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Refrigerant Recovery: Road Runner Refrigerant Recovery System (Financial Plan)

 
Business Plans:
 
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(continued)

Mission Statement

Industry Background

Product Offering

Marketing Plan

Operations

Management Team

Financial Plan

Goals and Objectives

  • Achieve positive cash flow by the end of year 1.
    • Obtain needed financing ($230,000).
    • Accurately forecast sales with the help of wholesalers and sales representatives.
  • Maintain at least a 40% gross margin throughout years 1, 2, and 5.
    • Keep raw material waste to .05%
    • Maintain excellent relationships with suppliers.
    • Continuously improve production efficiency.
  • Provide a 250% return on investment (ROI) by December 1994.
    • Pay back half of shareholders investment in December, 1996, and double the investment in December, 1997.

ROAD RUNNER is a division of Real Manufacturing Company, Inc. RMC has been in business for the past six years, and a historical record of actual expense amounts is available. Many of the forecasted general and administration expenses in ROAD RUNNER'S business plan are approximations based on amounts that RMC incurred. However, the ROAD RUNNER division is of a different nature than RMC's other interests, and the expense structure will be different. Furthermore, in constructing the financials for ROAD RUNNER, the conservative principle was utilized.

Financial Rationale

  • Direct Materials $450 per unit
  • Administrative Salaries - During the inception of the ROAD RUNNER division, RMC instituted a "pool system" to manage salaries. Administrators will be responsible for overall operations at Real Manufacturing. Therefore, salaries are distributed equally between Real Manufacturing overhead and ROAD RUNNER overhead.
  • Commissions - Based on the existing commission structure in the refrigeration industry, ROAD RUNNER is forecasting 7% commission for all sales representatives of ROAD RUNNER.
  • Payroll Taxes Estimated to be 14% of salaries.
  • Employee Fringe Benefits - Employee fringe benefits include such items as contests, employee social functions, and employee bonuses. Fringe Benefits will average at $500 per employee per year.
  • Trade Shows $2000 per show (Includes booth rental and freight.)
  • Travel Airfare: $550 avg./trip
    Lodging: $70/day avg.
    Meals: $75/day avg.
    Car Rental: $50/day avg.
  • Rent .44/square foot per month
  • Utilities .16/square foot per month
  • General Business Insurance $850 per month
  • Telephone $450 per month
  • Freight $3450 per month
  • Office Expense $590 per month
  • Dues and Subscriptions $25 per month
  • Legal and Accounting $3200 per year
  • Licensees and Fees $108 per month
  • Bad Debt Expense 2% of sales
  • Returns and Allowances 2% of sales
  • Selling Price - All prices are based on an average from a regressive cost structure
    Year 1: $950 average per unit
    Year 2: $910 average per unit
    Year 3: $870 average per unit
  • Unit Sales Year 1:2,471 units
    Year 2: 11,950 units
    Year 3: 27,850 units
  • Product Warranties 1% of overall sales per year
  • Accounts Receivable Collection terms - 2/10, net 30
  • Inventory Purchases 31-60 days prior to sale: 50% of materials
    Month of sale: 50% of materials
  • Research & Development Year 1:2% of sales
    Year 2:4% of sales
    Year 3:5% of sales

Established Financing Structure

Due to the fact that ROAD RUNNER is a division of Real Manufacturing Company (RMC), a closely held corporation, maintaining a substantial equity position has proven an important consideration. In the initial stages of the formation of ROAD RUNNER, the company secured both debt and equity financing.

Debt - Loans from Family Bank in Tucson, Arizona ($ 15,000) and the Bank of Dallas, Texas, ($15,000) were obtained. These moneys proved to be critical in maintaining adequate cash flow for the first few months of research and development and production. Furthermore, ROAD RUNNER received a $100,000 line-of-credit from Marble Industries. Interest on the line-of- credit will be three (3) points above the prime interest rate. Marble Industries currently stands as the primary customer of RMC.

Equity -100,000 shares (common stock, par $ 1) have been distributed. Shareholders include: Real Manufacturing Corporation, 65,000 shares, Spring Inc. (outside investor), 35,000 shares.

