Business Plan
One of the main significant elements in the balance sheet that must point out from the Assets sides is the low amount of inventory and growing rate within the first threeyears. Inventory only increases at an 11% from 2013 to 2014, the moderate increase is due to risk management strategies. Rincon Latino is testing a new market, with numerous risk factors, we decidedthat conservative levels of inventory are a better strategy, especially all perishable items used to prepare the food. It is relatively easy to increase current levels of inventory if they are needed,because the row materials used to cook the food are always in high supply, and we don’t foresee any limited access to that market.
The cash basis of the business will allow us to quickly increasethe levels of inventory if needed, this also one of the main reason it is keen to keep cash flow in the positive side. The truck will have a straight-lined depression set a 15% annually; calculatedunder the assumption of 5 years useful life, and residual value of 12% of the fair market value at the time of purchase.
Accounts payable reflect the short term commitment of Rincon Latino Managementto provide enough liquidity in order to stay and keep healthy levels of daily operations; specially at the beginning of the business; because we know customer base will be low. Accounts payable willdecrease in the measure that we meet monthly responsibilities.
Current borrowing is reflexed on part of the long term loan, and commitment to repay accordingly. Current borrowing decreases at a rapid33% yearly, this shows the commitment of Rincon Latino to eliminate Long Term debts as quick as possible, but without jeopardizing normal daily operations.
As a new business venture, Earningassumptions are conservative specially in the first year, this reflect the fact this we are entering a completely new market, with a successful menu, proven in the nearby market of Orlando, Florida.
It...
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