Description
The document about the analysis of return of investment calculation for Broadway Pizza.
The following exhibit is given to us in percentage. We are given that the building cost for a typical Broadway Pizza is $ 1 million. From this we can calculate the other investment. We are also given the revenue of a typical store as $ 1.683 million. From this we could calculate the cost of a store. Investment and Cost Investment Robotic Character Kitchen Equipment Other Attractions Building Costs Research, developments, architect total Revenue Total Total revenue Food & beverage revenue Game revenue Cost as percentage of sales Cost of goods Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Maintenance and repairs Subtotal Income before taxes Revenue (in Millions) 100% 1.683 75% 1.26225 25% 0.42075 21% 25% 6% 5% 5% 8% 4% 5% 8% 4% 91% 9% 0.35343 0.42075 0.10098 0.08415 0.08415 0.13464 0.06732 0.08415 0.13464 0.06732 1.53153 0.15147
Percentage Cost (In Millions) 35% 1.09375 16% 0.5 14% 0.4375 32% 1 3% 0.09375 100% 3.125
To calculate Return on Investment To calculate the investment for food and beverage we have included just Kitchen Equipment and Building Cost as investment. The Building Cost for food and beverage was calculated by considering the layout given. In the layout 57’*30’ is occupied by kitchen and 56’*75’ is occupied by dining room. This is then divided by the total area of building which is 75’*145’. It comes to 0.5434 million for food and beverage.
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For calculating the cost whole of cost of goods sold was considered as food and beverages. The cost of Maintenance and Repairs was not considered as it will be mostly for Games. The labor including benefits is calculated by making use of exhibit 6, in which it is just 26% of total sales The marketing and advertising is calculated by making use of exhibit 6, in which it is just 2% of total sales The depreciation is calculated by considering that $ 0.08415 million depreciation was for investments like robotic character, kitchen equipment and building cost. The rest of the investment does not depreciate. Similarly the depreciation for $ 1.0434 million was calculated The cost of rent and utilities is calculated by considering the amount of space is occupied by the kitchen and dining hall, which comes to 54% in terms of area The remaining cost were considered as 75% of the total costs
The ROI for food and beverages came out to be 16%
Return on Investment on Food Investment Cost (In Millions) Kitchen Equipment 0.5 Building Costs 0.5434 Total 1.0434 Revenue Food & beverage revenue Cost Cost of goods Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Total Income before Taxes Revenue (in Millions) 1.26225
0.35343 0.32819 0.07574 0.02525 0.03385 0.07316 0.03658 0.06311 0.10098 1.090278916 0.171971084
ROI
16%
To calculate the total investment for games, investments like Robotic Character, Other Attractions, Research & Development was considered fully. Whereas, for calculating building cost of games it is found out by subtracting $ 1 million by 0.5434 (food and beverages). ? ? The cost of goods sold is not considered for games and maintenance and repair cost is fully considered for games The labor including benefits, marketing & advertising, depreciation, rent, utilities is calculated by subtracting the total cost by the cost of similar items in food and beverages For the remaining items 25% of total cost was apportioned
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The return on investment for games comes out to be 1%.
Return on Investment on Games Cost (In Millions) 1.09375 0.4375 0.4565 0.09375 2.0815 Revenue (In Millions) 0.42075
Investment Robotic Character Other Attractions Building Costs Research, developments, architect Total Revenue Game revenue Cost Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Maintenance and repairs Total Income before Taxes ROI
0.09257 0.02525 0.05891 0.05030 0.06147 0.03073 0.02104 0.03366 0.01683 0.39074 0.03001 1%
Capital Turnover Ratio Interest cost for Broadway Pizza is $ 0.08415 million. Assume that rate of interest is 10%, in which case the total debt is $ 0.8415 million. Thus, the capital employed is = $ (3.125 – 0.8415) = $ 2.2835 million. Capital Turnover Ratio = COGS / Avg Capital Employed. ? For Food & Beverage Capital Turnover Ratio = 1.0902 / 2.2835 = 47.7 % ? For Games Capital Turnover Ratio = 0.39074 / 2.2835 = 17.11% Asset Turnover Ratio The formula is = Revenue / Total assets ?For Food & Beverage The following assets for foods & beverages are considered, kitchen equipments and building cost. For building cost $ 0.5434 million is considered and is explained above. Asset Turnover Ratio = 1.26225 / 1.0434 = 1.209 ?For Games The following assets were considered for games: robotic characters, other attraction, research & development and $ 0.4565 million as building cost. Asset Turnover Ratio = 0.42075 / 2.0815 = 0.202
doc_664305327.docx
The document about the analysis of return of investment calculation for Broadway Pizza.
