hindustan hi-tech dairy

8/2/2019 Hindustan Hi-Tech Dairy

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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by _______________ in this business plan isconfidential; therefore, reader agrees not to disclose it without the express written permission of _______________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature,other than information which is in the public domain through other means and that any disclosure or use of same by reader,may cause serious harm or damage to _______________.

Upon request, this document is to be immediately returned to _______________.

___________________

Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.


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1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 Company Locations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3.0 Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.1 Product and Service Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.2 Competitive Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.3 Sales Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.4 Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.5 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.6 Future Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.2.1 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.2.2 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.2.3 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.3.1 Business Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.3.2 Distributing a Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.3.3 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4 3 4 Main Competitors 8

Table of Contents


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8.2 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168.3 Key Financial Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

8.4 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178.5 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178.6 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208.7 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218.8 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228.9 Long-term Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238.10 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238.11 The Investment Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238.12 Use of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248.13 Payback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Table of Contents


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1.0 Executive Summary

1.1 Objectives

Hindustan Hi-Tech Dairy


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1.3 Keys to Success

Technology

Quality

Purity

2.0 Company Summary

Hindustan Hi -Tech Dairy is equipped w ith all modern technology and fine quali ty

of mi lk producing buffalos and cows. It is sitauted in Haryana( Saha) on land of 2

Acres.

Its main focus on producing high quali ty and purity of mi lk products.

2.1 Company Ownership

The ownership is divided betw een Six partners with equivalent share of 16.6% each.



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2.3 Company Locations and Facilities



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3.1 Product and Service Description

3.2 Competitive Comparison

3.3 Sales Literature

Rural Market

CSR Campaign- UtthaanLocal News Paper, Regional TV Channel.

qUrban Market

Sample, Internet, Social Media, Newspaper, Magazines .

3 4 F lfill t



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The organized dairy sector consumes 15% of Indias total mil k production, which

it uses primari ly for the production of l iquid milk, butter, cheese, and milk powder

Theunorganized dairy market in India is about 80% and still the Dudhiyaand Halw aidominate this section of the market. In this tradi tional system the mi lk produced is

directly sold to the consumers at the farm.

4.1 Market Segmentation

Urban Market

Semi-Urban Market

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5Potential Customers Growth CAGRUrban 25% 50,000 62,500 78,125 97,656 122,070 25.00%Semi Urban 20% 25,000 30,000 36,000 43,200 51,840 20.00%

0% 0 0 0 0 0 0.00%Total 23.40% 75,000 92,500 114,125 140,856 173,910 23.40%



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4.2.1 Market Needs

Pure and High Quality of M ilk and Mil k-Related Products at Best Prices.

4.2.2 Market Trends

Ind ia happens to be the goldmine of l ivestock resources. The Ind ian Dairy Industry

with a large number of Dairy Entrepreneurs in rural areas has made a tremendousimpact on agrarian economy of the country. With present production level of 110

mill ion tones milk per annum, India ranks fi rst in the world. Through optimal

utili zation of resource base and the induction of advance technology, Indian Dairy

Production can scale new heights. Milk production in Ind ia is growing at 4 % per

annum and is expected to reach 120 million tons by the end of 2012. The per capi ta

availabil ity of milk is about 265 gms. per day against the minimum requirement of

280 gms. India is one of the worlds largest and fastest growing market for mi lk andmilk products and i ts demand is growing by almost 7.5% annually in value terms.

Thus there is great scope for increasing milk production.

Wi th urbanization and high awareness levels, people and processing units prefer

clean milk i.e. the milk coming from healthy cows/ buffaloes, possessing good

flavor, devoid of dir t and fi lth, containing relatively small number of bacteria and

f f th i th i d h lf l if Thi i ibl l ith ll



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Husbandry & Dairying consti tuted by Planning Commission, Haryana is one of the

7 states in the country which has a potential for achieving high growth rate of 6-8 %

during the remaining part of the 11th Plan, whereas the current annual growth rateis evaluated at around 4%. Animal H usbandry is an important sub- sector of

agricul ture, which is contributing 20-30% of agricul tural GDP and milk alone

contr ibutes 68% of the GDP from the livestock.

