
Supplier ID:
GRN Number
GRN Date
P.O.N (Purchase order #)
Quantity
Amount
Voucher Number
Date
Document Type
Invoice Number
Invoice date
Supplier ID:
Expense ID
Expense Title
C.P.N (Capital proposal #)
Amount
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I moved to accounts payable (AP) section which was helpful for me in learning the
recording liabilities and taxes payable by the company practically using system.
When purchases are made, data is transferred to Accounts Payable section where
payments are made through cheques. Tax is also deducted at the time of payment. It
may be withholding tax or sales tax. Later it is submitted to FBR.
EXPENSES DETAIL
1-ADMIN EXPENSES:
2-SELLING EXPENSES:
Advertisement Expense
Insurance
Freight and forwarding
Warranty period services
Contract and tendering
Postage and telegram
OPTIONS INTERNATIONAL (SMC-PVT) LTD 38
3-MANUFACTURING EXPENSES:
4-OTHER EXPENSES:
Helped me in learning how to record and dispose of assets and also calculating
depreciation on the company’s assets
“Assets section”
In this section Assets are calculated, recorded and disposed of with great care and
precision.
Operating fixed assets are measured at cost less accumulated depreciation and
accumulated impairment losses with the exception of freehold land, leasehold land,
buildings and plants and machinery.
Freehold land, lease hold land, buildings and plants and machinery are measured at
revalued amounts less accumulated depreciation and accumulated impairment losses, if
any. Leasehold land is measured at historical cost.
Procedure
When any proposal is approved by respective authorities for the purchase of any asset,
that order is passed to buying department. Buying dept. issues a Purchase order (PO)
OPTIONS INTERNATIONAL (SMC-PVT) LTD 39
to the supplier which contains all the specifications of the goods required. When the
order arrives on gate GRN is prepared and a specific GRN number is assigned to the
order. This GRN is received by Asset section and the respective assets are recorded at
the market price or cost as per the company policy. An invoice is prepared against
these assets and the goods are checked against the GRN. When GRN matches with
the goods then data is entered into the system. If payments are to be made against the
assets, data is passed to Accounts Payables section where payments are made
through cheques.
I was able to work in ECM (Employee Cost Management) section which deals with the
recording or billing the employee’s expenses and keep this record up to date as per
company’s requirements.
In this section, Bills are received by employees, in the department by ECM’s officers
and then vouchers are prepared on the system accordingly.
Types of vouchers:
Cash receipt vouchers: vouchers that are prepared to adjust any advance given to the
employee. If any advance is given cash receipt vouchers are prepared.
Bank payment vouchers: If amount exceeds by Rs.10, 000 and no advance is given
then bank payment vouchers are prepared. Payment will be made by bank/cheque.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 40
Bank receipt voucher: this voucher is prepared to adjust any advance given to
employee that is to be adjusted using bank vouchers.
Journal voucher: it is prepared when advance is given and the bill is from out of city.
The amount is reimbursed in salary.
Procedure
Employees prepare bills and pass it to admin department. Admin department checks
calculations of the bills and their accuracy and send them to Accounts department
where accountants check it as per company policy and prepare their respective
vouchers. The bills with attached vouchers are transferred for audit. Internal Auditors
check the bills and sign them. These bills are again sent to Accounts department and
then to cashier where they are paid. After payment, bills are approved and recorded in
the Accounts department as evidence of payment.
Liquidity Ratios:
Liquidity ratios are a class of financial metrics used to determine a debtor's ability to
pay off current debt obligations without raising external capital. Liquidity ratios
measure a company's ability to pay debt obligations and its margin of safety through
the calculation of metrics including the current ratio, quick ratio and operating cash
flow ratio.
a) Acid-Test Ratio. The term “Acid-test ratio” is also known as quick ratio. ...
b) Cash Ratio.
c) Current Ratio
1) Current Ratio
The current ratio is a liquidity ratio that measures whether or not a firm has enough
resources to meet its short-term obligations. It compares a firm's current assets to its
current liabilities, and is expressed as follows: The current ratio is an indication of a
firm's liquidity.