Exit Strategies Protect Shareholders

ROAD RUNNER will utilize a "front-loaded" dividend structure to provide quick return on investment for shareholders. Shareholders will obtain dividends at the end of fiscal year 1996. Planned dividend payment structure is as follows. In December of 1996, shareholders will receive one-half of their original investment. In the subsequent year (1997) shareholders will obtain dividends in the amount of twice the original investment, bringing the total return on investment to 250%, after two years.

Shareholders have the option of holding onto their shares or selling them back to the company any time after 1997. A sell-back price for outstanding shares will be negotiated with the shareholders when the issue arises.

If an unforeseeable reason should force ROAD RUNNER to cease ongoing operations, very little risk will be encountered. ROAD RUNNER is a labor intensive operation that does not require large costs of capital equipment. Furthermore, at most, two months of inventory will remain in stock at all times. In the case of ROAD RUNNER liquidation, unused inventory would be sold back to the original suppliers, capital equipment (approximately $13,000) and other business assets will be sold. The proceeds of the liquidation will be distributed in the order of priority: debt holders, outside shareholders, Real Manufacturing Company, Inc. Furthermore, Real Manufacturing Company has agreed to provide financial protection for outside shareholders, in this situation.

Key Financial Data

199319941995
Units Sold2,47111,95027,850
Sales$2,300,501$10,657,010$23,744,910
Net Profit (Loss) After Tax$223,268$1,330,240$2,631,594
Gross Margin41.1%41.4%39.0%
Break Even Point (Units)8643,3317,154
Cash Flow (End of Year)$158,249$1,101,199$2,947,265
Dividend Payout (paid in Dec.)$50,000$200,000$400,000
Asset Turnover Ratio3.063.763.20
Increase in Sales—463.2%222.8%
Current Ratio1.762.372.33
Debt-to-Equity Ratio0.050.010.00

THIS PAGE INTENTIONALLY LEFT BLANK SEE NEXT PAGE FOR PROJECTED BALANCE SHEET

Projected Balance Sheet: Year 1

Oct 1992NovDecJan 1993
ASSETS
Current Assets
Cash9,58811,4237,84254,021
Accts Rcvable6,78318,16928,68257,268
Inventory2,2504,05010,12525,425
Total Current Assets18,62133,64246,650136,714
Property and Equipment - net of accumulated depreciation10,81710,63310,45014,178
TOTAL ASSETS29,43844,27557,100150,892
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accts Payable16,40025,85026,77560,025
Payroll Taxes Payable9581,94901,106
Income Taxes Payable0000
Curr. Portion of Long-Term Debt3,7503,7503,7507,500
Line of Credit Balance8,80018,80043,80078,800
Total Current Liabilities29,90850,34974,325147,431
Long-Term Debt10,93810,62510,31320,938
Total Liabilities40,84660,97484,638168,369
Stockholders' Equity
Common Stock10,00050,00065,000100,000
Retained Earnings(21,408)(66,699)(92,538)(117,477)
Total Stockholders' Equity(11,408)(16,699)(27,538)(17,477)
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY29,43844,27557,100150,892
BALANCE CHECKOKOKOKOK
ASSETS VS. LIABILITIES00(0)0
FebMarAprMayJuneJulyAugSept
29,44913,73824,83751,48767,99296,095121,748158,249
130,088225,389296,514360,953423,938438,473489,345501,458
43,42554,67565,92577,17577,17588,42588,42565,925
202,962293,802387,276489,614569,105622,992699,518725,631
13,90613,63315,81919,41719,01421,06922,56925,019
216,868307,436403,096509,031588,118644,062722,088750,650
114,700173,250227,500276,500307,750328,750353,250342,500
2,46701,7883,74102,1174,3990
00019,38335,89834,91442,58542,645
7,5007,5007,5007,5007,5007,5007,5007,500
78,80078,80068,80058,80048,80038,80028,80018,800
203,467259,550305,588365,924399,948412,081436,533411,445
20,31319,68819,06318,43817,81317,18816,56315,938
223,779279,238324,651384,361417,761429,268453,096427,383
100,000100,000100,000100,000100,000100,000100,000100,000
(106,911)(71,802)(21,555)24,66970,358114,793168,992223,268
(6,911)28,19878,445124,669170,358214,793268,992323,268
216,868307,436403,096509,031588,118644,062722,088750,650
OKOKOKOKOKOKOKOK
0(0)000000

