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ASIGNMENT
Enterprising Management
Prepared by: Group 2
1. Hoàng Hà Mi –Misa ( leader)
2. Vũ Hồng Nhung- Lisa
3. Nguyễn Thanh Thủy- Laura
4. Triệu Thị Ngân-Jenny
5. Trịnh Thị Hiền-Sady
6. Ngô Thúy Nga-Moon
7. Bùi Thị Trinh-Mary
Date: September 17, 2014
NAME OF OUR SPA,
LOGO AND SOLOGAN
TABLE OF CONTENTS
I – EXECUTIVE SUMMARY
II. THE EXTERNAL ASSESSMENT
A. The Macro Environment
B. The Industry/ Sector
C. The Macro and the Micro Markets
Summary of Opportunities and Threats
III. THE INTERNAL ASSESSMENT
A. Outputs and Outcomes
B. Resource Allocation
C. Competitiveness of Physical Facilities
D. Organizational Competencies and Capabilities
E. Teams and Individuals
F. Organizational Affiliations, Alliances and Linkages
G. Management Processes
H. Management Functions
I. Organizational fit
Summary of Strengths and Weaknesses
IV – SWOT ANALYSIS
A. Opportunities
B. Threats
C. Strengths
D. Weaknesses
F. Strategic Options
V. VISION, MISSION AND OUTCOMES
A. Vision Statement
B. Mission Statement
C. Objectives, Key Result Areas (KRAs) and Performance Indicators (PIs)
C.1. Objectives
C.2. Key Result Areas and Performance Indicators (PIs)
D. Action Plan
D.1. Strategies
D.2. Programs
D.3. Activities and Tasks
D.4. Resource Allocation
D.5. Marketing Program
D.6. Operating Program
D.7. Human Resources Program
D.8. Finance Program
I. EXECUTIVE SUMMARY
Rishe spa is a new upscale destination in Thai Nguyen city, offering a complete day spa
experience. We offer seven ultra-chic, ultra-comfortable treatment rooms with the finest spa
linens and equipment. We offer massage in a variety of styles - traditional Swedish Massage,
Deep Tissue work, Hot Stone Massage, Reflexology, Sports, Pregnancy and others. We also
offer facial and body treatments, like a Vitamin C Antioxidant Facial and Demalogica's Anti-
Free Radical Treatment. The day spa has the latest in anti-aging products and techniques but
does NOT offer services on hair such as cutting, styling and coloring. The only time a pedicure
would be provided, is when it's part of a full treatment. In fact, for location, we prefer being
located near hair and nail salon for co-marketing opportunities.
1.1 Objectives
1. Achieve $31,000 in sales the third month after opening by performing 14 services per day.
2. Achieve $62,550 in sales the six month after opening by performing 29 services per day.
3. Have a local client return rate of 90% by the end of the first six months.
4. Become an established community Spa destination by the end of the first 12 months.
5. Perform 53 services per day by the end of the first year.
1.2 Mission
Our mission is to run a profitable business by providing high-end therapeutic massage and
aesthetician services in a caring, upscale, professional environment. We offer massage in a
variety of styles - traditional Swedish Massage, Sports Massage, Deep Tissue work, Sports
Massage, Hot Stone Massage, Reflexology, and others. Our licensed Demalogical offer the latest
in skin treatments, body treatments and anti-aging therapies.
Our goal is to tailor the client's experience based on initial interview information, as well as
feedback during the treatments, to ensure the client's comfort and satisfaction, and to increase
repeat business. We are mindful of the overall experience - using only the finest oils and lotions,
beauty treatments and aromatherapies. Special lighting, music, decor, and textiles are used
throughout the spa to complete the comfortable, plush environment and enhance the client's
overall spa experience.
1.3 Keys to Success
Marketing, Marketing, Marketing - Owner is a proven, 15-year sales executive. Marketing will
be the first strength to our success and a huge competitive edge.
Professionalism: Which includes everything from maintaining confidentiality, to hiring the very
best LMT and Demalogycal.
Individual Attention: Each client's experience will be tailored to his or her preference.
Repeat business/Recommendations: giving the kind of service that brings people back for regular
treatments, and encourages clients to recommend us to friends, and other health professionals to
recommend their clients.