The Murrah breed of buffalo has also been recognized to be the animal of 21St

century. There is a great demand of this high yield ing eli te breed not only f rom

within but outside the country as well. Most of the States procure breeding stockfrom Haryana for up gradation of their low producing buffaloes. The home tract of

Murrah buffalo is Rohtak, Jind, Jhajjar, Bhiwani, Fatehabad, Sonipat and H isar

districts of Haryana. The bulls of this breed are extensively used to upgrade the non-

descript buffalo stock. It is a better converter of coarse feeds into fat-rich milk even

under harsh agro-climatic situations. It is also described as the "Asian tractor",as it i s

in fact a tr iple purpose animal - for mi lk, meat and work.

Milk production in the State is 54.70 lacs M.T, out of which 80% is contributed by

buffaloes. The per head milk availability in the state is 640 gm per day which is 2nd

highest next to Punjab. According to livestock census - 2003, the buffalo population

in the state is 60 lacs and is increasing annually by 3% which directly reflects the

suitabil ity and adaptabil ity of buf faloes to the environment of the State. The

strategic location of the State having proximity to the national capital further gives it

an opportuni ty to upgrade its already existing well -organized milk marketing



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In this business plan the objective is to bring in pr ivate participation into the

Indian dairy sector through public private partnerships to provide a

comprehensive approach towards overcoming the present inclusive growth.

4.3.1 Business Participants

4.3.2 Distributing a Service

Franchisees would be distributed in targeted regions.

Local General stores in urban and semi urban areas.

4.3.3 Competition and Buying Patterns



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6.0 Strategy and Implementation Summary

6.1 SWOT Analysis

Strengths:

Demand profile: Absolutely optimistic.

Margins: Quite reasonable, even on packed liquid milk.Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced isflowing into the unorganized sector, which requires proper channelization.Technicalmanpower: Professionally-trained, technical human resource pool, built over last 30 years.

Weaknesses:

Perishability:Pasteurization has overcome this weakness partially. UHT gives milk long life.Surely, many new processes will follow to improve milk quality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk yield. However,increased awareness of developments like embryo transplant, artificial insemination andproperly managed animal husbandry practices, coupled with higher income to rural milkproducers should automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate transportation facility makemilk procurement problematic. But with the overall economic improvement in India, theseproblems would also get solved.

C titi With t i thi i d t titi i b i



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6.1.1 Strengths

Demand profi le: Absolutely optimistic. M argins: Quite reasonable, even on packed l iquid mi lk.

Avail abi l i ty of raw materi al : Abundant. Presentl y, more than 80 per cent of mi lkproduced i s fl owi ng into the unorgani zed sector, whi ch requi res proper

channelization.Technical manpower: Professionally-trained, technical humanresource pool, bui l t over last 30 years.

6.1.2 Weaknesses

Perishability:Pasteurization has overcome this weakness partially. UHT

gives mi lk long l ife. Surely, many new processes wil l follow to improve milkquality and extend i ts shelf l ife.

Lack of control over y ield: Theoreticall y, there is litt le control over mi lk

yield. However, increased awareness of developments like embryo

transplant, art if icial insemination and properly managed animal husbandry

practices, coupled w ith higher income to rural mil k producers should

automaticall y lead to improvement in mi lk yields.

L i ti f t W f b d d d i d t t t ti



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6.1.4 Threats

Milk vendors, the un-organizedsector: Today milk vendors are occupying the pride of place in theindustry. Organized dissemination of information about the harm that they are doing to producers andconsumers should see a steady decline in their importance.

6.2 Strategy Pyramid

6.3 Value Proposition

6.4 Competitive Edge

Our competative edge is :

Technology Quality

6.5 Marketing Strategy



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6.5.4 Distribution Strategy

6.5.5 Marketing Programs

6.6 Sales Strategy

We will provide Mil k products at best pr ice to the customers and business parties.

