s

Corporate Financial Reporting

Topic:
“FORKS AND KNIFE”

SUBMITTED TO,

Prof. Zubair

SUBMITTED BY,

ZAIN ALI 0038

ADNAN KHALID 0039

UMER JAVED 0040

UMAIR JAVED 0041

2018

UNIVERSITY OF CENTRAL PUNJAB, FSD

FORKS N KNIVES(CRISP AND GRILL)

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Contents
Fast Food Industry. ......................................................................................................................... 6

Trends. ........................................................................................................................................ 7

Ingredient transparency. .......................................................................................................... 7

Bold flavors. ............................................................................................................................ 7

Stabilized food costs. .............................................................................................................. 8

Halal. ....................................................................................................................................... 8

Growth of industry. ..................................................................................................................... 8

Fast Food industry in Pakistan. ................................................................................................... 9

Growth of fast food industry in Pakistan. ............................................................................... 9

Frequency of fast food consumption....................................................................................... 9

Forks ‘N’ Knives........................................................................................................................... 10

History....................................................................................................................................... 10

SWOT analysis of forks n knives. ............................................................................................ 11

STRENGTHS ....................................................................................................................... 11

OPPORTUNITIES ................................................................................................................ 11

WEAKNESSES .................................................................................................................... 11

THREATS............................................................................................................................. 11

VISION ..................................................................................................................................... 11

MISSION .................................................................................................................................. 12

SLOGAN .................................................................................................................................. 12

Competitors ............................................................................................................................... 12

Competitive Advantage ............................................................................................................ 12

PRODUCTS.............................................................................................................................. 12

Pizza ...................................................................................................................................... 12

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 Pasta ...................................................................................................................................... 13

Steaks .................................................................................................................................... 13

Appetizers ............................................................................................................................. 13

Burgers and sandwiches ........................................................................................................ 14

Desserts ................................................................................................................................. 14

Sides order ............................................................................................................................ 14

Fried ...................................................................................................................................... 14

Services ..................................................................................................................................... 14

Dining ................................................................................................................................... 14

Takeaway .............................................................................................................................. 15

Delivery................................................................................................................................. 15

Business functions .................................................................................................................... 15

Production and Quality ......................................................................................................... 15

Marketing Functions ............................................................................................................. 16

Human Resource Management ............................................................................................. 16

Management Information System ......................................................................................... 17

Research and Development................................................................................................... 17

Customer Relation ................................................................................................................ 17

Public Relation ...................................................................................................................... 17

Sales ...................................................................................................................................... 18

GAPS ........................................................................................................................................ 18

OPPORTUNITIES .................................................................................................................... 18

Financial history............................................................................................................................ 18

Financial Reports: ..................................................................................................................... 18

What They Mean & How to Read Them .............................................................................. 18

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Ratios ............................................................................................................................................ 22

Compliance to accounting standards ISA 1 .................................................................................. 23

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Fast Food Industry.

A fast food restaurant, also known as a quick service restaurant (QSR) within the industry, is a
specific type of restaurant characterized both by its fast food cuisine and by minimal table
service. Food served in fast food restaurants typically caters to a "meat-sweet diet" and is offered
from a limited menu; is cooked in bulk in advance and kept hot; is finished and packaged to
order; and is usually available ready to take away, though seating may be provided. Fast food
restaurants are typically part of a restaurant chain or franchise operation, which provisions
standardized ingredients and/or partially prepared foods and supplies to each restaurant through
controlled supply channels.

The term "fast food" was recognized in a dictionary by Merriam–Webster in 1951.

Arguably, the first fast food restaurants originated in the United States with A&W in 1919
and White Castle in 1921.

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Variations on the fast food restaurant concept include fast casual restaurants and catering trucks.
Fast casual restaurants have higher sit-in ratios, and customers can sit and have their orders
brought to them. Catering trucks often park just outside worksites and are popular with factory
workers.

Trends.

Ingredient transparency.