Projected Balance Sheet: Years 2-5

YEAR 2
Dec 1993Mar 94June 94Sept 94
ASSETS
Current Assets
Cash228,806185,680274,6151,101,199
Accts Rcvable269,178819,1372,329,7821,452,633
Inventory88,425268,425403,425223,425
Total Current Assets586,4091,273,2423,007,8222,777,257
Property and Equipment - net of accumulated depreciation32,03939,98148,24755,839
TOTAL ASSETS618,4481,313,2223,056,0692,833,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accts Payable254,000739,2501,718,0001,065,500
Payroll Taxes Payable0000
Income Taxes Payable053,688199,59698,151
Curr. Portion of Long-Term Debt7,5007,5007,5007,500
Line of Credit Balance0000
Total Current Liabilities261,500800,4381,925,0961,171,151
Long-Term Debt14,06312,18810,3138,438
Total Liabilities275,563812,6251,935,4091,179,589
Stockholders' Equity
Common Stock100,000100,000100,000100,000
Retained Earnings242,886400,5971,020,6611,553,508
Total Stockholders' Equity342,886500,5971,120,6611,653,508
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY		618,4481,313,2223,056,0692,833,096
BALANCE CHECKOKOKOKOK
ASSETS VS. LIABILITIES00(0)0
YEAR3YEAR 4YEAR 5
Dec 1994Mar 95June 95Sept 95Sept 1996Sept 1997
1,441,1931,330,0341,472,8782,947,2655,695,5468,544,868
798,6601,899,0364,623,3543,700,4583,294,8603,522,188
178,425605,925988,425673,425720,450720,450
2,418,2783,834,9957,084,6577,321,1489,710,85612,084,381
66,15875,63985,203107,289193,689236,511
2,484,4373,910,6347,169,8607,428,4369,904,54512,320,892
664,0001,699,0003,680,0002,901,0002,698,4752,125,375
000000
19,502124,237344,889233,897150,324143,127
7,5007,5007,5007,50000
000000
691,0021,830,7374,032,3893,142,3972,848,7992,268,502
6,5634,6882,81393800
697,5641,835,4254,035,2013,143,3352,848,7992,268,502
100,000100,000100,000100,000100,000100,000
1,686,8721,975,2093,034,6584,185,1026,955,7469,952,390
1,786,8722,075,2093,134,6584,285,1027,055,74610,052,390
2,484,4373,910,6347,169,8607,428,4369,904,54512,320,892
OKOKOKOKOKOK
000000

