glamrend report 4 áo dài cách tân business plan

13 Table 9: Revenue from commissions from photography and makeup partners.... The total insurance cost within 5 years that Glamrend must pay is estimated to be 912,362,043VND.. Inventory

FPT University Business Department

Bachelor of Business Administration Thesis

GLAMREND

Tran Van Khanh

Nguyen Le Quynh Anh

Nguyen Cong Loc

Nguyen Ba Hai Dang

HS140379 DS130050 DS150039 DS150207

Supervisor

MS Duong Thi My Hoang

MS Duong Thi Thanh Hang

FPT University Danang, 2023

Table Of Contents

Chapter 4: Financial Analysis 4

1 Startup Expenses and Capitalization 4

1.1 Initial cost 4

1.2 Operating expenses 5

1.2.1 Fixed cost 6

1.2.2 Variable cost 7

1.2.3 Total operating expenses 10

1.3 Capital structure 10

2 Revenue Stream 11

2.1 Revenue from modernized Ao Dai rental 11

2.2 Revenue from accessories rental 12

2.3 Revenue from selling new modernized Ao Dai 13

2.4 Revenue from commissions from photography and makeup partners 13

3 Financial Statement Analysis 14

3.1 Income statement 14

3.2 Statement of owner’s equity 15

3.3 Balance sheet 16

3.4 Statement of cash flow 17

4 Capital Budgeting Decisions 19

4.1 NPV, IRR and Discounted payback period analysis 19

4.2 Financial ratio analysis 20

LIST OF TABLES Table 1: Initial Cost 4

Table 2: Fixed Cost 7

Table 3: Variable Cost 9

Table 4: Total operating expenses 10

Table 5: Capital Structure 11

Table 6: Revenue from modernized Ao Dai rental 12

Table 7: Revenue from accessories rental 12

Table 8: Revenue from Selling new modernized Ao Dai 13

Table 9: Revenue from commissions from photography and makeup partners 14

Table 10: Income Statement 15

Table 11: Statement of owner’s equity 16

Table 12: Balance Sheet 17

Table 13: Statement of cash flow 18

Table 14: NPV, IRR and Discounted payback period analysis 20

Table 15: Financial ratio analysis 21

LIST OF FIGURES

Figure 1: Operating Expenses 6 Figure 2: Net profit margin, return of asset and return of equity 21

Chapter 4: Financial Analysis

1 Startup Expenses and Capitalization

1.1 Initial cost

Glamrend estimates the initial costs for its store, including 7 main elements: legal procedures, market research, equipment and official furniture costs, brand Identity, website creation, marketing expenses on opening day, and renovation and reconstruction costs In total, this cost is 97,583,000 VND, preparing the business plan as detailed in the table below

Table 1: Initial Cost

Initial Cost

(VNĐ)

Total (VNĐ)

Registering the Business License 1 1.500.000 1.500.000

Cleaning stuff 1 Item 1.800.000 1.800.000

6 Marketing Expenses on Opening Day 205 2.171.500 3.640.000

Facebook, Instagram, TikTok Ads 2 day 1.000.000 2.000.000 Store decoration (Balloons, Flowers) 1 Package 1.000.000 1.000.000 Discount Voucher (Paper Card) 200 Unit 1.500 300.000

7 Renovation and Reconstruction 2 1.190.000 1.190.000

Reconstruction costs (Wallpaper, new

Figure 1: Operating Expenses

Business license tax

The cost of business license tax per year is 2,000,000 VND, so after 5 years, the store will pay a total of 10,000,000 VND

Depreciation expenses

The formula Glamrend uses to calculate depreciation expenses is the straight-line depreciation method: Annual depreciation expense = (Cost of asset - Salvage value)/Useful life of the asset Thus, the store's annual depreciation expenses are 6,736,800 VND per year, and the total depreciation expenses after 5 years are 33,684,000 VND

In summary, these are the fixed costs of the Glamrend store over five years

Table 2: Fixed Cost

Fixed Cost

(VND)

