Willamette Furniture - Sample Plan
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Table of Contents 1.0
Execut Executive ive Summ Summary ary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Objecti Objectives ves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Mission Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Keys to Succ Success ess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 1 2 2
2.0
Compan Company y Summar Summary y . . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . . . .. . . . . . .. . . . .. . . . . .. . . . 2 2.1 2.1 Compa Company ny Own Owner ersh ship ip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.2 2.2 Compa Company ny His Histo tory ry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.0
Produc Products ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.0
Market Market Analy Analysis sis Summ Summary ary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Market Market Segm Segment entati ation on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Target Target Mark Market et Segm Segment ent Stra Strateg tegy y . .. . .. . . .. . .. . .. . .. . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . 4.3 Industr Industry y Analy Analysis sis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 4.3.1 Compet Competiti ition on and and Buyin Buying g Patte Patterns rns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 5 6 6 6
5.0
Strategy Strategy and Implementa Implementation tion Summar Summary y . .. . .. . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . . 5.1 Compet Competiti itive ve Edge Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Marketi Marketing ng Stra Strateg tegy y . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . .. . . .. . .. . .. . .. . . 5.3 Sales Sales Strat Strategy egy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.1 5.3.1 Sales Sales Fore Forecas castt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Milesto Milestones nes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 7 7 8 9 11
6.0
Managem Management ent Summ Summary ary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6.1 Personn Personnel el Plan Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.0
Financial Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Import Important ant Assump Assumptio tions ns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Break-e Break-even ven Analys Analysis is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Project Projected ed Prof Profit it and and Loss Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 Project Projected ed Cash Cash Flow Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 13 14 15 18
Willamette Furniture Mfr. 1.0 Executive Summary Willamette Furniture Mfr. has been riding a growth spurt, having discovered the high-end direct mail channel that gave us a push to new potential volumes through channels. Bolstered by appearances in specialty catalogs, we were able to develop another additional channel through distributors of office equipment that sell directly to corporations. This annual business plan calls for another three years of accelerated growth. Because our sales growth has brought some working capital implications, we are carefully planning to manage growth and provide for steady cash flow. We also expect to be profitable as never before. In all, this plan is a healthy company with good growth prospects, looking to manage its orderly growth in the near future.
Highlights
$1,200,000 $1,000,000 $800,000
Sales $600,000
Gross Margin Net Profit
$400,000 $200,000
Willamette Furniture Mfr. 1.2 Mission Willamette Furniture Mfr. helps create pleasant, productive office environments with welldesigned furniture that incorporates new technology into the classic office mode, in which real people can work happily. We are sensitive to the look and feel of good wood and fine furniture as well as to high-powered personal computing. We always provide the best possible value to our customers who care about quality office environments, and we want every dollar spent with us to be well spent. We also create and nurture a healthy, creative, respectful, and fun office and workshop environment, in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce. 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.
1.3 Keys to Success • Uncomprom Uncompromising ising commi commitmen tmentt to the quality quality of the the end product: product: quality quality wood, wood, quality quality workmanship, quality design, quality of end result. • Successf Successful ul niche niche marketing: marketing: we need need to find the the quality-con quality-consciou scious s customer customer in the right channels, and we need to make sure that customer can find us. • Almost-a Almost-autom utomatic atic assembly assembly:: we can't afford afford to ship fully-ass fully-assemble embled d desks, but assembly must be so easy and automatic that it makes the customer feel better about the quality, not worse.
2.0 Company Summary Willamette Furniture Mfr. is a privately-owned specialty manufacturer manufacturer of high-end office
Willamette Furniture Mfr. 2.2 Company History Willamette Furniture Mfr. had actually existed since the 1970s as a "hippy commune," but its present existence began in 1992 when the furniture line was purchased by Jim and Susan Graham. The Grahams moved to Oregon from California and purchased the business as part of the move. Sales took a big jump in 1997, when we reached more effective channels of distribution. The key was winning a place in the Premier Executive office furniture catalog, which led to winning the interest of the Needham furniture distributors, and display space in several hundred stores. Profitability and working capital were problems during our recent growth, but we believe we now have costs and cash flow under control.