Projected Statement of Profit and Loss: Year 1

Oct 1992Nov 92Dec 92Jan 1993Feb 93Mar 93
REVENUES
Gross Sales6,65016,15023,75049,400114,000190,000
Less: Returns and Allowances1333234759882,2803,800
NET REVENUES6,51715,82723,27548,412111,720186,200
COST OF GOODS SOLD
Direct Materials3,15030,60019,80034,20054,00090,000
Direct Labor1611,3698861,5302,4154,025
Manufacturing Overhead2,4405,2764,1495,6528,18311,941
TOTAL COST OF GOODS SOLD5,75137,24524,83541,38264,598105,966
GROSS MARGIN766(21,418)(1,560)7,03047,12280,234
GROSS MARGIN%11.8%−135.3%−6.7%14.5%42.2%43.1%
OPERATING EXPENSES
Admin Salaries & Wages5,5675,5675,5675,5675,5675,567
Sales/Mktg Salaries & Wages000000
Sales Commissions4751,1531,6963,5278,14013,566
Payroll Taxes796796796796796796
Employee Fringe Benefits750750750750750750
Employee Training320320320320320320
Trade Shows0002,00000
Advertising8508221,0053,4603,2853,346
Travel4,1504,1504,1504,1504,1504,150
Entertainment500500500500500500
Product R and D4701,3318611,4872,3483,914
Rent1,0561,0561,0561,0561,0561,056
Utilities384384384384384384
General Business Insurance849849849849849849
Telephone450450450450450450
Postage and Freight3,4503,4503,4503,4503,4503,450
Office Expense590590590590590590
Dues and Subscriptions252525252525
Legal and Accounting417417417417417417
Licenses and Fees108108108108108108
Depreciation183183183272272272
Equipment Maintenance220220220300300300
Vehicle Expense400400400400400400
Bad Debts1333234759882,2803,800
TOTAL OPERATING EXPENSES22,14223,84424,25231,84636,43745,010
OPERATING INCOME (LOSS)(21,376)(45,261)(25,811)(24,816)10,68535,224
INTEREST EXPENSE(32)(30)(28)(124)(119)(115)
INCOME BEFORE INCOME TAXES(21,408)(45,291)(25,839)(24,939)10,56635,109
INCOME TAXES000000
NET INCOME (LOSS)(21,408)(45,291)(25,839)(24,939)10,56635,109
NET INCOME (LOSS)%−328.5%−286.2%−111.0%−51.5%9.5%18.9%
RETAINED EARNINGS, BEGINNING0(21,408)(66,699)(92,538)(117,477)(106,911)
RETAINED EARNINGS, END(21,408)(66,699)(92,538)(117,477)(106,911)(71,802)
Apr 93May 93June 93July 93Aug 93Sept 93Total%Total
237,500285,000332,500332,500380,000380,0002,347,450100.0%
4,7505,7006,6506,6507,6007,60049,9492.0%
232,750279,300325,850325,850372,400372,4002,300,50198.0%
112,500135,000157,500157,500180,000180,0001,154,25049.2%
5,0136,0387,0447,0448,0508,05051,6412.2%
14,29016,63818,98718,98721,33521,335149,2136.4%
131,821157,676183,530183,530209,385209,3851,355,10357.7%
100,929121,624142,320142,320163,015163,015945,39840.3%
43.4%43.5%43.7%43.7%43.8%43.8%231.3%0.0%
5,5675,5675,5675,5675,5675,56766,8002.8%
00000000.0%
16,95820,34923,74123,74127,13227,132167,6087.1%
7967967967967967969,5520.4%
7507507507507507509,0000.4%
3203203203203203203,8400.2%
0002,000004,0000.2%
3,4963,3462,7462,8962,7462,50230,5001.3%
4,1504,1504,1504,1504,1504,15049,8002.1%
5005005005005005006,0000.3%
4,8935,8716,8506,8507,8287,82850,5302.2%
1,0561,0561,0561,0561,0561,05612,6720.5%
3843843843843843844,6080.2%
84984984984984984910,1880.4%
4504504504504504505,4000.2%
3,4503,4503,4503,4503,4503,45041,4001.8%
5905905905905905907,0800.3%
2525252525253000.0%
4174174174174174175,0000.2%
1081081081081081081,2960.1%
3144034034445005503,9810.2%
3504304304805205804,3500.2%
4004004004004004004,8000.2%
4,7505,7006,6506,6507,6007,60046,9492.0%
50,57155,91060,63062,87266,13766,003545,65423.2%
50,35865,71481,68979,44896,87797,011399,74417.0%
(111)(107)(103)(99)(94)(90)(1,052)0.0%
50,24765,60781,58779,34996,78396,921398,69217.0%
019,38335,89834,91442,58542,645175,4257.5%
50,24746,68945,68944,43654,19854,276223,2689.5%
21.6%16.6%14.0%13.6%14.6%14.6%9.5%
(71,802)(21,555)24,66970,358114,793168,992
(21,555)24,66970,358114,793168,992223,268

