Morningstar Bakery is a new expansion of organic bakery specializing in gluten, wheat and dairy free products. Within the last three years there have been significant increases in demand for these bakery products. People are affected by many diseases now days. It has been only in the last few years that medical doctors have begun to diagnosis food allergies correctly. What was once an unknown problem that affected so many people with no recourse has become a manageable ailment that is easily dealt with through modification of diets. This is very positive for both those people that are affected as well as bakeries such as Morningstar that specialize in these products. The Products Morningstar offers a wide range of exciting products. The first group is spelt breads, muffins, and pastries. Spelt is used as there are far fewer people that are allergic to this grain. Yeast allergies are also common and Morningstar offers a menu of yeast free breads. Dairy free muffins and pastries are offered for vegans. Lastly, egg free breads, muffins, and pastries are offered. Customers Morningstar will focus on three distinct customer segments. The first group is the Allergy group. This segment is growing at 15% a year with 32,000 potential customers. The second niche is the Doctor group. This segment is also growing at 15% with 14,200 potential people. The last group is the Dieters group. This segment is typically making modifications to their diet based on their desire to lose weight. This niche also is growing at 15% with 48,000 possible customers. Management Team Recognizing the importance of human capital, Morningstar has assembled a strong management team. The team is led by Mr Abhishek Acharya. Mr Abhishek Acharya ha s been with Morningstar with 10 years of baking experience. In addition to his industry specific experience, Abhishek has had 2 years of management experience. Devangi Chauhan brings financial skills to Morningstar after a MBA with B Com background. Rosismita Baral will lead the marketing efforts having participated in her own PR firm. Lastly, Archana Rungta will be on the team as an assistant baker with over five years of experience. Morningstar is an exciting opportunity that combines, fresh baked goods with spelt, yeast free, dairy free, and egg free products, addressing the recent need for these new products. Demand for these products is expected to grow exponentially as medical doctors become more and more aware of food allergies Indians are afflicted with. Profitability is forecasted to
occur by month three. Through a combination of a strong management team, a solid business model, and exciting, market demanded products will allow Morningstar to quickly gain market penetration and cash richness.
1.1 Objectives
1. To establish a working storefront for Morningstar bakery. 2. To develop the strong presence in the community needed to support sales goals. 3. To develop a full menu by the end of the second quarter.
1.2 Mission
Morningstar Bakery aims to be a cornerstone in the community creating a neighborhood atmosphere where customers feel comfortable and become instant regulars. We are sensitive to the often over-looked population of allergy sufferers and cater to their needs for healthy, delicious baked goods. We seek fair and responsible profit, enough to keep the company financially healthy for the long term and to fairly compensate owners and investors for their money and risk.
Company Summary
Morningstar Bakery is located in Bhubaneswar. It is also a prime location for all the employees of the surrounding businesses. The bakery sells non-wheat and other health specific breads, sweets and pastries to the surrounding community every Monday through Friday.
Products
Morningstar Bakery provides non-gluten baked goods and pastries to diet-conscious and wheat-allergic consumers. Special considerations are made for all common food allergies such as dairy, yeast, wheat, and eggs. Example of goods: Spelt breads, muffins and pastries Spelt flour is the most common wheat-alternative flour as it has the same characteristics as wheat which provides similar taste, consistency and behaviors creating goods that are just as good as any wheat baked good. Yeast-free breads Many people have an allergy to yeast, or have been warned by their doctors not to eat it. We provide a line of yeast-free breads. Dairy-free muffins and pastries Most breads do not require any dairy products, so they are not a consideration. Muffins and pastries most often require butter. To avoid this, we use a soy substitute. Egg-free breads, muffins and pastries Eggs are most common in muffins and pastries. Applesauce can be used as a substitute as it provides the same amount of moisture that is required
Because this group is so large, Morningstar has chosen to limit its analysis to other glutenfree bakeries.
Friendly, neighborhood-feel atmosphere. Quality baked goods for everyone to enjoy at a fair price.
Bread sales in the summer months will be slightly higher since more people will be having small fist and picnics requiring items such as burger and hotdog buns. Bread and pastry sales will be higher in November and December because of the food-oriented holidays. Coffee sales will be higher in winter months, and for summer months sales of sodas and iced beverages will increase.
Our competitive edge is our quality of goods. We use only organic flours of the highest quality that create incredible non-gluten goods that can't be matched anywhere else in town. We also focus mainly on non-gluten goods. The other bakeries in town focus on wheat goods and sometimes, as an afterthought, use alternative flours.
Management Summary
Abhishek acharya is the founder of Morningstar Bakery. He brings to the bakery his experience as a baker and as an entrepreneur. He has worked as a baker for over 10 years including two years as an apprentice in a well-known Nissan patisserie. As a teenager he helped his parents at the family's general store, both in sales and marketing. For his last two years at his family's store, he was the general employee manager. His duties at the bakery will include employee hiring and training, head baker and store management. Devangi Chauhan has run his own successful family business and has recently completed her MBA. Her duties will include the bookkeeping, inventory management and stock fulfillment. Rosismita Baral will be assisting the Morningstar Bakery in its marketing campaigns on a part-time basis. Archana Rungta has worked as a baker for over five years and will be the assistant baker. Her responsibilities will also include the management of the bakery shopping list.