People increasingly want to know about the ingredients and their origins in food. While that has
been the case for a few years, 2014 should see the trend garner more mainstream attention.

1. “Customers are more interested in what they’re eating and where it comes from,”
2. “Making it real is very important,”
3. “Customers’ definition of value is fresh ingredients, quality food, and good-tasting food
at reasonable prices. But fresh ingredients is No. 1
4. People are willing to pay a premium for better ingredients, which are increasingly
available.
5. “Farmers know they can produce more and deliver more quality items,”

Bold flavors.

Some experts say Asian flavors will be the top new taste trend this year. Others point to cuisine
based on Latin and South American cooking. There are also expectations that Mediterranean or
regional American fare will be trendsetters.

1. While there are good cases to be made for each, it seems the big trend behind all of them
is PAKISTANS’ growing desire for new, exciting, and bold flavors, no matter their
cultural origin.
2. “There has been Mexican, Chinese, and Italian in PAKISTAN for years, but now we see
niches or regions,”
3. “CUSTOMERS are willing to be more adventurous.”
4. “People love flavors that take them somewhere,”

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 5. “Young people have grown up with various ethnic styles, but everyone is looking for new
things.”

Stabilized food costs.

The food cost will depend on the ingredients used to make them the quality and quantity both
matter as the prices of certain items like beef and fruits and some herbs and veggies can climb
the top of the charts there are also those which remain consistent but to provide quality meal at
reasonable prices is the main point of concern for the restaurants at the time.

Halal.

Now people are conscious about what they are eating. As a Muslim country people expect from
restaurants to give Halal food, in order to satisfy customer most the of fast food restaurants have
displayed the certificate showing that food is Halal

Growth of industry.

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Fast Food industry in Pakistan.

It’s the 2 largest industries in Pakistan. Accounts for 27% of its value-added production & 16%
of the total employment in manufacturing sector. Pakistan holds eighth largest market when it
comes to fast food business. More than 1000 large scale food processing enterprise in Pakistan.

Pakistan’s fast food sector is changing significantly because of shifts in life styles and eating
habits. According to survey it has been become quite clear that consumer spend 42% of one’s
income on food.

On an average calculation the fast food business in Pakistan and trend of eating habits of the
locals in the country is increasing almost 21% annually which means the growth of the fast food
business in Pakistan is more than 20% on annual basis which makes it as one of the fastest
growing businesses.

Growth of fast food industry in Pakistan.

Instead of increasing inflation in Pakistan, fast food industry is earning more profits. There is
continuous increase in revenues.

Frequency of fast food consumption.

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Forks ‘N’ Knives.

History.

Forks n Knives is one of the Faisalabad restaurant chain, known for Pizza and other side dishes.
It was founded in Nov 25, 2011 by Owner Yasir Malik at Doburj Mall, Jaranwala Road,
Faisalabad. The second branch name as Forks n Knives Crisp N Grill was opened in Dec 7, 2014
by the Co Owner Rana Munir Haider at Susan Road, Faisalabad.

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The first branch was named as Forks n Knives (Pizza kitchen). In second branch, grill items are
also added that’s why named as Forks n Knives (Crisp n Grill).In this branch, pizza size are
changed and some grill items are also added. Some menu items are changed.

SWOT analysis of forks n knives.

STRENGTHS

1. Customer satisfaction
2. Hygiene
3. Excellent service
4. Affordable Price
5. Strong relation with public

OPPORTUNITIES

1. Produce attractive offers

2. Developing food chain

WEAKNESSES

1. Increased customer demand

2. Lack of parking facilities
3. Inadequate Advertisements

THREATS

1. No Online counters for order

2. Low price than competitors
3. Increase in raw material prices may affect the financials

VISION

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To be the unparalleled leader in the distribution of food, providing the highest standards for
quality, consistency, sustainability
and value-added services to our
customers.

MISSION

To deliver best quality products to

consumers who can rely on us for a
long time.

SLOGAN

“Love at first bite.”