Unique Treatments: We have the latest in techniques with the best products from around the
world.
Fantastic Location: Thai Nguyen city
II. THE EXTERNAL ASSESSMENT
Politics and Legal
Vietnam is managed on socialist principles. Vietnam has a stable political environment, this
creates opportunity for businesses to invest in long term in Vietnam. Furthermore, the
government decreases corporation tax from 22% to 20%. Nowadays, Vietnam is ready to
welcome the foreign investors with open arms. Specially, Thai Nguyen city had high population
and Thai Nguyen has abundant labor force resources (from industrial and universities).
The government has recently had a serious of adjustment measures to curb inflation, reduce
public debt, tighten government spending, reorient capital flows into manufacturing sector, spur
economic growth.
Antitrust law in Vietnam is constructed too slow, the matter leads to unhealthy competition.
Consumer law was published in 2011, however people don’t understand it well. They can’t
protect themselves when getting conflict.
Employment law was completed in 2013 with a lot of new clauses, which can protect the
employees and women
Economy
The index of inflation is about 4.77% in the first six months in this year as a signal that the target
of keeping inflation, macroeconomic stability of Vietnam was proved efficiently. It also is a
warning about the lower purchasing power of the economy.
Interest rate is reducing sharply, reaching the lowest point at 7% in recent years. However, it’s
just good for big enterprises having resiliency manufactory capacity, small and medium
enterprises meet with difficult approaching low interest capital.
Labor costs in Vietnam are not competitive because of the lack of worker qualifications. On one
hand, the salary of workers without qualifications is not lower than others country in Asian. On
the other hand, the shortage of worker qualifications remains a great challenge to companies.
Social
Vietnam has about 90.7 million people, the rate of population growth is 1.3 in a period from
2009 – 1014. According to estimate, Vietnam has been in the golden population period, it has
contributed nearly 15% of economic growth.
Vietnam education system includes pre-school, elementary school, secondary high, high school
and college. Despite achieving some educational achievements but Vietnam still has existing
problems, leading to poor quality of education.
Vietnamese has many bad habits that need to be changed.
Technology
Vietnam is a technologically backward country. Vietnam is now in the period of national
industrialization and modernization with a socialist orientation.
Nowadays, communication and internet in Vietnam are developing strongly. The government
takes interest in the environment to create favorable conditions for the activities of science,
technology making the best of its potential.
Environment
Vietnam is located in the tropical and temperate zone. It is characterized by a strong monsoon
influence, a considerable amount of sunny days, and with the high rate of rainfall and humidity.
The climate is divided into two distinguished two seasons: The cold season ( from November to
April ) and The hot season ( from May to October ). The most noticeable seasonal changes in
temperature are found in the Northern provinces, where a difference of 12 degrees is possible.
The macro market
Population
Thai Nguyen has a population of about 1,2 million with 26% living in urban area and about
90,000 students from 20 universities and colleges in Thai Nguyen.
Economy
The economic growth reached 9,1% of GDP, income of per head was 25,7 million in 2012. Thai
Nguyen still has some limitations, such as small scale economy, un-comprehensive facilities,
transportation infrastructure remaining difficulties, low value of industrial production.
Politics:
Thai Nguyen government launched policies to attract foreign investment and encourage domestic
investment.
Culture and society
Thai Nguyen is a multiform communication and also is an industrial province. Thus, most people
work in industrial zone, factory.
The micro market
Competitor
Opening a spa is popular business in Thai Nguyen city with small capital. There are a lot of
beauty spa within a radius of ten kilometers from the city center. Almost of these spa are near the
city center and universities, most of their customers are students and office workers. However,
there are of these spa is less than 100 square meters.
Customer
Rishe spa aims to target mass market, everyone can be our customers. They are students and
office workers who want to more beauty. We will maintain amount of loyal customers, it will be
the main profit.
Customers go to our spa can enjoy beauty services and advise from beauty consultants with nice
spa to relax. We’re provided best services with high technological and perfect cosmetic from
famous brand in the US.
Supplier
Demalogycal will be the main supplier for support our beauty service and cosmetics. We search
for supplier from the South of Vietnam to provide nice spa with high-quality for customers.