6.6.1 Sales Forecast

Table: Sales Forecast

Sales ForecastYear 1 Year 2 Year 3 Year 4 Year 5

Unit SalesRow 1 0 0 0 0 0Row 2 0 0 0 0 0Row 3 0 0 0 0 0Total Unit Sales 0 0 0 0 0

Unit Prices Year 1 Year 2 Year 3 Year 4 Year 5Row 1 $0.00 $0.00 $0.00 $0.00 $0.00

R 2 $0 00 $0 00 $0 00 $0 00 $0 00



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6.7 Strategic Alliances

6.8 Milestones

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentName me 5-4-2012 5-5-2012 $0 ABC DepartmentTotals $0



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John Doe

President

Jane Doe

Vice President

John Doe

Vice President

Jane Doe

Vice President

7.2 Management Team

7.3 Management Team Gaps

7.4 Personnel Plan

Table: Personnel

Personnel PlanYear 1 Year 2 Year 3 Year 4 Year 5

Partner 1 $4,800 $4,800 $5,100 $5,100 $5,400Partner 2 $4,800 $4,800 $5,100 $5,100 $5,400Partner 3 $4,800 $4,800 $5,100 $5,100 $5,400Partner 4 $4,800 $4,800 $5,100 $5,100 $5,400

P 5 $4 800 $4 800 $5 100 $5 100 $5 400



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Table: Start-up Funding

Start-up FundingStart-up Expenses to Fund $112,000Start-up Assets to Fund $227,500Total Funding Required $339,500

AssetsNon-cash Assets from Start-up $225,000Cash Requirements from Start-up $2,500Additional Cash Raised $1,860,500Cash Balance on Starting Date $1,863,000Total Assets $2,088,000

Liabilities and Capital

LiabilitiesCurrent Borrowing $1,000,000Long-term Liabilities $1,000,000Accounts Payable (Outstanding Bills) $100,000Other Current Liabil ities (interest-free) $100,000Total Liabilities $2,200,000

Capital

Planned InvestmentOwner $0Investor $0Additional Investment Requirement $0Total Planned Investment $0

Loss at Start-up (Start-up Expenses) ($112,000)Total Capital ($112,000)



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8.4 Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Units Break-even 0Monthly Revenue Break-even $0

Assumptions:Average Per-Unit Revenue $0.00

Average Per-Unit Variable Cost $0.00Estimated Monthly Fixed Cost $5,685



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Table: Profit and Loss

Pro Forma Profit and LossYear 1 Year 2 Year 3 Year 4 Year 5

Total Income $0 $0 $0 $0 $0Cost of Goods Sold $0 $0 $0 $0 $0

Gross Profit $0 $0 $0 $0 $0Gross Profit % 0.00% 0.00% 0.00% 0.00% 0.00%

ExpensesPayroll $28,800 $28,800 $30,600 $30,600 $32,400

Marketing/Promotion $11,100 $11,000 $11,000 $11,100 $12,000Depreciation $0 $0 $0 $0 $0

$0 $0 $0 $0 $0$0 $0 $0 $0 $0

Insurance $12,000 $12,000 $12,000 $12,000 $12,000Payroll Taxes $4,320 $4,320 $4,590 $4,590 $4,860Other $12,000 $12,000 $12,500 $12,500 $13,000

------------ ------------ ------------ ------------ ------------Total Expense $68,220 $68,120 $70,690 $70,790 $74,260

Profit Before Interest and Taxes ($68,220) ($68,120) ($70,690) ($70,790) ($74,260)

EBITDA ($68,220) ($68,120) ($70,690) ($70,790) ($74,260)

Other IncomeOther Income Account Name $0 $0 $0 $0 $0Other Income Account Name $0 $0 $0 $0 $0Total Other Income $0 $0 $0 $0 $0

Other ExpenseOther Expense Account Name $0 $0 $0 $0 $0Other Expense Account Name $0 $0 $0 $0 $0Total Other Expense $0 $0 $0 $0 $0



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8.6 Projected Cash Flow

Table: Cash Flow



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Subtotal Cash Spent $285,069 $188,217 $190,450 $195,782 $201,123

Net Cash Flow ($285,069) ($188,217) ($190,450) ($195,782) ($201,123)

Cash Balance $1,577,931 $1,389,715 $1,199,265 $1,003,483 $802,361

8.7 Projected Balance Sheet



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8.8 Business Ratios

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Year 4 Year 5Industry

ProfileSales Growth 0.00% 0.00% 0.00% 0.00% 0.00% 4.99%

Percent of Total AssetsAccounts Receivable 0.00% 0.00% 0.00% 0.00% 0.00% 5.26%

Inventory 0.28% 0.31% 0.35% 0.41% 0.49% 8.27%Other Current Assets 1.11% 1.24% 1.40% 1.63% 1.95% 33.87%Total Current Assets 88.91% 87.61% 85.96% 83.72% 80.53% 47.40%Long-term Assets 11.09% 12.39% 14.04% 16.28% 19.47% 52.60%Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 54.53% 53.45% 52.19% 50.33% 47.84% 25.83%Long-term Liabilities 55.47% 61.93% 70.21% 81.40% 97.34% 25.85%Total Liabilities 110.00% 115.38% 122.40% 131.73% 145.17% 51.68%Net Worth -10.00% -15.38% -22.40% -31.73% -45.17% 48.32%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Gross Margin 0.00% 0.00% 0.00% 0.00% 0.00% 63.82%Selling, General & AdministrativeExpenses