Year 2 (VND)

Year 3 (VND)

Year 4 (VND)

Year 5 (VND)

Variable costs are costs that must be paid directly into the process of creating a product, such as raw materials, worker costs, packaging, and production costs Variable costs will change when the scale production output changes

Utilities expense

Glamrend store utility expense includes electricity, Wi-Fi, and water Specifically, Glamrend uses Viettel's Wi-Fi service, SUN2 package, with an initial price of 229,000 VND/month and increasing by 10% each year As for electricity, the store consumes an average of 120kwh per month, with prices of 1,678 VND for the first 50kWh, 1,734 VND for the next 50kWh, and 2,014 VND for the last 20kWh As for water costs, the store uses an average of 10m3 of water per month at a cost of 11,000 VND/1m3 In total, utilities expense for 5 years is 48,002,774 VND

recruited 1 sales staff with a basic salary of 6,655,000 VND plus 3% based on sales volume Total salary costs within 5 years are 4,243,544,384 VND

Insurances

Glamrend store plans to pay three types of insurance for employees, including health insurance, social insurance and unemployment insurance The payment level will depend on the employee's salary, with the corresponding rate being 17.5% for social insurance, 3% for health insurance, and 1% for unemployment insurance The total insurance cost within 5 years that Glamrend must pay is estimated to be 912,362,043VND

Marketing expenses

Glamrend's marketing costs are divided into three phases Phase 1, called Brand Introduction, has a total cost of 51,250,000 VND in the first quarter Phase 2, called Attention Explosion, has a total cost of 27,600,000 VND in the second and third quarters Finally, Phase 3 is called Create Trust and Love products and brand, with a total cost of 18,800,000 VND in the fourth quarter Therefore, in the first year, Glamrend will have to pay a total of 97,650,000 VND for marketing activities, and this cost will increase by 10% each year The total expected cost after 5 years is 596,163,015 VND

Inventory cost

Based on the number of modernized Ao Dai and accessories for rent each day, Glamrend estimates the amount of inventory that needs to be imported Combining the formula Inventory costs = Invoice cost + Insurance + Storage + Freight + Import Duties - Discounts and Allowances, Glamrend calculates The total inventory cost for 5 years is 3,953,710,248 VND

Provision for devaluation of inventories

It is the risk cost of inventory when damaged, and this cost is for the purpose of preserving modernized Ao Dai and accessories Glamrend estimates this cost will be 5% of inventory costs The total provision for inventory devaluation in 5 years is 197,685,512 VND Packaging materials

Based on the number of customers who come to rent modernized Ao Dai at the store, Glamrend will buy the appropriate amount of packaging With Cockroaches costing 1,400 VND per piece, the total cost of purchasing packaging is 342,329,872VND within 5 years Store maintenance cost

Store maintenance costs are the costs of maintaining facilities and include costs of repairing, maintaining, and upgrading facilities such as shelves, windows, doors, lights, and air conditioning The estimated cost for the first year is 2,000,000 VND and increases by 10% each year, the total cost after 5 years Glamrend must pay is 12,210,200 VND

Website maintenance cost

It is the cost to optimize the website, ensure user and Google friendliness, protect data safety, improve page loading speed, maintain regular content updates, and optimize SEO to reach the top position on Google Since this is the first stage of establishing a website, there are many things to improve, so the cost in the first year is 15,000,000 VND, while the cost from year 2 to year 5 reduces to 10,000,000 VND per year The total cost within 5 years is 55,000,000 VND

Table 3: Variable Cost Variable Cost

1.2.3 Total operating expenses

After determining fixed and variable costs, Glamrend can deduce that the total cost of maintaining the store's business operations remains sustainable year after year Below is a table of total operating expenses for 5 years

Table 4: Total operating expenses

Operating Expenses

Fixed Cost 140.736.800 140.736.800 140.736.800 140.736.800 140.736.800 Variable Cost1.116.739.4411.463.055.1151.988.505.8182.547.125.7623.245.581.912Total 1.257.476.24 1.603.791.9152.129.242.6182.687.862.5623.386.318.712

