Pro Forma Budget – 24 Hour Multicultural Family Restaurant Analyzing the Capital and Cash Needed

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Pro Forma Budget – 24 Hour Multicultural Family Restaurant

Analyzing the Capital and Cash Needed

Before any new venturesis to begin finding investors or lenders to help them get the company started, a proper analysis of how much capital and cash with a list of the expenses is needed in order to fully explain to the investors/lenders what the money is needed for, what it will be used on specifically and when they should expect to see some returns on their investments/loans. As with any new venture, I will have to do the same in order to know exactly how much money I would need to get by business started. Below is a list of expenses with prices that I am expecting to need in order to have my company fully open and ready for business.

List of Expenses:

· Building construction (including heat and air conditioning and ventilation installation)  = $200,000 – $250,000

· Utilities/month = $2,000 – $2,500 = $24,000 – $30,000/year

· Machinery/Equipment = $150,000 – $200,000

· Furniture (Tables, chairs, reception, etc) = $20,000

· Tableware (silverware, dishes, etc) = $10,000

· Licenses and permits = $7,000

· Insurance = $8,000

· Point-of-sales system (including cash registers, computers, etc) = $8,000

· Food and drinks delivery = $15,000

· Marketing (including menus, flyers, advertising, business cards, etc) = $3,000

· Staff (uniforms, wages, training, etc) = $30,000 – Initial starting costs

Total approximate startup cost range = $475,000 – $550,000

This is the average price that most other restaurants that have built their own building have paid in the past, this means that all my pricing and the list of expenses I made seems to be on the right track according to other restaurant owners. Also another thing to consider, all the prices that were input in the list above are all high-end approximations which means there is room for changes or unexpected expenses without having to worry about getting more money.

Pro Forma Balance Sheet


Current Assets   –

Cash and Cash Equivalents   –

Accounts Receivable   –

Inventory    $53,000

Total Current Assets   $53,000

Buildings and Equipment/Machinery  $450,000

Total Assets   $503,000

Liabilities and Shareholders’ Equity

Current liabilities  –

Accounts Payable  –

Accrued Expenses  $78,000

Total Current Liabilities  $78,000

Long-Term Liabilities  –

Long-Term Debt  $450,000

Total Liabilities  $528,000

Shareholders’ Equity

Retained Earnings  $300,000

Total Shareholders Equity  $203,000

Total Liabilities and Shareholders Equity  $503,000

Pro Forma Statement of Cash Flow

Cash flows from Operating Activities

Net Income –

Changes in working capital –

Depreciation  $22,500

Increase in Accounts Receivable –

Increase in Accrued Expenses  –

Increase in Inventory  $20,000

Increase in Accounts Payable  –

Total Adjustment $42,500

Net cash Provided by Operating Activities $100,000

Cash Flows from Investing Activities –

Purchase of Building and Equipment $450,000

Net Cash Flows Provided by investing –

Cash Flows from Financing Activities – –

Proceeds from increase in long-term debt –

Principle reduction in long-term debt $4,000

Net Cash Flow Provided by Financing –

Increase in Cash  $10,000

Cash and Cash Equivalents beg of year  $50,000

Cash and Cash Equivalents end of year $70,000


Assignment -5Pro Forma Budget



1. Identify the cash and resource needs of the new business.

2. Prepare cash flow, income and balance sheet. – 3 pages 


Building on your organization design, you will begin to put numbers to the activities you have planned for your new business. In this assignment, you will create a financial plan based on your best knowledge of how your enterprise will start and operate for its initial period, usually a year. It is recognized that this plan is based on your best guesses of capital needs, costs and expenses. More importantly, this plan will help you determine how much money you will need to launch your business and operate it.


1. Review the discussion of pro forma financial statements in chapter 8 of the text.

o Chapter 8 discusses the process of financial management and its importance for forecasting, which is critical for the entrepreneur contemplating a start-up. The ability to demonstrate a firm grasp of the finances underlying a new endeavour shows prospective investors that the entrepreneur understands his or her financial needs and holds a realistic view of revenues. For the entrepreneur, the pro forma financial statements provide a path to follow in preparing the start up and operating during its initial period.

2. Prepare the pro forma financial statements.

Based on your best understanding at this point, you will prepare a consolidated balance sheet, statement of cash flows and income statement for the first year.

3. Explain your pro forma statements in an accompanying document.

Along with these pro forma financial statements, you will prepare an explanation, discussing how you arrived at the various figures.

4. Review the rubric for this assignment.


The following rubric indicates those areas you should be focusing on in preparing your assignment, and how the instructor will weigh these components relative to one another.


Activity/ Competencies Demonstrated



Content: Students are expected to   demonstrate competency in regards to critical thinking, communication   (spelling, grammar) and APA formatting in their response to the following   learning outcomes


a. Analysis the capital and cash   need that the new venture will require for its first year



b. Prepare a pro forma balance   sheet describing the financial position of the organization at the end of the   year



c. Prepare a pro forma statement of   cash flow for the first year



d. Prepare a pro forma   income statement for the first year



e. Describe how the figures in the   pro forma financial statements were derived and why you think that they are   accurate



f. Demonstrate good organization,   including a strong introduction and conclusion






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