Summary of Opportunities and Threats
Opportunities
+ Broaden their target market: Sources we have exclusive product should continue to
expand more on the basis of provinces and cities across the country.
+ Merging, taking over or forming strategic alliance with other spa : we do not have a
reputation in the market so we will associate with a given number of other spa laying its
products to consumers across the country.
+ Continuously expanding: customers will be growing, so we will continue to invest in
expansion and upgrading of its customers better and better
Threats
+ Rising prices of cosmetic and service: large current import capacity cosmetic from
many other countries in the world (likely Korean brand, Japan etc) with price are cheaper,
so this will be a huge challenge for our cosmetic.
+ Increased competition from local spa and other spa chains: on the market has a lot of
beauty spa and has created a reputation in the market so we will face huge competition to
be able to stand firm in the market.
III. THE INTERNAL ASSESSMENT
A. Outputs and Outcomes
1. Output
Toal sale products and services per day: 20 customers per day.
Average pricesale products and services per day: 500.000 VND per day.
Average revenue: 10.000.000 VND per day.
2. Outcomes
Total expense per day 6.650.000 VND
Revenue per day 10.000.000 VND
Profit per day 3.350.000 VND
Profit per month 100.500.000 VND
Profit per year 1.206.000 VND
B. Resource Allocation
1. Human resource
2. Provide material source and training place
+ Beauty products: provided directly from Dermalogica USA.
+ The experts are trained in the USA and Vietnam.
C. Competitiveness of Physical Facilities
Models construction: include 3 floor, ground floor, first floor, second floor and terrace
(with pool on the terrace).
Home Spa near city center so traffics is favorable.
There are offices around so focus many staff.
Delivery full professional services, friendly staff, a relaxing atmosphere and unique style.
We pledge to give customer an experience that will leave them glowing both inside and
out.
D. Organizational Competencies and Capabilities
Organizational Capability:
focuses on internal processes and systems for meeting customer needs
creates organization-specific competencies that provide competitive advantage since they
are unique
CEO AND BOARD OF
DIRECTORS
ACCOUNT & FINANCE SALES & MARKETING ADMINISTER& HUMAN
RESOURCE PROCUREMENT &
PROJECT
ensures that employee skills and efforts are directed toward achieving organizational
goals and strategies
Organizational Capability enhances perceived customer value in three ways:
Responsiveness: the ability of the business to understand and meet customer needs more
quickly than competitors
Relationships: the ability of a business to develop enduring relationship between
customer and employee
Service quality: the ability of business to design, develop and deliver service that meets
or exceeds customer expectations.
E. Teams and Individuals
The interest in team building:
Well, look what teams in a business environment can achieve:
They can generate a wider range of ideas and innovation than individuals;
They are able to motivate themselves;
They can bounce ideas off each team member;
They often take more risks than individuals;
They have a range of personalities such as workers, thinkers, leaders who contributethe
right balance of skills necessary to achieve high performance;
They support each other and are not just task-orientated;
They can be a support mechanism which provide mentoring and allow others to grow in
self-confidence
If you have the individuals with the potential to create a high performing team, just imagine what they could achieve for your sales, productivity or bottom line!
However, it is important for people to recognize that there is a difference between team building and team development or team working. Team building involves bringing together new teams and giving them a sense of direction, a period of getting to know their colleagues, recognizing
skills and abilities. Team development is the next stage, which involves team working skills such as sharing ideas, co-operating, being open and supporting one another. A common mistake our
clients make when they first approach is to confuse the term team building with team working. We believe that if you cannot define the problem, then it is difficult to fix it.
F. Organizational Affiliations, Alliances and Linkages
+ Organizational Affiliation
Formal relationships established between otherwise independent organizations. These include
affiliation agreements, interlocking boards, common controls, hospital medical school affiliations, etc.
+ The implementation of strategic alliances
Alliance implementation issues include the choice of governance mechanisms, enhancing trust and reciprocity between partners, managing the integration of project staffs from different to their collaboration.
+Proposals for funding under the Linkage Projects scheme must include at least one Partner Organization. The Partner Organization must make a contribution in cash and/or in kind to the
project. The combined Partner Organization contributions for a Proposal (i.e. the total of the cash and in-kind contributions of the Partner Organizations) must at least match the total funding
requested.