Projected Statement of Profit and Loss: Year 2

Qtr 1Qtr 2Qtr 3Qtr 4Total% Total
REVENUES
Gross Sales455,0001,001,0002,912,0002,639,0007,007,000100.0%
Less: Returns & Allowances9,10020,02058,24052,780140,1402.0%
NET REVENUES445,900980,9802,853,7602,586,2206,866,86098.0%
COST OF GOODS SOLD
Direct Materials225,000495,0001,440,0001,305,0003,465,00049.5%
Direct Labor10,06322,13864,40058,363154,9632.2%
Manufacturing Overhead34,07662,169160,494146,448403,1865.8%
TOTAL COST OF GOODS SOLD269,138579,3061,664,8941,509,8104,023,14957.4%
GROSS MARGIN176,762401,6741,188,8661,076,4102,843,71140.6%
GROSS MARGIN%79.1%81.7%83.3%83.2%327.3%0.0%
OPERATING EXPENSES
Admin Salaries & Wages19,96719,96719,96719,96779,8671.1%
Sales/Mktg Salaries & Wages4,0004,0009,0009,00026,0000.4%
Sales Commissions32,48771,471207,917188,425500,3007.1%
Payroll Taxes3,4273,4274,1424,14215,1390.2%
Employee Fringe Benefits3,0003,0003,5003,50013,0000.2%
Employee Training1,3001,3001,3001,3005,2000.1%
Trade Shows02,00002,0004,0000.1%
Advertising and Promotions6,5229,0719,1326,94931,6740.5%
Travel12,45012,45012,45012,45049,8000.7%
Entertainment3,2503,2503,2503,25012,9990.2%
Product R and D16,85337,077107,86297,750259,5423.7%
Rent5,7205,7205,7205,72022,8800.3%
Utilities2,0802,0802,0802,0808,3200.1%
General Business Insurance5,5185,5185,5185,51822,0720.3%
Telephone2,9252,9252,9252,92511,6990.2%
Postage and Freight22,42322,42322,42322,42389,6931.3%
Office Expense2,3602,3602,7532,75310,2270.1%
Dues and Subscriptions1001001171174330.0%
Legal and Accounting2,3542,0002,0002,0008,3540.1%
Licenses and Fees2162162162168640.0%
Depreciation1,3191,7062,1562,60611,7000.2%
Equipment Maintenance1,3901,7802,2402,70012,1000.2%
Vehicle Expense1,2001,2001,2001,2004,8000.1%
Bad Debts9,10020,02058,24052,780140,1402.0%
TOTAL OPERATING EXPENSES159,562234,661485,707451,3701,331,29919.0%
OPERATING INCOME (LOSS)17,200167,013703,159625,0401,512,41221.6%
INTEREST EXPENSE(164)(139)(114)(89)(505)0.0%
INCOME BEFORE INCOME TAXES17,036166,874703,045624,9511,511,90721.6%
INCOME TAXES9,39671,524309,340274,979665,2399.5%
NET INCOME (LOSS)7,64095,349393,705349,973846,66812.1%
NET INCOME (LOSS)%1.7%9.5%13.5%13.3%12.1%
RETAINED EARNINGS, BEGINNING223,268230,908326,257719,963
RETAINED EARNINGS, END230,908326,257719,9631,069,935