PBIT PAT Share Capital D/E Ratio IRR DSCR Total turnover
100.23
132.77
299.62
800
960
900.24
1012.77
Financial Plan
The following sections will outline important financial assumptions.
Manufacturing ingredients, i.e. flour, sugar, yeast and butter. Payroll. Mortgage. Utilities. Advertising
(Misc. Fixed Assets) 0.00 vehicle Depreciation 1.1 Net Block 1.2 Capital WIP 2 NON CURRENT ASSETS INVESTMENTS 0.08 0.00 0.50 1.00 0.00
(Debtors > 6 months) 0.00 (Security Deposits) 0.08 0.00 (Tax Deducted at
Source) (Priliminary expenditure Not yet written off) 2.1 Total NCA 3 CURRENT ASSETS 3.1 Cash & Bank balance 1.10 (Liquid Cash) (FDR) (Current account) (Interest on FDR) 3.2 Sundry Debtors 1.10 0.00 0.00 0.00 3.16 0.27 0.10 0.00 0.16 0.00 1.13 0.46 0.00 4.12 0.70 0.00 3.42 0.00 8.06 0.08 0.00 3.20 1.95 0.00 1.25 0.00 48.00 28.08 0.00 4.96 3.46 0.00 1.50 0.00 57.00 28.08 0.00 609.84 671.11 609.84 671.11 0.00 0.00 0.00 50.65 0.08 0.00 0.00 0.00 0.00 53.19 0.00 0.00 0.08 0.00
0.19 0.19
0.00 0.00
(Balance with Excise Dept.) 0.00 (Advance to Supplier) 0.00 (Advance IT/TDS) Others 0.00 0.56
1.85
12.26
79.28
90.04
660.57 724.30
3.5 Inventory (Cl. Stock of RM) (Cl. Stock of FG) Total CA(3.4+3.5) Total CA+NCA Tally With BS Diff. 4 CURRENT LIABILITIES
155.00 109.97 123.72 0.00 155.00 245.04 770.54 848.02 245.04 770.54 848.02 245.04 770.54 848.02 0.00 0.00 0.00 109.97 123.72
4.1 Sundry Creditors for goods 17.70 I) Other CL & Provisions II) Advance against Sales
23.17
20.50
16.00
20.00
5.00
5.00
2.66
17.30
2.94
1.50
2.25
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4.2 Misc. Current Liabilities- TL inst.due 0.00 4.3 SUB-TOTAL (4.1+4.2) 4.4 Bank Borrowing (Allahabad Bank) 4.5 Total CL(4.3+4.4)
0.00
25.06
0.00
0.00
0.00
0.00
22.25
5.00
5.00
5 Net Current Assets 25.26 CURRENT RATIO QUICK RATIO TOTAL APPLICATION FINANCED BY :6 LONG TERM LOANS 6.1 Secured Loans (Allahabad Bank) (Interest on TL) (From Financial Institutions) 6.2 Unsecured Loans 0.00 0.00 0.00 2.24 0.24
132.11 144.86
26.35
27.32
178.63
215.71
0.00 0.00
0.00 0.00
0.00 0.00
0.00 24.50
0.00 12.00
0.00 14.00
0.00 14.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00 0.07
0.00 0.00
24.50 0.00
12.00 0.00
14.00 0.00
14.00 0.00
6.3 Deferred Tax Liability 0.10 6.4 SUB-TOTAL (6.1+6.2+6.3) 7 SHARE HOLDER'S FUND
0.10
0.07
105.52
101.22
61.00
66.47
40.23
1.00
1.00
45.00
65.00
85.00
21.00
21.00
7.2 Add: Share Premium Account 0.00 Add:Share Application Money 24.50 7.3 Genral Reserve 7.4 Add: P/L Account Net Worth Less: Deffered Tax Assets 0.34 0.40 26.25
0.00
0.00
20.00
5.00
0.00
0.00
0.00 62.00
0.00 190.13
128.13 89.50
0.00
0.00 152.00 211.13 300.64 213.00 277.60 340.87 213.00 277.60 340.87 0.00 490.19 490.11
7.5 Tangible Net Worth 26.25 7.6 Capital Employed TOTAL SOURCES Diff. 26.35 26.35 0.00
(Rs/Lacs) Year ending Particulars 2009 2010 2011 2012 2013 2014 2015
AUDITED AUDITED AUDITED PROVISINAL PROJ. PROJ. PROJ. 132.77 299.62 800.00 960.00 900.24 1012.77
Other Income 0.00 less : Excise Duty 0.00 Net sales 100.23
0.00 0.00
0.00 0.00
0.00 0.00
0.00 132.77
0.00 299.62
0.00 800.00
148.69
316.10
691.57
Op.Stock of RM 7.42 Purchase of Raw Materials 110.72 (Cl. Stock of RM) 24.11 b Trading .Expenses 4.83