1.3 Capital structure

Glamrend, founded by four members, started with an investment capital of 1,400,000,000 VND In the following years, Glamrend continuously received additional investments from the original members, with amounts of 100,000,000 VND, 100,000,000 VND, 120,000,000 VND and 150,000,000 VND from years 2 to 5 In total, during the 5 years, Glamrend raised

a total of 1,820,000,000 VND Below is a table showing Glamrend's capital structure

Table 5: Capital Structure

2.1 Revenue from modernized Ao Dai rental

Glamrend estimates that it will rent 18 modernized Ao Dai per day in the first year, bringing

in an estimated revenue of 4,088,701 VND per day Expected monthly revenue will reach 122,661,042 VND, and annual revenue will reach 1,471,932,500 VND The number of Ao Dai for rent is expected to increase each year, and the rental price will also increase by 6% each year due to the influence of currency price fluctuations Below is a detailed table of the revenue of the modern Ao Dai store in 5 years

Table 6: Revenue from modernized Ao Dai rental

Revenue from modernized Ao Dai rental Unit: VND

Average revenue per month

Average revenue per year

Growth Rate Year 1 18 232.423 4.088.701 122.661.042 1.471.932.500Year 2 25 268.789 6.795.881 203.876.425 2.446.517.100 66,21% Year 3 38 290.458 10.984.953 329.548.603 3.954.583.234 61,64% Year 4 44 313.085 13.757.459 412.723.767 4.952.685.204 25,24% Year 5 60 318.741 19.251.941 577.558.223 6.930.698.672 39,94%

2.2 Revenue from accessories rental

Glamrend estimates that it will rent out 9 accessories per day in the first year, generating an estimated revenue of 338,944 VND per day Expected monthly revenue will reach 10,168,333 VND, and annual revenue will reach 122,020,000 VND The number of rental accessories is expected to increase each year, and the rental price will also increase by 6% each year due to currency price fluctuations Below is a detailed table of the store's accessory revenue over the past 5 years

Table 7: Revenue from accessories rental

Revenue from accessories rental Unit: VND

Type of

Product rental Unit

per day

Average price per

product

Average revenue per day

Average revenue per month

Average revenue per year

Growth Rate Year 1 9 38.096 338.944 10.168.333 122.020.000 Year 2 13 42.026 561.977 16.859.300 202.311.600 65,80%

Year 3 19 51.468 964.164 28.924.917 347.099.000 71,57%

Year 4 29 50.381 1.479.089 44.372.667 532.472.000 53,41%

Year 5 44 49.359 2.196.082 65.882.458 790.589.500 48,48%

2.3 Revenue from selling new modernized Ao Dai

In addition to income from renting modernized Ao Dai and accessories, Glamrend also has other sources of income from selling new modernized Ao Dai to customers in need Often, when customers are interested in a specific Ao Dai model, they are willing to pay to own that shirt However, the store only sells new modernized Ao Dai to ensure that rental modernized Ao Dai still has a variety of designs for customers

Glamrend is expected to sell about 9 Ao Dai on average each month, generating an average revenue of 11,074,219 VND in the first year The total revenue for the first year is anticipated

to be 132,890,625 VND Details of revenue from years 2 to 5 are outlined in the table below

Table 8: Revenue from Selling new modernized Ao Dai

Revenue from Selling new modernized Ao Dai Unit: VND

2.4 Revenue from commissions from photography and makeup partners

Glamend has worked closely with professional partners in makeup and photography to provide comprehensive services for customers who need to rent modernized Ao Dai and receive 5% commission fees It helps provide a more perfect experience while also creating opportunities for customers to satisfy both their makeup and photography needs in a polite and luxurious setting

Glamrend estimates that there will be 3 customers using makeup or photography services every day in the first year, bringing in an estimated revenue of 125,000 VND per day Expected monthly revenue will reach 3,750,000 VND, and annual revenue will reach

increase each year, and prices will also increase by 6% each year due to the impact of currency fluctuations Below is a detailed table of the store's makeup and photography revenue over the past 5 years