G. Management
1. Planning
a. Estimation of investment and spa business
We will construct estimates of Investment and Business includes total investment cost,
expected revenues and expenses in the spa and norms. This helped investors active in the
preparation of financial resources, cost control and predictable revenue spa. Thus will
avoid great losses in the industry and our business processes
b. Design
+ Functional areas: Both guests and staff feel comfortable in the spa. nice relaxing space
+ Color: harmonious, relaxed feeling.
+ Design attention in furniture design massage bed, chair foot massage, locker,... are not
giving customers ease of use of this furniture.
+ Electrical system, lighting, air conditioning, water, communications, machinery and
specialized equipment properly.
+ Create a wonderful spa, simple but luxurious and cost savings for investment.
2. Assessment
+ Collect data of feedback from customers.
Find out advantages and weaknesses.
Develop appropriate plans to develop spa
Training
Report summarizing each month in revenue and customer comments
3. Recognition :
Rishe spa try become a famous spa in Thai Nguyen
Expand scale of spa
4. Career development
Training for staffs
Buy new equipment
Reach 753 million VND for first years
H. Four function of management
1, Planning
The planning function of management controls all the planning that allows the organization
to run smoothly. Planning involves
Defining a goal:
+ Open biggest spa in Thai Nguyen.
+ Provide best services and product (Dematically) for customer.
Determining the most effective course of action needed to reach that goal.
+ Equipment.
+ Quality.
+ Price.
+ Attitude with customer
+ Advertising.
Typically, planning involves flexibility, as the planner must coordinate with all levels of
management and leadership in the organization.
2, Organizing
The organizing function of leadership controls the overall structure of the company. The
organizational structure is the foundation of a company; without this structure, the day-
to-day operation of the business becomes difficult and unsuccessful.
Organization of Rishe
3, Staffing
The staffing function of management controls all recruitment and personnel needs of the
organization. The main purpose of staffing is to hire the right people for the right jobs to
achieve the objectives of the organization. Staffing involves more than just recruitment;
staffing also encompasses training and development, performance appraisals, promotions and
transfers. Without the staffing function, the business would fail because the business would
not be properly staffed to meet its goals
4, Coordinating
The coordinating function of leadership controls all the organizing, planning and staffing
activities of the company and ensures all activities function together for the good of the
organization. Coordinating typically takes place in meetings and other planning sessions with
the department heads of the company to ensure all departments are on the same page in terms
of objectives and goals. Coordinating involves communication, supervision and direction by
management
5, Controlling
A CEO is responsible for running the spa by which he or she is employed. The Rishe spa
function more like resorts, where guests come to stay for several days, and may receive
treatments such as massages, body treatments, or hydrotherapy.
The duties of a spa CEO will be to provide excellent customer service and to supervise spa
employees. A spa manager may also be responsible for creating advertising. The manager
hires new employees, and terminating the employment of others if it becomes necessary.
Leader team
Manager Training Product
Support
service
Spa
sale and
marketing
Accounting Operations
Director
Leader team Leader team
The spa manager needs to answer questions if other employees cannot. The manager may
also need to be responsible for accounting at the spa, keeping track of the income and
balancing accounts every day, or every week, and making deposits at the bank.
The spa CEO responsible for keeping track of inventory at the salon, and ordering new
supplies as needed. Promoting the spa might be another large part of the job, but many
business outsource this work to advertising companies.
I. Organizational fit
There are so many parts to an organization’s fitness and performance; i.e. financial, sales,
customer service, production and/or services offered and then of course, the processes and the
right people to make it all come together.
Identifies strengths and "at risk" areas that need immediate attention for improvement. Give
immediate focus and attention to a problem area that needs to be fixed - and, a way to begin to
correct the identified issues. The Six Disciplines BPA is the quickest and most effective way for
you (and all of your Leadership team) to rate your organization's performance on the key
dimensions of:
- Leadership
-Strategic planning
-Customer focus
-Measurement, analysis and knowledge management
-Workforce focus
-Operations focus
-Results.