The current ratio is the classic measure of liquidity. It indicates whether the business
can pay debts due within one year out of the current assets. The current ratio reveals
how much “cover” the business has for every Rs.1 that is owed by the firm. For
example, a ratio of 1.5:1 would mean that a business has Rs.1.50 of current assets for
every Rs.1 of current liabilities.
At 30 June 2018 current assets were 6.18 times the value of current liabilities. That ratio
was more than the 3.31 times at the end of 2017, suggesting a slight improvement in
the current ratio.
A current ratio of around 6.18 is pretty encouraging for a business. It suggests that the
business has enough cash to be able to pay its dues.
But not too much finance tied up in current assets which could be reinvested or
distributed to shareholders.
A low current ratio (say less than 1.0-1.5 might suggest that the business is not well
placed to pay its debts. It might be required to raise extra finance or extend the time it
takes to pay creditors.
6.18
2018 ₨24,312,577
₨150,294,015
In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity
ratio which measures the ability of a company to use its near cash or quick assets to
extinguish or retire its current liabilities immediately.
A quick ratio that is greater than 1 means that the company has enough quick assets to
pay for its current liabilities. Quick assets (cash and cash equivalents, marketable
securities, and short-term receivables) are current assets that can be converted very
easily into cash. Hence, companies with good quick ratios are favored by creditors.
In the example above, the quick ratio of Rs.3.93 shows that Company has enough
current assets to cover its current liabilities. For every Rs.1 of current liability, the
company has Rs.3.93 of quick assets to pay for it.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 44
The ideal ratio depends greatly upon the industry that the company is in. A company
operating in an industry with a short operating cycle generally does not need a high
quick ratio. Financial ratios should be compared with industry standards to determine
whether such ratios are normal or deviate materially from what is expected.
When a quick ratio analysis is performed, the industry average comparison is important.
It helps to determine whether or not a business’s liquidity is better than average in its
particular industry.
0.95
Year 2017 ₨20,787,443
15,274,358
₨4,504,381
3.93
Year 2018 ₨24,312,577
16,801,794
₨78,834,145
Quick Ratio (Acid Test) Total Current Liability Accounts Receivable (less Bad Debts) Cash
Capital / Owner's
PKR 140,881,221 PKR 65,104,494
Equity
Typically the higher the ratio, the greater the risk to lenders and shareholders, but this is
not always the case. As with any financial metric, this can’t be analyzed in a vacuum. A
high ratio does not always mean a bad thing. Look at utility companies for instance.
They often carry high levels of debt because their operations are capital intensive. This
translates into a higher debt-to-capital ratio, but it doesn’t mean they will be insolvent
soon. Utility companies have an extremely steady base of customers and as such their
revenues are consistent. This means they are able to meet their obligations without
worrying about downturns in revenues.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 46
Contrast this with new, expanding companies. These companies might not have
established customer bases, but they still need to finance their day to day operations.
They may have steady sales at the moment, but this is not a guarantee like with the
utility companies. Eventually, the new company sales could level off or simply decrease
leaving fewer funds to service its debt. A high debt to capital ratio for this company
would indicate risk.
If the debt-to-capital ratio is greater than 1, the company has more debt than capital.
This company is extremely risky. If any more liabilities are acquired without an increase
in earning, the company might go bankrupt.
In this case, the ratio is less than 1, the debt levels are manageable and the firm is
considered less risky to invest or loan to given other factors are taken into consideration
0.17
Year 2018 140,881,221
₨24,312,577
Efficiency ratios measure a company's ability to use its assets and manage its
liabilities effectively. Although there are several efficiency ratios, they are all similar
in that they measure the time it takes to generate cash or income from a client or
liquidating inventory.