Past Performance
$250,000
$200,000
$150,000
Sales Gross
$100,000
Net
Willamette Furniture Mfr. Table: Past Performance Past Performance 1995 $127,809 $58,381 45.68% $54,602 0 4.00
1996 $130,568 $72,374 55.43% $69,801 0 4.70
1997 $225,790 $105,245 46.61% $90,125 36 6.00
1995
1996
1997
Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$1,438 $27,605 $10,141 $2,375 $41,559
Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets
$0 $0 $0
$0 $0 $0
$3,210 $1,720 $1,490
Total Assets
$0
$0
$43,049
$0 $0
$0 $0
$11,191 $0
$0
$0
$1,803
$0
$0
$12,994
Long-term Liabilities Total Liabilities
$0 $0
$0 $0
$0 $12,994
P id i C
$0
$0
$4 500
Sales Gross Margin Gross Margin % Operating Expenses Collection Period (days) Inventory Turnover Balance Sheet
Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities (interest free) Total Current Liabilities
it l
Willamette Furniture Mfr. 4.0 Market Analysis Summary Our target market is a person who wants to have very fine furniture with the latest in technology, combined with an old fashioned sense of fine woods and fine woodworking. This person can be in the corporate towers, small or medium business, or in a home office. The common bond is the appreciation of quality, and the lack of price constraints.
4.1 Market Segmentation •
Corporate executives: our market research indicates about 2.5 million potential customers who are managers in corporations of more than 100 employees. The target customer is going to be at a high executive level, in most cases, because the purchase price is relatively steep compared to standard office furniture.
•
Small business owners: our customer surveys indicate a strong market among the owners of businesses with fewer than 100 employees. There are 11 million such businesses in this country, most of them with concentrated ownership that makes the owners potential customers.
• Home offices: the home office business has proliferated during the 1990s, and we also have home offices for people employed outside the home. This is a big market, some 36 million home offices, growing faster than other markets.
Market Analysis (Pie)
Willamette Furniture Mfr. Table: Market Analysis Market Analysis Potential Customers Corporate Executives Small business owners Home offices Other Total
Growth 1% 4% 10% 3% 8.23%
1998
1999
2000
2001
2002
2,500,000 11,000,000 36,000,000 1,000,000 50,500,000
2,525,000 11,440,000 39,600,000 1,030,000 54,595,000
2,550,250 11,897,600 43,560,000 1,060,900 59,068,750
2,575,753 12,373,504 47,916,000 1,092,727 63,957,984
2,601,511 12,868,444 52,707,600 1,125,509 69,303,064
CAGR 1.00% 4.00% 10.00% 3.00% 8.23%
4.2 Target Market Segment Strategy Our segment definition is of itself strategic. We are not intending to satisfy all users of office furniture intended for use with personal computers, but, rather, only those who are most demanding. We are definitely out to address the needs of the high-end buyer, who is willing to pay more for quality. In our particular market, we also seek the buyer who appreciates two attributes: the quality of furniture workmanship and the excellence of design, with an understanding of technology and ergonomics built in.
4.3 Industry Analysis The office furniture industry has undergone a great deal of change in this decade. The growth of the office superstores made a few large brands dominant. They produce relatively inexpensive furniture that makes compromises in order to stay at the low price level. Makers of higher quality furniture are in general shuffling for niches to hide in. Although
Willamette Furniture Mfr. 5.0 Strategy and Implementation Summary We focus on a special kind of customer, the person who wants very high quality office furniture customized to work beautifully with modern technology including personal computers, scanners, internet connections, and other high-tech items. Our customer might be in larger corporations, small or medium business, or in a home office with or without a home-office business. What is important to the customer is elegance, fine workmanship, ease of use, ergonomics, and practicality. Our marketing strategy assumes that we need to go into specialty channels to address our target customer's needs. The tie-in with the high-end quality catalogs like Sharper Image is perfect, because these catalogs cater to our kind of customers. We position as the highest quality, offering status and prestige levels of purchase. The product strategy is also based on quality, in this case the intersection of technical understanding with very high quality woodworking and professional materials, and workmanship. Our most important competitive edge is our assembly strategy, which is based on interlocking wood pieces of such high quality that assembly is not only a pleasure for our customers, it is actually a feature that enhances the sense of quality.
5.1 Competitive Edge Our competitive edge is our dominance of high-technology ergonomics and traditional traditional highquality furniture workmanship. Although there are many computer furniture manufacturers, and many computer lovers, few have brought the two crafts together as we have.
