DOLPHIN SEA FOOD

RESTAURANT
(GULISTAN-E-JAUHAR KARACHI)

Business Feasibility Report

Groups Members:
Salman H Latif 56830
Tariq Mehmood 56908
Qamar U Din 57897
Syed Moaz Ali 55634
PROJECT BRIEF
 Dolphin is the name proposed for our
Sea food restaurant. It will be located
into the mainstream of Gulistan – e –
Jauhar. Dolphin would provide to its
customers a whole new experience of
dine in and take away. The
recommended area for the proposed
business setup will be in a densely
populated middle income area (for
example Gulistan-e-Jauhar, Karachi).
VISION
To create the best, branded, healthy eating
restaurant in the PK, to be recognized for
providing great food, entertainment and fast,
efficient friendly service.

MISSION
Our Team will create a strong restaurant by
providing unique, healthy, consistent and exciting
eating experiences to all our clients in the form of
restaurants, takeaways and other outside services.
CONTENTS
 Project Investment
 SWOT ANALYSIS

 Forecasted Income Statement

 Forecasted Balance Sheet
 Key Assumptions
 Projected Financial Ratios
 Common Sizing Of Income Statement
 Common Sizing Of Balance Sheet
PROJECT INVESTMENT
. .

Item: Cost (Rs.)

Construction Cost 1,307,000
Dining and Office Furniture 542,250
Equipment and Machinery 967,000
Advance Rent 1,200,000
Preliminary Expenses 50,000
Working Capital 1,036,000
Total 5,102,250
.
SWOT ANALYSIS - STRENGTHS
 High-quality food offerings that exceed
competitor’s offerings in quality, presentation,
and price.
 Strong Cash Flows.

 Innovative range of Sea foods under one roof.

SWOT ANALYSIS - WEAKNESSES

A limited marketing budget to develop

brand awareness.
 Lack of knowledge about our customers.
 SWOT ANALYSIS - OPPORTUNITIES
 Growing market with a significant percentage
of the target market still not aware that Sea
food exists.
 Balanced menu.

 Customer focus.

 Increase delivery service.

 SWOT ANALYSIS - THREATS

 Competition from other Sea food

restaurants.
 A slump in the economy reducing
customer's disposable income spent on
eating out.
 Increasing wage rates directly affect menu
prices.
 Changing customer demands.

 Rising raw material costs.

 FORECASTED INCOME STATEMENT
YEAR YEAR YEAR YEAR YEAR
2016 2017 2018 2019 2020

NET SALES (15%increase/year) 10,015,200 11,517,480 13,245,102 15,231,867 17,516,647

RAW MATERIAL COST(10% increase/year) (4,910,141) (5,401,155) (5,941,270) (6,535,397) (7,188,937)

GROSS PROFIT 5,105,059 6,116,325 7,303,832 8,696,470 10,327,710

UTILITIES 624,000 686,400 755,040 830,544 913,598

LABOR & SALARIES(10% increase/year) 1,074,000 1,181,400 1,299,540 1,429,494 1,572,443
RENT EXPENSE 1,200,000 1,320,000 1,452,000 1,597,200 1,756,920
OFFICE AND MESCELLANEOUS EXPENSE 72,000 79,200 87,120 95,832 105,415
AMORTIZATION EXPENSE 10,000 10,000 10,000 10,000 10,000
DEPRECIATION EXPENSE 281,625 253,462 228,116 205,305 184,774
MAINTANCE EXPENSE 21,758 19,582 17,624 15,861 14,275
SUB TOTAL (3,283,383) (3,550,044) (3,849,440) (4,184,236) (4,557,425)

OPERATING INCOME / EBIT 1,821,676 2,566,281 3,454,392 4,512,234 5,770,285

FINANCIAL CHANGE (15% PER ANNUM) (273,251) (384,942) (518,159) (676,835) (865,543)

INCOME BEFORE TAX / EBT 1,548,425 2,181,339 2,936,233 3,835,399 4,904,742

TAX(17% of EBT) (263,232) (370,828) (499,160) (652,018) (833,806)

NET PROFIT 1,285,193 1,810,511 2,437,073 3,183,381 4,070,936

 FORECASTED BALANCE SHEET
Forecasted Balance Sheet
Dolphin Sea Food Restaurant
As on 31st December 2016, 2017,2018,2019,2020
Description Year 0 Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020

ASSETS
CURRENT ASSETS
CASH AND BANK BALANCE 1,036,000 2,055,062 3,589,528 5,747,452 8,655,889 8,995,939
PREPAID RENT 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
TOTAL CURRENT ASSETS 2,236,000 3,255,062 4,789,528 6,947,452 9,855,889 10,195,939