Efficiency ratios include the inventory turnover ratio, asset turnover ratio, and
receivables turnover ratio. These ratios measure how efficiently a company uses its
assets to generate revenues and its ability to manage those assets. With any
financial ratio, it's best to compare a company's ratio to its competitors in the same
industry.
The cash conversion cycle measures how many days it takes a company to receive
cash from a customer from its initial cash outlay for inventory. For example, a typical
retailer buys inventory on credit from its vendors. When the inventory is purchased, a
payable is established, but cash isn’t actually paid for some time.
The payable is paid within 30 days and the inventory is marketed to customers and
eventually sold to a customer on account. The customer then pays for the inventory
within 30 days of purchasing it.
The cash cycle measures the amount of days between paying the vendor for the
inventory and when the retailer actually receives the cash from the customer.
As with most cash flow calculations, smaller or shorter calculations are almost always
good. A small conversion cycle means that a company’s money is tied up in inventory
for less time. In other words, a company with a small conversion cycle can buy
inventory, sell it, and receive cash from customers in less time.
In this way, the cash conversion cycle can be viewed as a sales efficiency calculation. It
shows how quickly and efficiently a company can buy, sell, and collect on its inventory.
As you can see, Option’s Cash conversion cycle is 30 days. This means it takes 30
days from paying for his inventory to receive the cash from its sale. Option’s would
OPTIONS INTERNATIONAL (SMC-PVT) LTD 49
have to compare his cycle to other companies in his industry over time to see if his
cycle is reasonable or needs to be improved.
Year 2018 31
₨200,678,362
16,801,794
Total Days in Year Cash Conversion Cycle Sales (Net) Accounts Receivable (less Bad Debts)
Inventory turnover is a ratio showing how many times a company has sold and
replaced inventory during a given period. A company can then divide the days in the
period by the inventory turnover formula to calculate the days it takes to sell the
inventory on hand. It is calculated as sales divided by average inventory.
Low inventory turnover ratio is a signal of inefficiency, since inventory usually has a rate
of return of zero. It also implies either poor sales or excess inventory.
A low turnover rate can indicate poor liquidity, possible overstocking, and obsolescence,
but it may also reflect a planned inventory buildup in the case of material shortages or in
anticipation of rapidly rising prices.
High inventory turnover ratio implies either strong sales or ineffective buying (the
company buys too often in small quantities, therefore the buying price is higher).A high
inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or
inadequate inventory levels, which may lead to a loss in business. High inventory levels
are usual unhealthy because they represent an investment with a rate of return of zero.
It also opens the company up to trouble if the prices begin to fall.
A good rule of thumb is that if inventory turnover ratio multiply by gross profit margin (in
percentage) is 100 percent or higher, then the average inventory is not too high.
8.8
Year 2017 122,079,337
13,912,250
9.6
Year 2018 147,546,835
15,303,475
Since the accounts payable turnover ratio indicates how quickly a company pays off
its vendors, it is used by supplies and creditors to help decide whether or not to
grant credit to a business. As with most liquidity ratios, a higher ratio is almost
always more favorable than a lower ratio.
A higher ratio shows suppliers and creditors that the company pays its bills
frequently and regularly. It also implies that new vendors will get paid back quickly. A
high turnover ratio can be used to negotiate favorable credit terms in the future.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 52
As with all ratios, the accounts payable turnover is specific to different industries.
Every industry has a slightly different standard. This ratio is best used to compare
similar companies in the same industry.
As you can see, Options International average accounts payable for the year was
PKR 6,955,905 (beginning plus ending divided by 2). Based on this formula turnover
ratio is 3. This means that Options International pays his vendors back on average
once every six months of twice a year. This is not a high turnover ratio, but it should
be compared to others in Options International.