Willamette Furniture Mfr. 5.3 Sales Strategy Our strategy focuses first on maintaining the identity with the high-end buyer who appreciates the best available quality, but is also very demanding regarding computer systems and technology. We've been able to find these customers using a combination of direct mail catalogs and direct sales to distributors. For the next year we continue to focus on growing presence in the high-end direct mail catalog that finds our specialty customer. We will work with Sharper Image and Broadview more than ever, and we expect to gain position in the major airline catalogs as well. Specialty retail is a new channel that could become important for us. Our work with distributors has been promising. We hope to continue the relationship with distributors selling directly to larger corporations, even though this takes working capital to support receivables.
Willamette Furniture Mfr. 5.3.1 Sales Forecast Our sales forecast assumes no change in costs or prices, which is a reasonable assumption for the last few years. We are expecting to increase sales, growing from $225 thousand last year to $450 thousand in the next year, which is about doubling in size. The growth forecast is in line with our last year, and is relatively high for our industry because we are developing new channels. In 1999 and 2000 we expect growth closer to 50% per year, to a projected total of more than $1 million in 2000. We are projecting significant change in the product line, or in the proportion between different lines. The key to our growth is the growth of the new channels, with the main desk. Our seasonality, as shown in the chart, is still a factor in the business. We tend to sell much better in Spring and Fall, and sales drop in the summer.
Table: Sales Forecast Sales Forecast 1998
1999
2000
Unit Sales Executive desk oak Executive desk cherry Other furniture oak Other furniture cherry Other Total Unit Sales
209 31 45 7 6 298
350 30 50 10 10 450
600 30 50 10 10 700
Unit Prices Executive desk oak Executive desk cherry Other furniture oak
1998 $1,600.00 $1,750.00 $900 00
1999 $1,600.00 $1,750.00 $900 00
2000 $1,600.00 $1,600.00 $900 00
Willamette Furniture Mfr.
Sales Monthly $60,000 $50,000 $40,000
Executive desk oak Executive desk cherry
$30,000
Other furniture oak Other furniture cherry
$20,000
Other
$10,000 $0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Sales by Year
$1,200,000 $1,000,000
Willamette Furniture Mfr. 5.4 Milestones The accompanying table shows specific milestones, with responsibilities assigned, dates, and (in most cases) budgets. We are focusing in this plan on a few key milestones that should be accomplished.
Table: Milestones Milestones Milestone Spring trade show Spring trade show Spring trade show Our in-house catalog plan First catalog New distributor New distributor Second catalog In-house catalog design In-house catalog mailing Third catalog placement Fall trade show Fall trade show Fall trade show Laptop product test Laptop product release Totals
Start Date 1/1/1998 1/15/1998 1/15/1998
End Date 5/15/1998 5/15/1998 5/15/1998
Budget $10,000 $20,000 $6,000
Manager Terry Terry Terry
Department PR Events Travel
1/31/1998
2/28/1998
$0
Terry
Other
3/1/1998 3/15/1998 3/15/1998 4/1/1998 4/1/1998 5/1/1998 5/15/1998 5/15/1998 5/15/1998 5/15/1998 6/15/1998 1/1/1998
4/15/1998 3/30/1998 4/30/1998 5/15/1998 5/1/1998 6/1/1998 6/15/1998 10/15/1998 10/15/1998 10/15/1998 6/20/1998 10/15/1998
$125,000 $5,000 $3,000 $85,000 $2,000 $5,000 $54,000 $8,000 $20,000 $6,000 $1,000 $15,000 $365,000
Jan Jan Jan Jan Terry Terry Jan Terry Terry Terry Jim Terry
Ads Travel Sales Ads Other Other Ads PR Events Travel Other PR
6.0 Management Summary We are a small company owned and operated by Jim and Susan Graham, husband and wife,
Willamette Furniture Mfr. Table: Personnel Personnel Plan Name or Title or Group Name or Title or Group Name or Title or Group Total People Total Payroll
1998 $0 $0 $0 0
1999 $0 $0 $0 0
2000 $0 $0 $0 0
$0
$0
$0
Willamette Furniture Mfr. 7.0 Financial Plan The financial picture is quite encouraging. We have been slow to take on debt, but with our increase in sales we do expect to apply for a credit line with the bank, to a limit of $150,000. The credit line is easily supported by assets. We do expect to be able to take some money out as dividends. The owners don't take overly generous salaries, so some draw is appropriate.