0.00% 0.00% 0.00% 0.00% 0.00% 33.64%

Advertising Expenses 0.00% 0.00% 0.00% 0.00% 0.00% 0.31%Profit Before Interest and Taxes 0.00% 0.00% 0.00% 0.00% 0.00% 2.77%

Main RatiosCurrent 1.63 1.64 1.65 1.66 1.68 1.11Quick 1.63 1.63 1.64 1.66 1.67 0.52



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8.9 Long-term Plan

8.10 Valuation

Table: Investment Analysis

Investment AnalysisStart Year 1 Year 2 Year 3 Year 4 Year 5

Initial InvestmentInvestment $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0Ending Valuation $0 $0 $0 $0 $0 $0Combination as Income Stream $0 $0 $0 $0 $0 $0Percent Equity Acquired 35%Net Present Value (NPV) $0Internal Rate of Return (IRR) 0%

AssumptionsDiscount Rate 10.00%Valuation Earnings Multiple 10 10 10 10 10Valuation Sales Multiple 2 2 2 2 2

Investment (calculated) $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0Calculated Earnings-basedValuation

$0 $0 $0 $0 $0

Calculated Sales-based Valuation $0 $0 $0 $0 $0Calculated Average Valuation $0 $0 $0 $0 $0



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8.12 Use of Funds

Table: Use of Funds

Use of Funds

Use AmountName $0Name $0Name $0Name $0

Total $0

8.13 Payback

Table: Payback

Payback

Projected Payback CalculationInvestment Year 1 Year 2 Year 3 Year 4 Year 5

Investment $500,000Cash Returns by Year $100,000 $100,000 $100,000 $100,000 $100,000Combination as Income Stream ($500,000) $100,000 $100,000 $100,000 $100,000 $100,000Cumulative Net Cash Flow toInvestors

($500,000) ($400,000) ($300,000) ($200,000) ($100,000) $0

Payback Period 5 years



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Academic Version

Table: Sales Forecast

Sales ForecastMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Unit SalesRow 1 0% 0 0 0 0 0 0 0 0 0 0 0 0Row 2 0% 0 0 0 0 0 0 0 0 0 0 0 0

Row 3 0% 0 0 0 0 0 0 0 0 0 0 0 0Total Unit Sales 0 0 0 0 0 0 0 0 0 0 0 0

Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Row 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 2 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 3 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

SalesRow 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Row 1 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 2 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 3 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Direct Cost of SalesRow 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix

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Academic Version

Table: Sales Forecast 2nd Year

Sales Forecast 2nd YearMonth 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Unit SalesRow 1 0% 0 0 0 0 0 0 0 0 0 0 0 0Row 2 0% 0 0 0 0 0 0 0 0 0 0 0 0Row 3 0% 0 0 0 0 0 0 0 0 0 0 0 0Total Unit Sales 0 0 0 0 0 0 0 0 0 0 0 0

Unit Prices Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24Row 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 2 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 3 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

SalesRow 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Direct Unit Costs Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24Row 1 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 2 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Row 3 0% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Direct Cost of Sales

Row 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Row 3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix

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Academic Version

Table: Personnel

Personnel PlanMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Partner 1 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 2 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 3 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 4 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 5 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 6 0% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Total People 40 40 40 42 42 45 47 50 50 55 55 55

Total Payroll $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400

Appendix

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Academic Version

Table: Personnel 2nd Year

Personnel 2nd YearMonth 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Partner 1 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 2 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 3 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 4 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 5 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Partner 6 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Total People 55 55 55 55 55 55 55 55 55 55 55 55