The following exhibit is given to us in percentage. We are given that the building cost for a typical Broadway Pizza is $ 1 million. From this we can calculate the other investment. We are also given the revenue of a typical store as $ 1.683 million. From this we could calculate the cost of a store. Investment and Cost Investment Robotic Character Kitchen Equipment Other Attractions Building Costs Research, developments, architect total Revenue Total Total revenue Food & beverage revenue Game revenue Cost as percentage of sales Cost of goods Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Maintenance and repairs Subtotal Income before taxes Revenue (in Millions) 100% 1.683 75% 1.26225 25% 0.42075 21% 25% 6% 5% 5% 8% 4% 5% 8% 4% 91% 9% 0.35343 0.42075 0.10098 0.08415 0.08415 0.13464 0.06732 0.08415 0.13464 0.06732 1.53153 0.15147
Percentage Cost (In Millions) 35% 1.09375 16% 0.5 14% 0.4375 32% 1 3% 0.09375 100% 3.125
To calculate Return on Investment To calculate the investment for food and beverage we have included just Kitchen Equipment and Building Cost as investment. The Building Cost for food and beverage was calculated by considering the layout given. In the layout 57’*30’ is occupied by kitchen and 56’*75’ is occupied by dining room. This is then divided by the total area of building which is 75’*145’. It comes to 0.5434 million for food and beverage.
? ? ? ? ?
? ?
For calculating the cost whole of cost of goods sold was considered as food and beverages. The cost of Maintenance and Repairs was not considered as it will be mostly for Games. The labor including benefits is calculated by making use of exhibit 6, in which it is just 26% of total sales The marketing and advertising is calculated by making use of exhibit 6, in which it is just 2% of total sales The depreciation is calculated by considering that $ 0.08415 million depreciation was for investments like robotic character, kitchen equipment and building cost. The rest of the investment does not depreciate. Similarly the depreciation for $ 1.0434 million was calculated The cost of rent and utilities is calculated by considering the amount of space is occupied by the kitchen and dining hall, which comes to 54% in terms of area The remaining cost were considered as 75% of the total costs
The ROI for food and beverages came out to be 16%
Return on Investment on Food Investment Cost (In Millions) Kitchen Equipment 0.5 Building Costs 0.5434 Total 1.0434 Revenue Food & beverage revenue Cost Cost of goods Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Total Income before Taxes Revenue (in Millions) 1.26225
0.35343 0.32819 0.07574 0.02525 0.03385 0.07316 0.03658 0.06311 0.10098 1.090278916 0.171971084
ROI
16%
To calculate the total investment for games, investments like Robotic Character, Other Attractions, Research & Development was considered fully. Whereas, for calculating building cost of games it is found out by subtracting $ 1 million by 0.5434 (food and beverages). ? ? The cost of goods sold is not considered for games and maintenance and repair cost is fully considered for games The labor including benefits, marketing & advertising, depreciation, rent, utilities is calculated by subtracting the total cost by the cost of similar items in food and beverages For the remaining items 25% of total cost was apportioned
?
The return on investment for games comes out to be 1%.
Return on Investment on Games Cost (In Millions) 1.09375 0.4375 0.4565 0.09375 2.0815 Revenue (In Millions) 0.42075
Investment Robotic Character Other Attractions Building Costs Research, developments, architect Total Revenue Game revenue Cost Labor including benefits Franchise fee to patent company Marketing and advertising Depreciation Rent Utilities Interest general & administrative Maintenance and repairs Total Income before Taxes ROI
0.09257 0.02525 0.05891 0.05030 0.06147 0.03073 0.02104 0.03366 0.01683 0.39074 0.03001 1%
Capital Turnover Ratio Interest cost for Broadway Pizza is $ 0.08415 million. Assume that rate of interest is 10%, in which case the total debt is $ 0.8415 million. Thus, the capital employed is = $ (3.125 – 0.8415) = $ 2.2835 million. Capital Turnover Ratio = COGS / Avg Capital Employed. ? For Food & Beverage Capital Turnover Ratio = 1.0902 / 2.2835 = 47.7 % ? For Games Capital Turnover Ratio = 0.39074 / 2.2835 = 17.11% Asset Turnover Ratio The formula is = Revenue / Total assets ?For Food & Beverage The following assets for foods & beverages are considered, kitchen equipments and building cost. For building cost $ 0.5434 million is considered and is explained above. Asset Turnover Ratio = 1.26225 / 1.0434 = 1.209 ?For Games The following assets were considered for games: robotic characters, other attraction, research & development and $ 0.4565 million as building cost. Asset Turnover Ratio = 0.42075 / 2.0815 = 0.202
doc_664305327.docx