7.1 Important Assumptions The accompanying table lists our main assumptions for developing our financial projections. The most sensitive assumption is the collection days. We would like to improve collection days to take pressure off of our working capital, but our increasing sales through channels makes the collection time a cost of doing business. We also expect to see a decline in our inventory turnover ratio, another unfortunate side effect of increasing sales through channel. We find ourselves having to buy earlier and hold more finished goods in order to deal with sales through the channel.
Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other
1998 1 10.00% 90.00% 25.42% 0
1999 2 10.00% 90.00% 25.00% 0
2000 3 10.00% 90.00% 25.00% 0
Willamette Furniture Mfr. 7.2 Break-even Analysis Our break-even analysis is based on running costs, the "burn-rate" costs we incur to keep the business running, not on theoretical fixed costs that would be relevant only if we were closing. Our assumptions on average unit sales and average per-unit costs depend on averaging. We don't really need to calculate an exact average, this is close enough to help us understand what a real break-even point might be. The essential insight here is that our sales level seems to be running comfortably above break-even.
Table: Break-even Analysis Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost
1 $1,137 $1,513.93 $381.96 $850
Break-even Analysis $12,000 $10,000 $8,000
Willamette Furniture Mfr. 7.3 Projected Profit and Loss We do expect a significant increase in profitability this year, and in the future, because we have learned how to deal with the increasing sales levels of selling through channels. Despite the lower profitability levels of recent years, we expect to see very strong net profits in 1998, and remain at that level through 2000. Our higher sales volume has lowered our cost of goods and increased our gross margin. This increase in gross margin is important to profitability.
Table: Profit and Loss Pro Forma Profit and Loss
Cost of Goods Sold
1998 $451,150 $113,825 $3,110 -----------$116,935
1999 $692,500 $174,000 $0 -----------$174,000
2000 $1,079,000 $270,400 $0 -----------$270,400
Gross Margin Gross Margin %
$334,215 74.08%
$518,500 74.87%
$808,600 74.94%
$0 $0 $1,000 $1,500 $3,600 $2,400 $500 $0 $1,200 -----------$10 200
$0 $0 $1,100 $1,700 $4,000 $2,600 $600 $0 $1,300 -----------$11 300
$0 $0 $1,200 $1,900 $4,400 $2,900 $700 $0 $1,400 -----------$12 500
Sales Direct Costs of Goods Other Costs of Goods
Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Rent Utilities Insurance Payroll Taxes Other Total Operating Expenses
Willamette Furniture Mfr.
Profit Monthly $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Profit Yearly
$600,000 $500,000
Willamette Furniture Mfr.
Gross Margin Monthly $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Gross Margin Yearly
$900,000 $800,000
Willamette Furniture Mfr. 7.4 Projected Cash Flow Although we expect to be more profitable in 1998, we still have drains on the cash flow. We need to invest $25,000 in new assembly and manufacturing equipment, plus $15,000 in new computer equipment, and another $10,000 in miscellaneous short-term assets, including office equipment. Because of our increased sales through channels, and necessary increase in inventory levels, we need to increase working capital. We plan to extend our credit line to cover as much as $150,000 in short-term credit, backed by receivables and inventory.
Table: Cash Flow Pro Forma Cash Flow 1998
1999
2000
$112,788 $288,966 $401,754
$173,125 $478,182 $651,307
$269,750 $743,283 $1,013,033
$0
$0
$0
$125,000 $0 $0 $0 $0 $50,000 $576,754
$50,000 $0 $0 $0 $0 $0 $701,307
$100,000 $0 $0 $0 $0 $0 $1,113,033
1998
1999
2000
$0
$0
$0
Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Ca Cash fr from Op Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending
Willamette Furniture Mfr.
Cash $300,000 $250,000 $200,000
Net Cash Flow
$150,000
Cash Balance $100,000 $50,000 $0 Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Willamette Furniture Mfr. 7.5 Projected Balance Sheet Our projected balance sheet shows an increase in net worth to more than $400 thousand in 2000, at which point we expect to be making compelling profits on sales of $1.1 million. With the present financial projections we will be careful in supporting our working capital credit line, and we are growing assets both because we want to -- new equipment -- and because we have to grow receivables and inventory to support growth in sales through channels.