Total Payroll $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400

Appendix

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Academic Version

Table: Profit and Loss

Pro Forma Profit and LossMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Total Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Profit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Gross Profit % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ExpensesPayroll $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400Marketing/Promotion $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $800 $800 $800 $900 $900 $900Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Payroll Taxes 15% $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360Other $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

- -- -- --- -- -- - -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- --- - -- --- -- -- -- - --- -- --- -- - - -- -- -- -- -- - - -- -- --- -- -- - -- --- -- --- - - -- -- -- --- -- - -- -- -- --- -- - --- -- --- -- -Total Expense $5,760 $5,760 $5,760 $5,760 $5,760 $5,760 $5,560 $5,560 $5,560 $5,660 $5,660 $5,660

Profit Before Interest and Taxes ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,660) ($5,660) ($5,660)EBITDA ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,660) ($5,660) ($5,660)

Other Income

Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other ExpenseOther Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Net Profit ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,660) ($5,660) ($5,660)Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Appendix

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Academic Version

Table: Profit and Loss 2nd Year

Profit and Loss 2nd YearMonth 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Total Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Profit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Gross Profit % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

ExpensesPayroll $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400Marketing/Promotion 5% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $800 $800 $800 $800 $1,000 $800Depreciation 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $05% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Insurance 5% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Payroll Taxes $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360Other 5% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

- -- -- --- -- -- - -- -- -- -- --- -- -- -- -- -- -- -- -- --- -- --- - -- --- -- -- -- - --- -- --- -- - - -- -- -- -- -- - - -- -- --- -- -- - -- --- -- --- - - -- -- -- --- -- - -- -- -- --- -- - --- -- --- -- -Total Expense $5,760 $5,760 $5,760 $5,760 $5,760 $5,760 $5,560 $5,560 $5,560 $5,560 $5,760 $5,560

Profit Before Interest and Taxes ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,560) ($5,760) ($5,560)EBITDA ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,560) ($5,760) ($5,560)

Other Income

Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other ExpenseOther Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Other Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Net Profit ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,760) ($5,560) ($5,560) ($5,560) ($5,560) ($5,760) ($5,560)Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Appendix

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Academic Version

Table: Cash Flow

Pro Forma Cash FlowMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Cash from OperationsCash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cash from Receivables $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash from Operations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Additional Cash ReceivedNon Operating (Other) Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from OperationsCash Spending $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400Bill Payments $100,112 $3,360 $3,360 $3,360 $3,360 $3,360 $3,353 $3,160 $3,160 $3,163 $3,260 $3,260

Subtotal Spent on Operations $102,512 $5,760 $5,760 $5,760 $5,760 $5,760 $5,753 $5,560 $5,560 $5,563 $5,660 $5,660

Additional Cash SpentNon Operating (Other) Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Paid Out $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Spent $112,512 $15,760 $15,760 $15,760 $15,760 $15,760 $15,753 $15,560 $15,560 $15,563 $15,660 $15,660

Net Cash Flow ($112,512) ($15,760) ($15,760) ($15,760) ($15,760) ($15,760) ($15,753) ($15,560) ($15,560) ($15,563) ($15,660) ($15,660)Cash Balance $1,750,488 $1,734,728 $1,718, 968 $1, 703,208 $1, 687,448 $1,671,688 $1,655,935 $1,640,375 $1, 624,815 $1, 609,251 $1,593,591 $1,577,931

Appendix

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Academic Version

Table: Cash Flow 2nd Year

Cash Flow 2nd YearMonth 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Cash Received

Cash from OperationsCash Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cash from Receivables $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash from Operations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Additional Cash ReceivedNon Operating (Other) Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Expenditures Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Expenditures from OperationsCash Spending $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400Bill Payments $3,263 $3,360 $3,360 $3,360 $3,360 $3,360 $3,353 $3,160 $3,160 $3,160 $3,167 $3,353

Subtotal Spent on Operations $5,663 $5,760 $5,760 $5,760 $5,760 $5,760 $5,753 $5,560 $5,560 $5,560 $5,567 $5,753

Additional Cash SpentNon Operating (Other) Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Paid Out $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Spent $15,663 $15,760 $15,760 $15,760 $15,760 $15,760 $15,753 $15,560 $15,560 $15,560 $15,567 $15,753