24.11
2.04
15.96
790.09 661.75 742.95 0.00 47.72 64.96 65.64 10.69 73.08 69.60 12.02
c Power & Fuel . 0.21 Other d manufacturin .g expenses 0.00 e Processing .expenses 4.13
0.36
1.53
12.00
14.50
98.87
151.32
326.21
737.23
ae) Add: Op. Stock of FG 5.14 Less : Cl. Stock of FG 16.70 h Cost of .Goods Sold 87.30 iAdmn.,Sellin g& Distribution& Other Exps 12.33 16.70 49.45 118.57 49.45 106.21 269.45 106.21 145.00 698.44 145.00 39.39 155.00 45.01 45.01 50.64
12.74
11.51
39.98
57.06
61.26
65.36
0.00
0.00
16.09
24.21
28.08
0.00
0.00 0.00
14.20 0.00
22.96 0.00
26.73 0.00
(Interest on vehicle Loan) 0.00 (bank Charges & commission) 0.00 (Others) 0.00
1.35 0.00
0.00 0.00
0.00 0.00
jCost of Sales .(g+h+I+j) 99.63 k Operating .Profit Add: Other Income (Interest Received) (Comm. Received) 0.60 0.00 0.00 0.00
912.95 740.34 883.29 47.05 0.00 0.00 0.00 159.90 129.48 0.00 0.00 0.00 0.00 0.00 0.00
lPBT . m Tax .Provisions Deffered For Tax Assets/ liability n PAT . o Adjustment . p PAT After .Adjustment Profit distributed through : q Withdrawal . rNet Profit.Transf. To Capital account
0.60 0.19
1.45 0.48
2.57 0.79
37.37 11.54
47.05 14.54
0.13 1.91 0.00 1.91 25.83 0.00 25.83 32.51 0.00 32.51 128.13 89.50 0.00 0.00
128.13 89.50
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.40
144.58 103.79
SL.NO.
Year
ending
2011
2012
Operating parameters 1a 1b Gross sales Net Sales % INCREASE IN GROSS SALE 1c 2 3 Net Income
AUDITED PROVISINAL 299.62 299.62 299.62 269.45 30.17 10.07% 800.00 800.00 800.00 698.44 101.56 12.70%
100.23
Cost of Goods Sold 87.30 Gross Profit (1-2) GPM 12.92 12.90%
4 5 6 7
7.62 0.71 0.00 0.71 0.53% 0.00 0.71 0.53% 0.22 0.49
11.51 18.66 16.09 2.57 0.86% 0.00 2.57 0.86% 0.66 1.91
39.98 61.58 24.21 37.37 4.67% 0.00 37.37 4.67% 11.54 25.83
57.06 75.13 28.08 47.05 4.90% 0.00 47.05 4.90% 14.54 32.51
8 9
PBT / Gross Sales (%) 0.60% 10 11 Provision for Taxation Net Profit (9-10) 0.19 0.40
NPM PBDIT
0.40% 1.10
13 14 15 16 17 18
Net Profit Transf. To Capital a/c (1112) 0.40 Drawing Retained Profit (12+13-14) Depreciation Cash Generation (11+16) Drawing (%) Financial Parameters 0.00 0.40 0.50 0.90 0.00%
19 20 21 22 23 24
Paid-up Capital
1.00
Add: Share Premium Account 0.00 Add: Share Application Money 24.50 Add: General Reserve 0.75
Tangible Net Worth 26.25 Long Term Liabilities (Secured Loans) 0.10 0.00
27.32 1.00 0.69 13.76 0.00 0.00 0.00 0.00 0.00 53.33 51.49 1.13 0.72 40.47 23.17 17.30 0.00 12.87 27.32 1.32
178.62 58.00 51.78 100.49 0.19 0.00 0.00 0.00 0.00 134.43 122.17 8.06 4.20 108.26 20.50 28.00 59.76 26.17 178.63 1.24
215.71 170.99 148.93 0.00 0.00 0.00 0.00 0.00 0.00 224.28 145.00 48.00 31.28 157.50 16.00 1.50 140.00 66.78 215.71 1.42
213.00 148.93 130.21 0.00 0.00 0.00 0.00 0.00 0.00 245.04 155.00 57.00 33.04 162.25 20.00 2.25 140.00 82.79 213.00 1.51
(Security Deposits) 0.08 (Other Non Current Assets) 0.00 29 Total Current Assets (Inventory) 45.63 40.81
(Receivables Export) < 6 months 3.16 (Other current assets) 30 Total Current Liabilities (Creditors) (Other curent liabilities) 1.66 20.36 17.70 2.66
33 34 35 36 37
0.00
TOL / TNW Ratio 0.78 Interest Coverage Ratio #DIV/0! Return on Avg. Capital Employed Income Value of the bank 2.82% #DIV/0!