Table: Balance Sheet Pro Forma Balance Sheet 1998
1999
2000
Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets
$255,489 $77,001 $12,070 $2,375 $346,935
$572,139 $118,194 $18,451 $2,375 $711,160
$1,054,773 $184,161 $28,673 $2,375 $1,269,983
Long-term Assets Long-term Assets Accumulated De Depreciation Total Long-term Assets Total Assets
$53,210 $2,720 $50,490 $397,425
$73,210 $3,820 $69,390 $780,550
$103,210 $5,020 $98,190 $1,368,173
1998
1999
2000
$23,727 $58,750 $1,803 $84,280
$26,448 $58,750 $1,803 $87,001
$40,652 $38,750 $1,803 $81,205
Assets
Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities
Willamette Furniture Mfr. 7.6 Business Ratios Our ratios look healthy and solid. Gross margin is projected to decline slightly, return on assets will run well above industry standards, and return on equity is excellent. Debt and liquidity ratios also look look good, with our Quick ratio increasing increasing over the next three years. years. The standard comparisons are based on SIC code 2521, manufacturers of wood office furniture.
Table: Ratios Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios
1998 99.81%
1999 53.50%
2000 55.81%
Industry Profile 4.60%
19.38% 3.04% 0.60% 87.30% 12.70% 100.00%
15.14% 2.36% 0.30% 91.11% 8.89% 100.00%
13.46% 2.10% 0.17% 92.82% 7.18% 100.00%
23.80% 32.10% 19.00% 74.90% 25.10% 100.00%
21.21% 0.00% 21.21% 78.79%
11.15% 0.00% 11.15% 88.85%
5.94% 0.00% 5.94% 94.06%
38.40% 15.90% 54.30% 45.70%
100.00% 74.08%
100.00% 74.87%
100.00% 74.94%
100.00% 32.40%
21.44%
20.58%
19.94%
18.90%
0.00% 71.82%
0.00% 73.24%
0.00% 73.78%
1.40% 1.80%
Appendix Table: Personnel Personnel Plan Name or Title or Group Name or Title or Group Name or Title or Group Total People Total Payroll
0% 0% 0%
Jan-98 $0 $0 $0 0
Feb-98 $0 $0 $0 0
Mar-98 $0 $0 $0 0
Apr-98 $0 $0 $0 0
May-98 $0 $0 $0 0
Jun-98 $0 $0 $0 0
Jul-98 $0 $0 $0 0
Aug-98 $0 $0 $0 0
Sep-98 $0 $0 $0 0
Oct-98 $0 $0 $0 0
Nov-98 $0 $0 $0 0
Dec-98 $0 $0 $0 0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Appendix Table: Profit and Loss Pro Forma Profit and Loss Jan-98 $31,100 $7,815 $3,110 -----------------$10,925
Feb-98 $35,450 $8,995 $0 ------------------$8,995
Mar-98 $34,450 $8,695 $0 -------------------$8,695
Apr-98 $ 36,950 $9,320 $0 -------------------$9,320
May-98 $ 32,700 $8,215 $0 -------------------$8,215
Jun-98 $ 26,400 $6,690 $0 --------------------$6,690
Jul-98 $27,900 $7,015 $0 -------------------$7,015
Aug-98 $32,100 $8,070 $0 -----------------$8,070
Sep-98 $33,850 $8,595 $0 -------------------$8,595
Oct-98 $ 55,700 $14,145 $0 -------------------$14,145
Nov-98 $ 56,450 $14,200 $0 -------------------$14,200
Dec-98 $ 48,100 $12,070 $0 -------------------$12,070
$20,175 64.87%
$26,455 74.63%
$25,755 74.76%
$27,630 74.78%
$24,485 74.88%
$19,710 74.66%
$20,885 74.86%
$24,030 74.86%
$25,255 74.61%
$41,555 74.61%
$42,250 74.84%
$36,030 74.91%