Projected Statement of Profit and Loss: Year 3

Qtr 1Qtr 2Qtr 3Qtr 4Total%Total
REVENUES
Gross Sales1,435,5002,262,0006,003,0006,438,00016,138,500100.0%
Less: Returns & Allowances28,71045,240120,060128,760322,7702.0%
NET REVENUES1,406,7902,216,7605,882,9406,309,24015,815,73098.0%
COST OF GOODS SOLD
Direct Materials742,5001,170,0003,105,0003,330,0008,347,50051.7%
Direct Labor33,20652,325138,863148,925373,3192.3%
Manufacturing Overhead91,755136,046336,519359,830924,1495.7%
TOTAL COST OF GOODS SOLD867,4611,358,3713,580,3813,838,7559,644,96859.8%
GROSS MARGIN539,329858,3892,302,5592,470,4856,170,76238.2%
GROSS MARGIN %76.6%77.2%78.3%78.3%310.3%0.0%
OPERATING EXPENSES
Admin Salaries & Wages22,17522,17522,17522,17588,7000.5%
Sales/Mktg Salaries & Wages13,59313,59313,59313,59354,3730.3%
Sales Commissions102,495161,507428,614459,6731,152,2897.1%
Payroll Taxes5,1155,1155,1155,11520,4590.1%
Employee Fringe Benefits4,5004,5004,5004,50018,0000.1%
Employee Training1,5001,5001,5001,5006,0000.0%
Trade Shows02,00002,0004,0000.0%
Advertising and Promotions7,6109,61011,61011,61040,4400.3%
Travel19,09019,09019,09019,09076,3600.5%
Entertainment9,0869,0869,0869,08636,3460.2%
Product R and D77,752122,519325,145348,707874,1225.4%
Rent11,00011,00011,00011,00044,0000.3%
Utilities4,0004,0004,0004,00016,0000.1%
General Business Insurance15,42915,42915,42915,42961,7150.4%
Telephone4,4004,4004,4004,40017,6000.1%
Postage and Freight32,00032,00032,00032,000128,0000.8%
Office Expense3,5403,5403,5403,54014,1600.1%
Dues and Subscriptions1501501501506000.0%
Legal and Accounting7,5727,5727,5727,57230,2880.2%
Licenses and Fees2162162162168640.0%
Depreciation3,1253,6924,2865,36716,4690.1%
Equipment Maintenance3,2303,8304,4505,48016,9900.1%
Vehicle Expense1,2001,2001,2001,2004,8000.0%
Bad Debts28,71045,240120,060128,760–0.0%
TOTAL OPERATING EXPENSES377,088502,5631,048,3321,115,7633,043,74618.9%
OPERATING INCOME (LOSS)162,240355,8261,254,2271,354,7233,127,01619.4%
INTEREST EXPENSE(64)(39)(14)11(105)0.0%
INCOME BEFORE INCOME TAXES162,177355,7871,254,2131,354,7343,126,91119.4%
INCOME TAXES71,358156,546551,854596,0831,375,8418.5%
NET INCOME (LOSS)90,819199,241702,359758,6511,751,07010.9%
NET INCOME (LOSS) %6.3%8.8%11.7%11.8%10.9%
RETAINED EARNINGS, BEGINNING1,069,9351,160,7541,359,9952,062,354
RETAINED EARNINGS, END1,160,7541,359,9952,062,3542,821,005

Projected Statement of Profit and Loss: Years 4 & 5

Year 4 Total%TotalYear 5 Total%Total
REVENUES
Gross Sales29,750,000100.0%31,875,000100.0%
Less: Returns & Allowances595,0002.0%638,0002.0%
NET REVENUES29,155,00098.0%31,238,00098.0%
COST OF GOODS SOLD
Direct Materials15,750,00052.9%16,875,00052.9%
Direct Labor910,0003.1%975,0003.1%
Manufacturing Overhead1,984,0006.7%2,118,0006.6%
TOTAL COST OF GOODS SOLD18,644,00062.7%19,968,00062.6%
GROSS MARGIN10,511,00035.3%11,270,00035.4%
OPERATING EXPENSES
Admin Salaries & Wages184,0000.6%221,0000.7%
Sales/Mktg Salaries & Wages94,0000.3%94,0000.3%
Sales Commissions2,124,0007.1%2,276,0007.1%
Payroll Taxes40,0000.1%45,0000.1%
Employee Fringe Benefits30,0000.1%36,0000.1%
Employee Training9,0000.0%10,0000.0%
Trade Shows4,0000.0%4,0000.0%
Advertising and Promotions90,0000.3%130,0000.4%
Travel123,0000.4%134,0000.4%
Entertainment60,0000.2%60,0000.2%
Product R and D1,488,0005.0%1,594,0005.0%
Rent84,0000.3%95,0000.3%
Utilities48,0000.2%54,0000.2%
General Business Insurance102,0000.3%117,0000.4%
Telephone30,0000.1%35,0000.1%
Postage and Freight210,0000.7%242,0000.8%
Office Expense22,0000.1%24,0000.1%
Dues and Subscriptions2,0000.0%2,0000.0%
Legal and Accounting30,0000.1%30,0000.1%
Licenses and Fees4,0000.0%4,0000.0%
Depreciation16,0000.1%34,0000.1%
Equipment Maintenance23,0000.1%30,0000.1%
Vehicle Expense12,0000.0%12,0000.0%
Bad Debts595,0002.0%638,0002.0%
TOTAL OPERATING EXPENSES5,422,00018.2%5,918,00018.6%
OPERATING INCOME (LOSS)5,089,00017.1%5,351,00016.8%
INTEREST EXPENSE00.0%00.0%
INCOME BEFORE INCOME TAXES5,089,00017.1%5,351,00016.8%
INCOME TAXES2,239,0007.5%2,355,0007.4%
NET INCOME (LOSS)2,850,0009.6%2,997,0009.4%
RETAINED EARNINGS, BEGINNINC4,186,0836,955,746
RETAINED EARNINGS, END6,955,7469,952,390