Their slogan describes all that once

you will have it you will start loving it

Competitors

Forks n knives competitor is Pizza hut. People who are brand conscious prefer pizza hut .But
those who want taste they prefer forks n knives.

Competitive Advantage

They are providing best quality. Their topping and cheese attracts the customers. They have huge
market share.

Because of their quality now they have more market share as compared to pizza hut. They have
maintained their quality. They have same dough and topping since they started.

PRODUCTS

Pizza

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They are specialized in pizza. People
prefer their pizzas over all other
things. They have variety of pizzas.
Their Peri Peri pizza is the new
launch which is still not offered by
their competitor. They give the
options of extra toppings as well.
Customer can choose from different
sizes of pizza .It can be regular, small,
large, jumbo, mega.

Pasta

It’s an Italian dish. Pasta is a noodle made from an unleavened dough of wheat flour mixed with
water or eggs and formed into sheets or various shapes, then cooked by boiling or baking. Forks
n knives deal in variety of delicious pastas

Steaks

A steak is a meat generally sliced perpendicular to the muscle fibers, potentially including a
bone. Usually there is beef steak but forks n knives also give chicken steak with baked potatoes
and vegetables.

Appetizers

Appetizers consist of different items

1. Fresh off the Grill

In fresh of the grill section they option different flavors’ like mild, lemon, hot, extra hot.

2. Soft drinks

All types of juices, drinks are available at forks n knives.

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Burgers and sandwiches

Forks n knives deal in two types of burgers and sandwiches. They have forks n knives special
burger and sandwich, chicken burger and sandwich.

Desserts

Forks n knives offer 2 types of desserts

Brownie sundae and jumbo treat

Sides order

Forks n knives side orders consist of French fries and rice.

Fried

Their fried portion contains nuggets, hot shots, burgers etc

They offered nuggets; hotshots with different prices depend upon the no of pieces customer
demand. In fried portion chicken which is used in different items is fried.

Services

3. Dining
4. Takeaway
5. Delivery

Dining

Forks n knives have good environment for its customers to have meal while sitting there. One of
their member welcome the people and arranged table according to number of persons. An other
person takes an order and also guides them that how much quantity is suitable for them. In 10-15
minutes customers get their order. During the meal of customers waiters visit them if they want
to have something more. Managers also visit some of the customers in order to get their
feedback.
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Takeaway

Forks n knives give the facility of takeaway to their customers. People who do not have much
time to eat there they can get their food through counters and can enjoy their meal at home.

Delivery

For the ease of people, forks n knives also give delivery services to their customer which is free
of cost. Person who want to have something from forks n knives just call them and can get their
order. Moreover they save the addresses of their customers so that customers may not have to
explain their address to delivery man every time. Once customer orders something his address is
saved. Just typing the number of customer address appears automatically.

Business functions

Production and Quality

Aroma, Flavor and Taste are those attractive things which appeal the customer. Forks and Knives
Crisp N Grill is the most liked place for the foodies. It is the new but the most visited place by
the youth and families because of its quality food. The rush hours are from 4 pm to 11 pm
whereas the rush days are Friday to Sunday. It doesn’t mean that the remaining days are not used
for visiting it Chef prepare the dough that has to be used within 6 hours for maintaining its
freshness. The kitchen is divided into four sections that are Pizza corner, Pasta corner, Beverages
corner and fries corner. The waiter informs the order of the customer at counter. With the use of
computer screen this order is reached to all four sections of the kitchen. It is beneficial way to
supply the order to the customer. Every employee strictly follows the rules of hygiene. After
every 30 minutes, the kitchen manager blows the whistle which means every employee has to
wash his hands. The floors and shelves are cleaned with the help of DETTOL. The utensils are
washed regularly for making them germ free. The kitchen temperature is 25 degree Celsius.
Every employee knows what to deliver at what time and the temperature. Nestle water is used for
cooking as well as for drinking.

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Marketing Functions

The strong advertisement means the strong business.