Summary of Strengths and Weaknesses
Strengths
Rishe is the first spa follows European style in Thai Nguyen. We are exclusive distributor of
Dermalogica cosmetic ( a famous cosmetic brand from USA with 80 years of experience in the
beauty industry) In addition, the Spa provides variety of unique services with high technology.
We have a staff of experienced professional skill. They will respond customers needs in the best.
Weaknesses
Rishe is a new brand, so we have no reputation. It is difficult to attract and build the trust with
customers.
The target market of Spa is focus on high-end customers, who are rich women with high income
so there is a limit market to develop.
IV – SWOT ANALYSIS
F. Strategic Options
Based on Strategic Options
Weaknesses
1. Limit the target market ( Rich women)
2. No reputation
1.1 Provide unique and professional services, luxury cosmetics.
1.2 Training staff in attitude and professional skill.
2.1 Advertise on social media, magazine…
2.2 Open events to introduce products and services. 2.3 Gift sample products and testing
services for customers
V. VISION, MISSION AND OUTCOMES
A. Vision:
Expecting the customer satisfaction: The vision of our spa as a brand is to ensure that our
customers get what they are looking for. Providing clients with only the best in cosmetic
and beauty services, we hope that every service in the spa will either meet or exceed your
expectations.
Employee expectation: Our personnel continue with their training and development in
terms of skill sets. Stay on time, be consistent, and provide the highest level of customer
A. Strengths B. Weaknesses
New brand
Exclusive distributor of Dermalogica
cosmetic
Unique services
Employees with professional skill
Limit the target market( Rich women)
No reputation
B. Opportunities D. Threats
Potential market
Convenience transportation
Exclusive products
Great name of Spa
Competition with long time spa.
New competitors
Incessantly change of beauty trend
service in the field of cosmetology. Customer shall be treated to a warm, friendly, and
helpful staff when visit the spa.
Position expectation: To be the most admired spa specializing in a high quality beauty
services and premium products in Thai Nguyen: There are numerous spa and beauty
salon around city center area. What makes our spa stand out? It is the quality of service
that we provide and the satisfaction that customers get out of the spa. Our spa focuses
skin and body care services. As a result of this sense of concentration, we are able to
come up with unique, personalized beauty services and high quality cosmetics for
customer.
B. Mission:
For customer: Brings a new insight into beauty service with professional and high quality
beauty solutions: Committed to delivery full professional services, friendly staff, a
relaxing atmosphere and unique style. We pledge to give customer an experience that will
leave them glowing both inside and out.Contribute to improve the spiritual value for
ladies
For employees: Spa providing a professional, friendly and fair working environment.
Employees are given opportunity to develop themselves. They are dedicated, recognized
and get preferential treatment.
For society: Joining hands to bring the beauty for society. Providing high quality services
and products. Contributing to promote the advancement of society.
C. Objectives, Key Result Areas (KRAs) and Performance Indicators (PIs)
OBJECTIVE KRA PI STRATEGY
1 Revenue Target sales monthly 300.000.000 VND
Per month. Offering promotion
2 Reach Target monthly customer. 600 customers per month Creating the unique style in products and services
3
Responsiveness
a, Responsibility with customer (comment, feedback
from customer)
b, Employees responsibility
c, Social responsibility
Organize a survey one time per
3 months.
Create favorable conditions of
work for labors in Thai Nguyen.
-Commitment to contribute to
the economic growth. -Contribute to increased social welfare.
-Protect customers -Protect the environment
Receive 90% feedback
of customers.
2,5-8 million VND
(salary per month)
40.000.000 each year for social welfare
-Connecting with customer -Evaluating the quality of products and services
Recruitment and training staff
Creating charity activities through sale of products and services
4 Recognition Get the loyal of customer to
services and product
90% customers satisfy
with service and product
Providing the good products and different
services for high-end customer.
5 Rating Get the international standard
in beauty industry
Get the 1st position in
Thai Nguyen city Promoting the image of the spa on social media
6 Return
a, Return on capital.
Target one year
200-250 millions VND
-reinvested to improve the equipment. -Pay for problems arising.
b, Return investment:
Target one year
3 billions VND.
-Expand spa size in Thai Nguyen.
-Open a new spa in Ha Noi capital.