FIXED ASSETS
MACHINERY 967,000 870,300 783,270 704,943 634,449 571,004
SHOP 1,307,000 1,176,300 1,058,670 952,803 857,523 771,770
OFFICE FIXTURES 542,250 488,025 439,223 395,300 355,770 320,193
TOTAL FIXED ASSETS 2,816,250 2,534,625 2,281,163 2,053,046 1,847,742 1,662,967
PRELIMINARY EXPENSES 50,000 40,000 30,000 20,000 10,000 -

TOTAL ASSETS 5,102,250 5,829,687 7,100,691 9,020,498 11,713,631 11,858,906

OWNERS EQUITY 2,551,125 3,648,965 5,349,918 7,768,790 11,041,215 11,858,906

LONG TERM LIABLITY 2,551,125 2,180,722 1,750,773 1,251,708 672,416 -

TOTAL EQUITY AND LIABLITY 5,102,250 5,829,687 7,100,691 9,020,498 11,713,631 11,858,906
KEY ASSUMPTIONS
Item(s) Assumptions
Sales Increase 15 % per year
Increase in Cost of Raw Materials 10 % per year
Increase in Staff Salaries 10 % per year
Increase in Utilities (Electricity / Water /Gas) 10 % per year
Increase in Rent 10 % per year
Increase in Office Expenses 10 % per year
Debt / Equity Ratio 50 : 50
Depreciation:
Shop Building & Fixtures 10 % per annum (Diminishing Balance)
Kitchenware & Machinery 10 % per annum (Diminishing Balance)
Furniture 10 % per annum (Diminishing Balance)
Equipment Annual Maintenance Cost 2.5% of Written Down Value
Raw Food Inventory – Fishes 3 Days
Raw Food Inventory – Spices & Sauce 7 Days
Lease Period 5 Years
Lease Installments Monthly
Financial Charges (Lease Rate) 15 % per annum
Tax Rate 17% of EBT
PROJECTED FINANCIAL RATIOS
Ratio 2016 2017 2018

Gross 50.97% 53.1% 55.14%

Profit
Margin
Net Profit 12.83% 16.34% 20.21%
Margin

Debt to 59.7 : 40.3 32.7 : 67.3 16.1 : 83.89

Equity
Ratio
Return on 20.84% 26.51% 29.68%
Assets

Return on 35.22% 35.19% 34.46%

Equity
 COMMON SIZING OF INCOME STATEMENT
Common Sizing Of Income Statement
Dolphin Sea Food Restaurant
As of 31st December 2016,2017,2018

Description Dec 31, 2016 Dec 31, 2017 Dec 31, 2018

NET SALES (15%increase/year) 100.00% 100.00% 100.00%

RAW MATERIAL COST (10% increase/year) 49.03% 53.93% 59.32%

GROSS PROFIT 50.97% 61.07% 72.93%

UTILITIES 6.23% 6.85% 7.54%

LABOR & SALARIES(10% increase/year) 10.72% 11.80% 12.98%

RENT EXPENSE 11.98% 13.18% 14.50%

OFFICE AND MESCELLANEOUS EXPENSE 0.72% 0.79% 0.87%

AMORTIZATION EXPENSE 0.10% 0.10% 0.10%

DEPRECIATION EXPENSE 2.81% 2.53% 2.28%

MAINTANCE EXPENSE 0.22% 0.20% 0.18%

SUB TOTAL 32.78% 35.45% 38.44%

OPERATING INCOME / EBIT 18.19% 25.62% 34.49%

FINANCIAL CHANGE (15% PER ANNUM) 2.73% 3.84% 5.17%

INCOME BEFORE TAX / EBT 15.46% 21.78% 29.32%

TAX (17% of EBT) 2.63% 3.70% 4.98%

NET PROFIT 12.83% 18.08% 24.33%

Monthly Profit After tax 1.07% 1.51% 2.03%

 COMMON SIZING OF BALANCE SHEET
Description Dec 31, 2016 Dec 31, 2017 Dec 31, 2018

ASSETS

CURRENT ASSETS
CASH AND BANK BALANCE 35.25% 50.55% 63.72%

PREPAID RENT 20.58% 16.90% 13.30%

TOTAL CURRENT ASSETS 55.84% 67.45% 77.02%

FIXED ASSETS

MACHINERY 14.93% 11.03% 7.81%

SHOP 20.18% 14.91% 10.56%

OFFICE FIXTURES 8.37% 6.19% 4.38%

TOTAL FIXED ASSETS 43.48% 32.13% 22.76%

PRELIMINARY EXPENSES 0.69% 0.42% 0.22%

TOTAL ASSETS 100.00% 100.00% 100.00%

OWNERS EQUITY 62.59% 75.34% 86.12%

LONG TERM LIABLITY 37.41% 24.66% 13.88%

TOTAL EQUITY AND LIABLITY 100.00% 100.00% 100.00%

THANK YOU