The company advertises for the first time when it was
opened in Doburj Mall for the first time. It is very
fortunate company which needs neither electronic nor
print media for its advertisement. The customers are so
loyal that they advertise it by their own. The customers
act as a spokesperson for the organization. They attract
more youth with the help of Face Book. In this way
they attract more customers.

The main focus is families as well as youth. For

keeping the people aware about their new deals by placing Banners at the most used roads. It is
the demand of every educational institution to use it for stalls.

Human Resource Management

Every organization needs employees for smooth running. For hiring of employees, the minimum
qualification of the workers should be intermediate. Whereas the minimum qualification of
managers should be M.A English and experience of 3-5 years. The employees are always
encouraged by their promotions. Every month, the employee of the month is decided through
proper monitoring of its work. He is rewarded with Branded Shirt, special meal and money. For
his appreciation his photograph is pasted on the notice board. All the Chefs must be well
educated related to the food. Employees should know about the food they are going to deliver.
Holiday package is given to the employees. They are divided into groups for the holidays and
work at the appropriate time. This holiday package doesn’t divert their attention from their main
task. In summer, they visit the swimming pool once in a week. All these incentives are for their
motivation. They are not given the holiday on weekend because these are the rush days. Their
holidays allotted to them in other week days. More than 70 employees are lending their helping
hands for making this organization the most visited place. Their duties are distributed in three
shifts. One shift is of approximately 9 hours. First shift starts from 9 am to 6 pm, the second shift

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from 2 pm to 11 pm and the third one is from 6 pm to 3 am. If anyone theft, the employee will be
fired. It’s not happen yet. If someone wants to leave by his own, he can go.

Management Information System

Information related to the business is sent to all the employees. This information is related to the
target which has to be achieved at any cost. Employees are informed to gain the target through e-
mails or text messages. Meetings within employees and branches are held to inform about the
deals and to get their opinions. Both the branches connect to each other through telephones and
e-mails.

Research and Development

The main focus of every organization is the customers. They should be satisfied at any cost. The
need of the customer is researched from the market. Before the customer’s demands his need
should be identified. As Peri Peri was only in Nandoos (Lahore). Keeping in view the demand of
the customer it is also introduced in Faisalabad by F&K Crisp N Grill. No doubt, the owner is
one but just for the innovation it is also offering grilled and crispy items. Even the sizes of Pizzas
also vary. There is manager who studies the customer, market and the competitors. He is MOM
(Manager of Operational Management). He gives new ideas, new strategies and new ways to
attract the customers.

Customer Relation

The views of the customers are always welcomed. They give their opinions on a card which is
collected in the comment box. The organization reads these comments on daily basis and it tries
its level best to follow the request of the customers.

Public Relation

The information related to the inventory is given to the suppliers. It purchases Cheese from USA.
The fresh vegetables are bought daily. There are some items which are purchased weekly, daily
and monthly. There is a contract with different suppliers for the supply of different material. A

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strong between customer and the organization exist. Government gives them the incentives for
the support. Bank gives them various offers for deposing of money.

Sales

The worth of the company is always known by the Target. The restaurant has set the target that is
3 lac per day. They do their best to avail it by providing best quality to the customers. This sales
target is only in normal days. When there is some occasion there sales increase too much. They
know how to deal with customers when there is some occasion.

GAPS

 No separate take away (drive thru)

 Only cash payments
 Manual attendance of employees
 No proper feedback section
 No proper security arrangements

OPPORTUNITIES

 Website for online orders and table reservations

 Use TIOS(Touch Interface Ordering System)
 Use Hyperactive Bob System

Financial history.

Financial Reports:

What They Mean & How to Read Them

The Income Statement and Balance Sheet are the two types of financial statement reports that
allow operators to pinpoint weaknesses and problem areas. The Income Statement and Balance
Sheet should be prepared and reviewed monthly.