Table 9: Revenue from commissions from photography and makeup partners

Revenue from commissions from photography and makeup

product

Average revenue perday

Average revenue per month

Average revenue per year

Growth Rate

be subject to trade discounts, with a discount rate of 2%

Therefore, the store's revenue after applying product discounts from year 1 to year 5 is 1,747,037,321 VND, 2,853,666,977 VND, 4,583,084,122 VND, 5,878,847,420 VND and 8,258,697,299 VND

After deducting the cost of goods sold and the store's operating expenses, the net income from operations from year 1 to year 5 is 48,124,998 VND, 543,639,049 VND, 1,353,445,563 VND, 1,768,809,308 VND, and 2,964,866,042 VND

In addition, the store also has other revenue from the liquidation of modernized Ao Dai, with liquidation revenue equal to 30% of the value of imported goods In general, through the income statement, the store's profits are growing steadily

Table 10: Income Statement

Income Statement

Year 1 (VND) Year 2 (VND) Year 3 (VND) Year 4 (VND) Year 5 (VND) Sale 1.771.843.125 2.894.185.575 4.648.158.339 5.962.319.899 8.375.960.749Less: Sale

Discounts 24.805.804 40.518.598 65.074.217 83.472.479 117.263.450 Net sale 1.747.037.321 2.853.666.977 4.583.084.122 5.878.847.420 8.258.697.299Cost of goods

sold 441.436.083 706.236.013 1.100.395.941 1.422.175.551 1.907.512.545Gross profit

from sales 1.305.601.238 2.147.430.964 3.482.688.181 4.456.671.869 6.351.184.754Operating

expenses 1.257.476.241 1.603.791.915 2.129.242.618 2.687.862.562 3.386.318.712Selling,

general &

administrative

expenses

(SG&A) 1.257.476.241 1.603.791.915 2.129.242.618 2.687.862.562 3.386.318.712Net income

from

operations 48.124.998 543.639.049 1.353.445.563 1.768.809.308 2.964.866.042Other

Revenue 105.210.000 178.525.200 289.989.924 375.295.097 509.030.710 Net income 153.334.998 722.164.249 1.643.435.487 2.144.104.404 3.473.896.752

3.2 Statement of owner’s equity

Glamrend's equity statement shows equity movements as influenced by the owner's capital investments, net operating income, and owner withdrawals

Table : Statement of owner’s equity11

Statement of owner's equity

Item Year 1 (VND) Year 2 (VND) Year 3 (VND) Year 4 (VND) Year 5 (VND) Investment

by owner 1.400.000.000 1.653.334.998 2.475.499.247 4.238.934.733 6.533.039.138 Net Income 153.334.998 722.164.249 1.643.435.487 2.144.104.404 3.473.896.752 Capital 1.553.334.998 2.375.499.247 4.118.934.733 6.383.039.138 10.006.935.890

3.3 Balance sheet

Below is Glamrend's balance sheet for five consecutive years The balance sheet shows Glamrend's financial position at the end of the year The balance sheet includes assets, equity and liabilities Assets will be equal to equity minus liabilities

The Glamrend's assets are divided into two groups: long-term assets and short-term assets Short-term assets include cash, receivables and inventory, while Glamrend's long-term assets include tangible assets such as computers and cameras An overview of Glamrend's assets Over the past 5 years, Glamrend has grown steadily, showing that the store's development is very stable

Regarding liabilities, because the store's goal is to receive payment discounts from suppliers, the store does not have any debt It shows that Glamrend's financial situation is excellent

As for equity, Glamrend received investment capital for 5 consecutive years, while retained earnings tended to increase every year, showing that the initial investment was steadily profitable

Overall, the balance sheet shows that Glamrend's finances are solid, with the store having assets and retained earnings growing steadily year over year while not having any debt It shows that Glamrend is financially stable and can thrive in the future