Net Cash Flow ($15,663) ($15,760) ($15,760) ($15,760) ($15,760) ($15,760) ($15,753) ($15,560) ($15,560) ($15,560) ($15,567) ($15,753)Cash Balance $1,562,268 $1,546,508 $1,530, 748 $1, 514,988 $1, 499,228 $1,483,468 $1,467,715 $1,452,155 $1, 436,595 $1, 421,035 $1,405,468 $1,389,715

Appendix

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Academic Version

Table: Balance Sheet

Pro Forma Balance SheetMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Assets Starting Balances

Current AssetsCash $1,863,000 $1,750,488 $1,734,728 $1,718,968 $1,703, 208 $1,687,448 $1,671, 688 $1,655,935 $1, 640,375 $1,624,815 $1, 609,251 $1,593, 591 $1,577,931Accounts Receivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Inventory $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000Other Current Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000T ot al Cu rr ent A ss et s $ 1, 888 ,00 0 $1 ,77 5, 488 $1 ,75 9, 728 $1, 743 ,96 8 $ 1, 728, 208 $1, 712 ,44 8 $ 1, 696, 688 $1 ,68 0, 935 $1, 665 ,37 5 $1 ,64 9, 815 $1, 634 ,25 1 $ 1, 618, 591 $1 ,60 2, 931

Long-term AssetsLong-term Assets $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Long-term Assets $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000T ot al A ss et s $ 2, 088 ,00 0 $1 ,97 5, 488 $1 ,95 9, 728 $1, 943 ,96 8 $ 1, 928, 208 $1, 912 ,44 8 $ 1, 896, 688 $1 ,88 0, 935 $1, 865 ,37 5 $1 ,84 9, 815 $1, 834 ,25 1 $ 1, 818, 591 $1 ,80 2, 931

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current LiabilitiesAccounts Payable $100,000 $3,248 $3,248 $3,248 $3,248 $3,248 $3,248 $3,055 $3,055 $3,055 $3,151 $3,151 $3,151C ur rent Bo rro wi ng $ 1, 000 ,00 0 $1 ,00 0, 000 $1 ,00 0, 000 $1, 000 ,00 0 $ 1, 000, 000 $1, 000 ,00 0 $ 1, 000, 000 $1 ,00 0, 000 $1, 000 ,00 0 $1 ,00 0, 000 $1, 000 ,00 0 $ 1, 000, 000 $1 ,00 0, 000Other Current Liabilities $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 ($10,000) ($20,000)Sub to ta l C ur re nt L ia bi li ti es $ 1,20 0,00 0 $ 1,09 3,24 8 $ 1,08 3,24 8 $ 1,07 3,24 8 $ 1,06 3,24 8 $ 1,05 3,24 8 $ 1,04 3,24 8 $ 1,03 3,05 5 $ 1,02 3,05 5 $ 1,01 3,05 5 $ 1,00 3,15 1 $ 99 3,15 1 $ 98 3,15 1

L ong -t er m Li abi lit ies $ 1, 000 ,00 0 $1 ,00 0, 000 $1 ,00 0, 000 $1, 000 ,00 0 $ 1, 000, 000 $1, 000 ,00 0 $ 1, 000, 000 $1 ,00 0, 000 $1, 000 ,00 0 $1 ,00 0, 000 $1, 000 ,00 0 $ 1, 000, 000 $1 ,00 0, 000T ot al Li ab il it ies $ 2, 200 ,00 0 $2 ,09 3, 248 $2 ,08 3, 248 $2, 073 ,24 8 $ 2, 063, 248 $2, 053 ,24 8 $ 2, 043, 248 $2 ,03 3, 055 $2, 023 ,05 5 $2 ,01 3, 055 $2, 003 ,15 1 $ 1, 993, 151 $1 ,98 3, 151

Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0R et ai ne d E ar nin gs ( $1 12 ,00 0) ( $11 2, 000 ) ($ 11 2, 000) ( $1 12 ,00 0) ( $1 12, 000 ) ( $1 12 ,00 0) ( $1 12, 000 ) ( $1 12 ,000 ) ( $112 ,00 0) ($ 11 2, 000) ( $112 ,00 0) ( $1 12, 000 ) ( $11 2, 000)Earnings $0 ($5,760) ($11,520) ($17,280) ($23,040) ($28,800) ($34,560) ($40,120) ($45,680) ($51,240) ($56,900) ($62,560) ($68,220)Total Capital ($112,000) ($117,760) ($123,520) ($129,280) ($135, 040) ($140,800) ($146, 560) ($152,120) ($157,680) ($163,240) ($168,900) ($174, 560) ($180,220)Total L ia bi li ti es a nd C ap ital $ 2,08 8,00 0 $ 1,97 5,48 8 $ 1,95 9,72 8 $ 1,94 3,96 8 $ 1,92 8,20 8 $ 1,91 2,44 8 $ 1,89 6,68 8 $ 1,88 0,93 5 $ 1,86 5,37 5 $ 1,84 9,81 5 $ 1,83 4,25 1 $ 1,81 8,59 1 $ 1,80 2,93 1