D. Action Plan
STRATEGY PROGRAM ACTIVITIES TASK
RESOURCES
AMOUNT RESPONSIBLE
PERSON TIMEFRAME
1. Offering promotion
Customer
attractive program
Make some
events and promotion sales.
-Invite the target
customer -leaflet and
banner
40,000,000 VND for an event and
promotion program
Marketing manager
Special days of
year (valentine, 8.3. Christmas…)
Organize“ Gold time- shock
price”
-Announcement -Conduct
matching activity
Gift a preferential card at 500.000
VND for each service and product
Sale manager
From 8am to 9am
on each Saturday
2 , Providing the good products and
services for high-end
customer.
Product and service
customer matching
program
Gift the sample
cosmetic to target customer
-Identify suppliers -Buy cosmetic
6 millions for 100 cosmetics
Marketing
manager/sales manager
One time per 4
months Free using services for 30
first customers since opening.
-Identify amount
of customer and time for activity
15 millions for free
services
3,Recruitment
and training staff
Recruitmentday
Recruit employees
-Identify vacancy
-Announcement recruitment information
80 million VND for
hiring professors
Human resource manager
1st week of October 2014.
Training
program
Open short-training courses.
-Identify weak skills of staff
-Invite professors have many experiences in
beauty sector for training.
40 million VND for
equipment and others expensive.
1st week of
December 2014
Marketing Program
Special Marketing program: ‘’ Promotional Gold Sunday’’
The reason: Attract customers and advertise brand for Opening in 24/12/2014
Target Market:
- Family
- Group
- Organization
Customer needs: want to rest and relax with family, friends and colleagues.
Price and packages of the service:
- Package 1: 7am-9am and 3pm – 5pm on every Sunday discount 20% for customers from 4 people or more, 30% for
customers from 8 people or more.
- Package 2: The different hours discount 10% for everyone.
4,Promoting the image of the spa on social media
Advertising program
Advertise on:
-Facebook -Youtube
-Own website of spa
- Create account on Facebook and
Youtube - Hire designer to
build the website - Define informations to
show on own website
-10 millions for hiring and other
expenses
Marketing manager
During business
- Table of Price:
Services General price
(VND)
Package 1(VND) Package 2
(VND) Over 4 people Over 8 people
Swedish Style 300.000 240.000 210.000 270.000
Hot Stone 350.000 280.000 245.000 310.000
Whole body Reflexology
300.000 240.000 210.000 270.000
Foot Massage 100.000 80.000 70.000 90.000
Scalp Massage 150.000 120.000 105.000 130.000
Aroma therapy 75.000 60.000 52.500 67.500
Deep Cleansing
Facial
200.000 160.000 140.000 180.000
Anti Ageing Facial 200.000 160.000 140.000 180.000
The Marketing activities:
- Leaflet drops (distribute in communities, agencies and other populated areas)
- Advertising on magazines (on famous magazines such as: ‘’Đẹp+… ‘’and ‘’Tiếp thị và gia đình’’)
- Own company’s website (show detail information of the promotional program. Videos and images of company’s services)
- Posters, catalogs and banners (show some pictures of company, main services and information about ‘’Promotional Gold
Sunday’’)
The main objectives:
+ Attract customers (We spend about 20% of service’s price to attract at least 3 clients, 30% of service’s price to attract at least
7 clients)
+ Increase sales (revenue achieves 200% compared to weekdays)
Additional results:
- Build the name and reputation
- Exploration and market assessment
- Keep in touch with customers
- Expand company’s business network.
Operating Program
List all the materials required to make this happen:
- Design attractive cover
- Print and bind high quality copy
- Own company’s website
Other resources:
- Time: the program is prepared before 1 week and will be implemented on the first Sunday of the opening week. (Intent: on
Sunday of the first 2 weeks, depending on the requirement and reaction of customers)
- Money: about 2.000.000VND (estimate: 600.000VND for advertising on magazines, 50.000VND for 1000 leaflet drops,
400.000VND for distributing leaflets, the remaining funds for banners, posters and things arise. Designers and staff are paid
monthly)
- People:
+ Designers (Design cover, posters, catalogs, banners…)
+ Customer Care Staff on company’s website (answer all customer’s questions about services and promotions of the
company)
+ Direct Care Staff
+ 2 distributors (distribute leaflets).