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The Income Statement

The Income Statement shows how the restaurant performs over a period of time (i.e. a week,
month or year). It takes all restaurant expenses into account, from prepaid expenses to expenses
paid in the future. Overall, theIncome Statement tells the operator if the business is making a
profit. Fromthere, the operator can begin making changes in policy and implementing strategies
that will help the restaurant achieve its goals. Should new sales programs be implemented? Is
food cost in line with menu prices?Is the restaurant hitting its budgets? Can the owner(s) make
distributions to the partners? These are some of the key questions that need to be addressed. The
basic formula for an Income Statement is:

Sales - Cost of Goods Sold - Expenses = Profit/Loss

The Income Statement is everyone's favorite financial statement to review because it reveals the
nature of the restaurant's success. Restaurant income statements should be broken down into the
following categories:

 Sales
 Cost of Goods Sold
 Salaries
 Employee Benefits
 Controllable
 Occupancy
 General and Administrative
 Depreciation
 Interest
 Other Income

If sales and expenses are broken down into specific categories, the operator can easily compare
and analyze his or her restaurant to industry standard percentages.

 Cost of Goods 39 %
 Payroll 15 %
 Benefits 4%

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  Operating/Controllable expenses 13%
 General and administrative expenses 5%
 Profit is at approximately 24-30% of sales

As explained above forks n knives has a daily sales target of 3.5 lacks which they achieve in
normal days and as in the event days such as eid or shabrat their sales target is increased to 12 lac
per day.

This statement signifies the workings and the sales of the restaurant

Balance sheet of the company is as follows

balance sheet
assets
2015 2016
current assets
cash 861812 1362825
account recievable 357655 748218
losses and reserve of baddebts 25000 40000

minimum inventory 1300000 900000

prepaid expences 0 0
notes recievable 0 0

total current assets 2494467 2971043

fixed assets
furniture and fixtures 2500000 2700000
less: accumulated depreciatiom 300000 800000

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equipment and machinery 6500000 8500000
less: accumulated depreciation 700000 850000

total fixed assets 8000000 9550000

other assets
good will 0 0
total other assets 0 0

total assets 10494467 12521043

liablities and capital

2015 2016
current liabilities
accoiunt payables 145000 165000
sales taxes @ 16 % 17280000 19312000
income tax payables
wages payables
unearned revenues

total current liabilities 17425000 19477000

longterm liabilities
long term notes 0 0
mortgage pyables 0 0
total long term liabilities 0 0

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total libilities 17425000 19477000

capital
owners equity 12500000 11500000
further invested 1000000

total liability and capital 30925000 30977000

The restaurants expense structure is as follows

Ratios

 Current Ratio = Current Assets (CA)/ Current Liabilities (CL)

Current ratio should be 1:1 or greater. Forks n knives ratio is .9:1. This ratio measures the current
health of the business and indicates short-term cash flow. To get a better sense of its liquidity and
cash flow constraints, the quick ratio is a better indicator.

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2) Quick Ratio = Current Assets-Inventory/ Current Liabilities

Ratio is .2:1. This ratio indicates the liquidity of the business and should be .7:1 or better. Fnk
may have too much money tied up in inventory. This could affect cash flow as well as
purchasing power with vendors.

3) Working Capital Ratio = Total Assets/ Total Liabilities

Working capital ratio should be 1:1 or greater. Forks n knives ratio is 1.55:1. Long-term cash
flow does not appear to be a problem.

4) Debt to Equity Ratio = Total Debt/ Total Equity

Ratio is 1.8:1. This ratio determines if a business is undercapitalized. Fnk may be slightly over-
leveraged.

5) AP (Accounts Payable) to Sales Ratio

AP to Sales should be 50% of sales or less. This ratio measures how current a restaurant is with
vendors and indicates future cash flow. Forks n knives ratio is 68%. This is a high ratio and may
indicate short-term cash flow concerns.

Compliance to accounting standards ISA 1

Fnk follows the following compliances to the ISA 1

 Going concern
 Accrual base of accounting
 Materiality and aggregation
 Reporting period
 Current and non-current assets classifications
 Change in equity
 Disclosure notes

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