Net Wort h ($112,000) ($117,760) ($123,520) ($129,280) ($135, 040) ($140,800) ($146, 560) ($152,120) ($157,680) ($163,240) ($168,900) ($174, 560) ($180,220)

Appendix

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Table: Balance Sheet 2nd Year

Balance Sheet 2nd YearMonth 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Assets

Current AssetsCash $1,562,268 $1,546,508 $1,530,748 $1,514,988 $1,499,228 $1,483,468 $1,467,715 $1,452,155 $1,436,595 $1,421,035 $1,405,468 $1,389,715Accounts Receivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Inventory $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000Other Current Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000Total Current Assets $1,587,268 $1,571,508 $1, 555,748 $1,539,988 $1,524,228 $1,508, 468 $1,492,715 $1,477,155 $1,461,595 $1, 446,035 $1, 430,468 $1,414,715

Long-term AssetsLong-term Assets $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Long-term Assets $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000Total Asset s $1,787,268 $1,771,508 $1, 755,748 $1,739,988 $1,724,228 $1,708, 468 $1,692,715 $1,677,155 $1,661,595 $1, 646,035 $1, 630,468 $1,614,715

Liabilities and Capital Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24

Current LiabilitiesAccounts Payable $3,248 $3,248 $3,248 $3,248 $3,248 $3,248 $3,055 $3,055 $3,055 $3,055 $3,248 $3,055Current Borrowing $1,000,000 $1,000,000 $1, 000,000 $1,000,000 $1,000,000 $1,000, 000 $1,000,000 $1,000,000 $1,000,000 $1, 000,000 $1, 000,000 $1,000,000Other Current Liabilities ($30,000) ($40,000) ($50,000) ($60,000) ($70,000) ($80,000) ($90, 000) ($100,000) ($110,000) ($120,000) ($130,000) ($140,000)Subtotal Current Liabilities $973,248 $963,248 $953,248 $943,248 $933,248 $923,248 $913,055 $903,055 $893,055 $883,055 $873,248 $863,055

Long-term Liabilities $1,000,000 $1,000,000 $1, 000,000 $1,000,000 $1,000,000 $1,000, 000 $1,000,000 $1,000,000 $1,000,000 $1, 000,000 $1, 000,000 $1,000,000Total Liabilities $1,973,248 $1,963,248 $1, 953,248 $1,943,248 $1,933,248 $1,923, 248 $1,913,055 $1,903,055 $1,893,055 $1, 883,055 $1, 873,248 $1,863,055

Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Retained Earnings ($180,220) ($180,220) ($180,220) ($180,220) ($180,220) ($180, 220) ($180,220) ($180,220) ($180,220) ($180,220) ($180,220) ($180,220)Earnings ($5,760) ($11,520) ($17,280) ($23,040) ($28,800) ($34,560) ($40,120) ($45,680) ($51,240) ($56,800) ($62,560) ($68,120)Total Capital ($185,980) ($191,740) ($197,500) ($203,260) ($209,020) ($214,780) ($220,340) ($225,900) ($231,460) ($237,020) ($242,780) ($248,340)T ot al Li ab il it ies a nd Cap it al $1 ,78 7, 26 8 $1 ,77 1, 508 $1, 755 ,74 8 $ 1, 739 ,988 $ 1, 724 ,22 8 $ 1, 708, 468 $1 ,69 2, 715 $1 ,67 7, 155 $1 ,66 1, 595 $1, 646 ,03 5 $1, 630 ,46 8 $ 1, 614 ,71 5

Net Worth ($185,980) ($191,740) ($197,500) ($203,260) ($209,020) ($214,780) ($220,340) ($225,900) ($231,460) ($237,020) ($242,780) ($248,340)

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