THIS PAGE INTENTIONALLY LEFT BLANK SEE NEXT PAGE FOR PROJECTED CASH FLOWS

Projected Statement of Cash Flows: Part 1

Oct 1992Oct 92Nov 92Dec 92Jan 92Feb 93
CASH FLOWS FROM OPERATIONS
Net Income(21,408)(45,291)(25,839)(24,939)10,56635,109
Adjustments to reconcile net income to cash flows from operations:
Depreciation & Amortization183183183272272272
Changes in certain assets and liabilities:
Accounts Receivable(6,783)(11,386)(10,514)(28,586)(72,820)(95,301)
Inventory(2,250)(1,800)(6,075)(15,300)(18,000)(11,250)
Accounts Payable16,4009,45092533,25054,67558,550
Payroll Taxes Payable958991(1,949)1,1061,361(2,467)
Income Taxes Payable000000
Revolving Line of Credit8,80010,00025,00035,00000
TOTAL FROM OPERATIONS(4,099)(37,853)(18,268)803(23,947)(15,086)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment(11,000)00(4,000)00
Pmnt of Patent Costs000000
Pmnt of Long-Term Deposits000000
TOTAL FROM INVESTING(11,000)00(4,000)00
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing on Long-Term Debt15,0000015,00000
Pmnts on Long-Term Debts(313)(313)(313)(625)(625)(625)
Sales of Common Stock10,00040,00015,00035,00000
Repayment of Line of Credit000000
TOTAL FROM FINANCING24,68839,68814,68849,375(625)(625)
NET CASH FLOWS9,5881,835(3,581)46,178(24,572)(15,711)
CASH, BEGINNING OF PERIOD09,58811,4237,84254,02129,449
CASH, END OF PERIOD9,58811,4237,84254,02129,44913,738
Mar 93Apr 93May 93Jun 93Jul 93Aug 93Sept 93Oct 93
50,224746,22445,68944,43654,19854,27611,95911,978
314403403444500550592661
(71,125)(64,439)(62,985)(14,535)(50,873)(12,113)106,71827,285
(11,250)(11,250)0(11,250)022,500022,500
54,25049,00031,25021,00024,500(10,750)(44,500)45,500)
1,7881,953(3,741)2,1172,282(4,399)3,0563,056
019,38316,515(985)7,67161(33,249)15
00000000
24,22441,27427,13141,22838,27850,12544,57519,996
(2,500)(4,000)0(2,500)(2,000)(3,000)(2,500)(2,500)
00000000
00000000
(2,500)(4,000)0(2,500)(2,000)(3,000)(2,500)(2,500)
00000000
(625)(625)(625)(625)(625)(625)(625)(625)
00000000
(10,000)(10,000)(10,000)(10,000)(10,000)(10,000)(10,000)(8,800)
(10,625)(10,625)(10,625)(10,625)(10,625)(10,625)(10,625)(9,425)
11,09926,64916,50628,10325,65336,50031,4508,071
13,73824,83751,48767,99296,095121,748158,249189,698
24,83751,48767,99296,095121,748158,249189,698197,769