- Summary and evaluation Docket on the end of day.
Human resource program:
Training and development human resource:
+ Organizing training courses to professional development for our staffs.
+ Given rewards for best staff
+ Encourage and provide opportunities for staff development
Reorganizing work units to be more efficient.
Leadership: Strengthen leadership capability to encourage high levels of performance and productivity that sustain excellence.
Efficiency and effectiveness: Achieve financial efficiency and increase operational effectiveness of our spa.
FINANCIAL STATEMENT
A. Statement of Financial Position
Current assets
350,000$
50,000
1,000
9,600
4,200
32,298
700
447,798
Non-current assets
Furniture and Fixtures 60,000
Accum. Depreciation - Furniture and Fixtures (6000)
Total non-current assets 54000
TOTAL ASSETS 501,798
Current liabilities
Accounts Payable 109,800
Interest payable 800
Wages payable 40,800
Total liabilities 151,400
OWNER'S EQUITY
Capital 350,398
TOTAL LIABILITIES AND OWNER'S EQUITY 501,798
LIABILITIES
RISHE
Statement of Financial Position
As at December 31, 2015
ASSETS
Cash
Accounts Receivable
Office Supplies Unused
Prepaid Rent
Prepaid Advertising
Prepaid Insurance
Total Current assets
Prepaid materials and bottles
B. Income statement
Revenue 120,000$
Operating expenses:
40,800
500
7,500
1,200
4,200
32,298
9,600
700
6,000
800
103,598
16,402
3,280
13,122
Office supplies expense
Advertising expense
Rent expense
NET INCOME
Internet expense
Depreciation expense - furniture and fixtures
Interest expense
Total expense:
GROSS INCOME:
Less: Income tax(20%)
Insurance expense
Materials
RISHE
Income statement
For the year ended December 31, 2015
Less: Salaries and wages expense
Utilities Expense
C. Statement of Changes in Owner's Equity
350,398$
13,122
(85,550)
277,970Owner, Capital, December 31, 2015
Owner, Capital, January 1, 2015
Profit for the period
RISHE
Statement of Changes in Owner's Equity
For the year ended December 31, 2015
Owner, Drawing
D. Cash Flow Statement
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receive from customers 100,000
Cash paid for
Suppliers and util ities expenses -8,000
Wage expenses -40,800
Interest -800
Others expenses -25700
Income taxes -8,940
Net cash from operating activities 15,760
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of materials -32,298
Purchase of funiture and fixtures -60,000
Net cash used in investing activities -92,298
CASH FLOWS FROM FINACING ACTIVITIES
Investment by owner 350,398
Drawing by owner -85,550
Net cash used in finacing activities 264,848
Net increase in cash held 188,310
Cash at beginning of year 350,000
Cash at end of year 538,310
RISHE spa
Cash Flow StatementFor the year ended 31,Dec 2015
E. Computation: Payback Period of money (PP), Net Present Value (NPV), Accounting Rate on Return
(ARR), Return on Investment (ROI) and Return on Equity (ROE)
PP (Payback Period of money)
13,122$
6,000
19,122
Net cost of investmentPP = ------------------------------------------
Annual net cash inflows
60,000
PP = ------------------------------------------
19,122
PP = 3.13775 years
or 3 years and 2 months
Net income
Add: depreciation
Net cash inflow
NPV ( Net Present Value)
Present value of cash inflows:
Cash PV of
Year Inflows PVF Cash Inflows
1 160,000 0.90017 144,027
2 182,500 0.81031 147,881
3 208,375 0.72942 151,992
4 238,132 0.65660 156,357
5 272,351 0.59105 160,973
Total present value of cash inflows 761,231
Less: Net investment 410,398
Net Present value 350,833
ARR (Accounting Rate on Return)
Net income
ARR = ----------------------------------------
Investment
13,122
= ----------------------------------------
410,000
= 3.20%
ROI (Return on Investment)
Net income
ROI = ----------------------------------------
Total expense
13,122
= ----------------------------------------
103,598
= 12.67%
ROE ( Return on Equity)
Net income
ROE = ----------------------------------------
Shareholder'equity
13,122
= ----------------------------------------
281,250
= 4.67%