3%
Year 2018 ₨200,678,362
₨6,955,905
4) Fixed-asset turnover
Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value
of fixed assets (on the balance sheet). It indicates how well the business is using its
fixed assets to generate sales. Generally speaking, the higher the ratio, the better,
because a high ratio indicates the business has less money tied up in fixed assets
for each unit of currency of sales revenue. A declining ratio may indicate that the
business is over-invested in plant, equipment, or other fixed assets
OPTIONS INTERNATIONAL (SMC-PVT) LTD 53
Options International has annual sales of PKR 200,678,362 in the year 2018.Its net
fixed assets are PKR 14,899,783. Based on the given figures, the fixed asset
turnover ratio for the year is 13.47, meaning that for every one Rupee invested in
fixed assets, a return of almost ten Rupee is earned. The average net fixed asset
figure is calculated by adding the beginning and ending balances, then dividing that
number by 2.
Low Ratio
When the business is underperforming in sales and has a relative amount of fixed
assets invested, the FAT ratio may be low.
The return on fixed assets is not favorable with this low ratio, due to the fact that the
amount of the investment made on property and equipment is the biggest among the
asset categories; therefore, revenue generation is reliant upon these assets.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 54
This is especially true for manufacturing businesses that utilize big machines and
facilities. Although not all low ratios are bad, if the company just made some new
large purchases of fixed assets for modernization, the low FAT may have a negative
connotation.
A declining ratio may also suggest that the company is over-investing in its fixed
assets.
High Ratio
A high ratio, on the other hand, is preferred for most businesses. It indicates that
there is a greater efficiency in regards to managing fixed assets; therefore, it gives
higher returns on asset investments.
Fixed assets vary significantly from one company to another and from one industry
to another, so it is relevant to compare ratios of similar types of businesses.
10
2017 ₨167,231,968
17,062,911
13
2018 ₨200,678,362
14,899,783
2018 2017
Fixed Asset Turnover 13 10
Sales (Net) ₨200,678,362 ₨167,231,968
Furn & Equip. Fixed Assets (less
14,899,783 17,062,911
depreciation)
Fixed Asset Turnover Sales (Net) Furn & Equip. Fixed Assets (less depreciation)
OPTIONS INTERNATIONAL (SMC-PVT) LTD 55
Profitability Ratios:
Profitability ratios are a class of financial metrics that are used to assess a
business's ability to generate earnings relative to its associated expenses. For most
of these ratios, having a higher value relative to a competitor's ratio or relative to the
same ratio from a previous period indicates that the company is doing well.
The types of profitability ratios are:
Net profit margin, or net margin, is equal to net income or profits divided by total
revenue, and represents how much profit each Rupee of sales generates. Net profit
margin is the ratio of net profits or net income to revenues for a company, business
segment or product. Net profit margin is typically expressed as a percentage but can
also be represented in decimal form. The net profit margin illustrates how much of
each Rupee collected by a company as revenue translates into profit. The term "net
profits" is equivalent to "net income" on the income statement, and one can use the
terms interchangeably. Most commonly, investors will refer to net profit margin as
the "net margin" and describe it as "net income" divided by total sales instead of
using the term "net profits."
Net profit (NP) ratio is a useful tool to measure the overall profitability of the business. A
high ratio indicates the efficient management of the affairs of business.
There is no norm to interpret this ratio. To see whether the business is constantly
improving its profitability or not, the analyst should compare the ratio with the previous
years’ ratio, the industry’s average and the budgeted net profit ratio.
The use of net profit ratio in conjunction with the assets turnover ratio helps in
ascertaining how profitably the assets have been used during the period.
51.8%
Year 2017 ₨86,570,040
₨167,231,968
45.3%
Year 2018 ₨90,881,222
₨200,678,362
Return on Sales/ Net Profit Margin Net Income for the year Sales (Net)
OPTIONS INTERNATIONAL (SMC-PVT) LTD 57
2) Return on Capital/Equity
Return on Equity a profitability ratio, measures how efficiently a company is using its
capital. Simply put, ROE measures how well a company is using its capital to
generate profits. The return on capital employed is considered one of the best
profitability ratios and is commonly used by investors to determine whether a
company is suitable to invest in or not.