$0 $0 $0 $125 $300 $200 $0 $0 $100 -----------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 ------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 --------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -----------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $125 $300 $200 $0 $0 $100 -------------------$725
$0 $0 $0 $1,000 $125 $300 $200 $500 $0 $100 -------------------$2,225
Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred
$19,450 $19,450 $625 $5,648
$25,730 $25,730 $615 $6,279
$25,030 $25,030 $563 $6,117
$26,905 $26,905 $552 $6,588
$23,760 $23,760 $510 $5,812
$18,985 $18,985 $469 $4,629
$20,160 $20,160 $417 $4,936
$23,305 $23,305 $406 $5,725
$24,530 $24,530 $396 $6,034
$40,830 $40,830 $510 $10,080
$41,525 $41,525 $542 $10,246
$33,805 $34,805 $490 $8,329
Net Profit Net Profit/Sales
$13,178 42.37%
$18,837 53.14%
$18,351 53.27%
$19,765 53.49%
$17,437 53.32%
$13,887 52.60%
$14,808 53.07%
$17,174 53.50%
$18,101 53.47%
$30,240 54.29%
$30,738 54.45%
$24,987 51.95%
Sales Direct Costs of Goods Other Costs of Goods Cost of Goods Sold Gross Margin Gross Margin % Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Rent Utilities Insurance Payroll Taxes Other Total Operating Expenses
15%
Appendix Table: Cash Flow Pro Forma Cash Flow Jan-98
Feb-98
Mar-98
Apr-98
May-98
Jun-98
Jul-98
Aug-98
Sep-98
Oct-98
Nov-98
Dec-98
$7,775 $13,803 $21,578
$8,863 $14,580 $23,443
$8,613 $23,434 $32,046
$9,238 $26,563 $35,800
$8,175 $25,900 $34,075
$6,600 $27,606 $34,206
$6,975 $24,368 $31,343
$8,025 $19,838 $27,863
$8,463 $21,030 $29,493
$13,925 $24,119 $38,044
$14,113 $25,934 $40,046
$12,025 $41,794 $53,819
$0 $75,000 $0 $0 $0 $0 $0 $96,578
$0 $5,000 $0 $0 $0 $0 $ 25,000 $53,443
$0 $0 $0 $0 $0 $0 $0 $32,046
$0 $5,000 $0 $0 $0 $0 $0 $40,800
$0 $0 $0 $0 $0 $0 $0 $34,075
$0 $0 $0 $0 $0 $0 $0 $34,206
$0 $0 $0 $0 $0 $0 $0 $31,343
$0 $5,000 $0 $0 $0 $0 $0 $32,863
$0 $5,000 $0 $0 $0 $0 $25,000 $59,493
$0 $20,000 $0 $0 $0 $0 $0 $58,044
$0 $10,000 $0 $0 $0 $0 $0 $50,046
$0 $0 $0 $0 $0 $0 $0 $53,819
Jan-98
Feb-98
Mar-98
Apr-98
May-98
Jun-98
Jul-98
Aug-98
Sep-98
Oct-98
Nov-98
Dec-98
Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations
$0 $11,711 $11,711
$0 $15,670 $15,670
$0 $17,727 $17,727
$0 $15,866 $15,866
$0 $17,689 $17,689
$0 $14,052 $14,052
$0 $11,069 $11,069
$0 $13,503 $13,503
$0 $15,991 $15,991
$0 $16,766 $16,766
$0 $30,836 $30,836
$0 $25,575 $25,575
Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent
$0 $0 $0 $0 $0 $0 $0 $11,711
$0 $6,250 $0 $0 $0 $25,000 $0 $46,920
$0 $6,250 $0 $0 $0 $0 $0 $23,977
$0 $6,250 $0 $0 $0 $0 $0 $22,116
$0 $5,000 $0 $0 $0 $0 $0 $22,689
$0 $5,000 $0 $0 $0 $0 $0 $19,052
$0 $6,250 $0 $0 $0 $0 $0 $17,319
$0 $6,250 $0 $0 $0 $0 $0 $19,753
$0 $6,250 $0 $0 $0 $25,000 $0 $47,241
$0 $6,250 $0 $0 $0 $0 $0 $23,016
$0 $6,250 $0 $0 $0 $0 $0 $37,086
$0 $6,250 $0 $0 $0 $0 $0 $31,825
Net Cash Flow Cash Balance
$84,867 $86,305
$6,523 $92,827
$8,069 $100,897
$18,684 $119,580
$11,386 $130,967
$15,154 $146,121
$14,024 $160,145
$13,110 $173,254
$12,252 $185,506
$35,028 $220,534
$12,961 $233,495
$21,994 $255,489
Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures
0.00%
