Paraphrase a page and half in 6 hours.

This report helps the owner of selected restaurant to evaluate the feasibility of investing a new brew pub. The overall goal is to help selected restaurant to increase its market share and attract more customers in the next three years. By analyzing performance indicator, the owner of the restaurant is able to have a possible future performance and investment return of the brew pub. By analyzing the break-even analysis, the owner of restaurant is able to know how much revenue it needs to make to cover total fixed cost, and how long it takes to make break-even.

The report includes marketing management, innovation management, operation management, financial management, and organizational management. For each part, we analyze the decision support tools and evaluation of business simulation results. We also make the comparison from different results. The report also includes summary of results, recommended strategy, implementation plan, and conclusion.

2.4 Financial Management and Decision Making

Decision making is an important part in the financial management. Basically, decision making has five steps, including recognize the need, identify alternative decisions, evaluate alternative, choose the best one, and implement the decision. First, we need to recognize the need for making decision. To implement a new brew pub in a bar, the initial investment is $150,000. This fund includes the first year service. Besides the initial investment, there are other costs that we need to identify in our financial report. These financial factors include labor cost, utilities, suppliers and other, marketing costs, rent, debt, taxes, and financial market indicators. By analyzing these financial factors, we are able to control the financial activities. Second, we need to set alternative plan for each financial factor. By doing this, we are able to meet our financial goals and control our costs. For example, we have 1 office assistants, 1.5 salesman and 0.5 executive. The salesman and executive include part time employees. We change the salary for our employees based on Boston area level to meet our labor cost. Third, evaluate the alternatives. For each financial factor, we fit it in the financial report, and we focus on the most efficient plan for the budget control. We adjust the number of employees, price of products, and other financial factors to determine the most appropriate number. Fourth, choose the best one. After evaluation, we set up the final number of each financial factors, and get the budget we need for each part. By doing this, we can analyze the budget control, and we can decide whether we need debt from external source. Last, implement the plan. It is important to implement the plan after we identify and decide the budget we need for each financial part. We can monitor and control the cost to operate each financial activity. By follow the plan, it is important to control financial resources and achieve the goal and make revenues in the future.

3.4 Decision Support Tool for Financial Management

For decision support tools for financial management, our group used break-even analysis and financial statements analysis. The break-even analysis helps us to know how much sales we need to make to cover total cost, and on what time we can make break even. The break-even point is where total revenue equals to total fixed cost. Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss (the “break-even point”) (Riley J, 2019) According to the break-even chart, the left part means that total revenue is less than total fixed cost, and the right part means that total revenue is higher than total fixed cost.

The financial statement analysis includes balance sheet, income statement, and cash flow statement. All of them are interrelated, and the balance sheet is the sum of the rest two statements. The income statement focus on company’s revenues and expenses during a particular period. The main purpose of income statement is to convey details of profitability and business activities of the brew pub. By analyzing income statement, we are able to control our cost and expenses. The cash flow statement analyzes the cash outflows and inflows. It shows the ending cash balance of each year and all cash related items. The balance sheet shows assets, liabilities, and equity. The total assets equals the sum of liabilities and equities. The balance sheet shows the financial condition of a point of time. Under asset, the cash item comes from the ending cash balance under cash flow statement. Under equity in balance sheet, the retained earnings come from the net income from income statement. By analyzing all three financial statements, it gives a picture of financial condition of the brew pub, and it is useful to monitor any financial activities.