The return on capital employed shows how much operating income is generated for
each Rupee invested in capital. A higher ROE is always more favorable as it implies
that more profits are generated per Rupee of capital employed. However, as with any
other financial ratios, calculating just the ROE of a company is not enough. Other
profitability ratios such as return on assets, return on invested capital, and return on
equity should be used in conjunction with ROE to determine whether a company is truly
profitable or not.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 58
In the example with Options International, a ROE of 65% in 2018 means that for every
Rupee invested in capital, the company generated 65% in operating income. To
determine whether Options International ROE is good, it is important to compare it
against its competitors and not across industries.
65%
Year 2018 ₨90,881,222
140,881,221
Return on Capital/Equity Net Income for the year Capital / Owner's Equity
3) Return on Assets
The distinct difference between return on assets and asset turnover is that the return on
assets considers net income and asset turnover considers revenues. By using net
income instead of revenues, the return on assets formula factors in a company's
expenses.
The return on assets ratio measures how effectively a company can earn a return on its
investment in assets. In other words, ROA shows how efficiently a company can convert
the money used to purchase assets into net income or profits.
It only makes sense that a higher ratio is more favorable to investors because it shows
that the company is more effectively managing its assets to produce greater amounts of
net income. A positive ROA ratio usually indicates an upward profit trend as well. ROA
is most useful for comparing companies in the same industry as different industries use
assets differently. For instance, construction companies use large, expensive
equipment while software companies use computers and servers.
55%
Year 2018 ₨90,881,222
₨165,193,798
Return on Assets/ Asset Turnover Ratio Net Income for the year Total Assets
OPTIONS INTERNATIONAL (SMC-PVT) LTD 60
Gross profit margin is a financial metric used to assess a company's financial health and
business model by revealing the proportion of money left over from revenues after
accounting for the cost of goods sold. One can calculate gross profit margin, also known
as gross margin, by dividing gross profit by revenues.
Generally, the higher the gross profit margin the better. A high gross profit margin
means that the company did well in managing its cost of sales. It also shows that the
company has more to cover for operating, financing, and other costs. The gross profit
margin may be improved by increasing sales price or decreasing cost of sales.
However, such measures may have negative effects such as decrease in sales volume
due to increased prices, or lower product quality as a result of cutting costs.
Nonetheless, the gross profit margin should be relatively stable except when there is
significant change to the company’s business model.
OPTIONS INTERNATIONAL (SMC-PVT) LTD 61
26%
Year 2018 ₨53,131,527
₨200,678,362
The operating profit margin ratio is a key indicator for investors and creditors to see how
businesses are supporting their operations. If companies can make enough money from
their operations to support the business, the company is usually considered more
stable. A higher operating margin is more favorable compared with a lower ratio
because this shows that the company is making enough money from its ongoing
operations to pay for its variable costs as well as its fixed costs.
For instance, Options International with an operating margin ratio of 17 percent means
that for every Rupee of income, only 17 percent remains after the operating expenses
have been paid. This also means that only 17 percent is left over to cover the non-
operating expenses.
16.59%
Year 2017 ₨27,739,369
₨167,231,968
16.76%
Year 2018 ₨33,628,674
₨200,678,362
₨ ₨
Cash 78,834,145 4,504,381
₨ ₨
Accounts payable 6,955,905 6,323,550
₨ ₨
Total Current Liability 24,312,577 20,787,443
Ratios Analysis
Liquidity 2018 2017
Current Ratio 6.18 3.31
APPENDIX
Letter Of Authorization
OPTIONS INTERNATIONAL (SMC-PVT) LTD 66
BIBIOGRAPHY
MARKEING MANAGEMENT
(PHILIPKOTLAR)
PERSONNEL MANAGEMENT
(C.B.MAMORIA)
FINANCE MANAGEMENT
(I. M. PANDEY)