Projected Statement of Cash Flows: Part 2

Nov 1993Dec 93Jan 1994Feb 94Mar 94
CASH FLOWS FROM OPERATIONS
Net Income(4,318)27,01962,36168,330139,674
Adjustments to reconcile net income to cash flows from operations:
Depreciation & Amortization728769853936994
Changes in certain assets and liabilities:
Accounts Receivable98,277(162,435)(273,819)(113,705)(487,305)
Inventory(45,000)(56,250)(11,250)(112,500)(135,000)
Accounts Payable1,500123,750167,750193,750371,750
Payroll Taxes Payable(6,112)3,3854,207(7,592)6,374
Income Taxes Payable(9,411)17,83631,1624,69056,056
Revolving Line of Credit00000
TOTAL FROM OPERATIONS35,663(45,925)(18,736)33,909(47,457)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment(4,000)(2,500)(3,000)(5,000)(3,500)
Pmnt of Patent Costs00000
Pmnt of Long-term Deposits00000
TOTAL FROM INVESTING(4,000)(2,500)(3,000)(5,000)(3,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on Long-Term Debt00000
Pmnts on Long-Term Debts(625)(625)(625)(625)(625)
Sales of Common Stock00000
Repayment of Line of Credit00000
TOTAL FROM FINANCING(625)(625)(625)(625)(625)
NET CASH FLOWS31,038(49,050)(22,361)28,284(51,582)
CASH, BEGINNING OF PERIOD197,769228,806179,757157,396185,680
CASH, END OF PERIOD228,806179,757157,396185,680134,098
Apr 94May 94Jun 94Jul 94Aug 94Sept 94Oct 94Nov 94
226,359254,031225,053182,874124,92065,99842,54624,820
1,0781,1611,2191,3031,3861,4441,5561,681
(675,266)(348,075)111,384315,588450,177240,363229,449184,161
(45,000)45,00067,50090,00022,50045,00033,750(33,750)
425,500181,500(112,000)(272,000)(268,500)(179,500)(147,250)(74,750)
8,347(14,721)8,3477,360(15,708)6,3415,683(12,025)
68,11021,743(22,769)(33,141)(45,536)(46,295)(18,427)(13,927)
00000000
9,128140,639278,735291,985269,239133,352147,30776,210
(3,000)(5,000)(3,500)(3,000)(5,000)(3,500)(4,000)(7,500)
00000000
00000000
(3,000)(5,000)(3,500)(3,000)(5,000)(3,500)(4,000)(7,500)
00000000
(625)(625)(625)(625)(625)(625)(625)(625)
00000000
00000000
(625)(625)(625)(625)(625)(625)(625)(625)
5,503135,014274,610288,360263,614129,227142,68268,085
134,098139,601274,615549,225837,5851,101,1991,230,4261,373,108
139,601274,615549,225837,5851,101,1991,230,4261,373,1081,441,193

Projected Statement of Cash Flows: Part 3

Dec 1994Jan 1995Feb 95
CASH FLOWS FROM OPERATIONS
Net Income41,12189,096158,120
Adjustments to reconcile net income to cash flows from operations:
Depreciation & Amortization1,7391,8281,953
Changes in certain assets and liabilities:
Accounts Receivable(90,959)(381,582)(627,836)
Inventory(90,000)(135,000)(202,500)
Accounts Payable123,250354,250566,500
Payroll Taxes Payable5,6836,999(12,682)
Income Taxes Payable12,80737,69554,233
Revolving Line of Credit000
TOTAL FROM OPERATIONS3,642(35,714)(62,212)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment(3,500)(4,000)(7,500)
Purchase of Patent Costs000
Pmnt of Long-Term Deposits000
TOTAL FROM INVESTING(3,500)(4,000)(7,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on Long-Term Debt000
Pmnts on Long-Term Debt(625)(625)(625)
Sales of Common Stock000
Repayment of Line of Credit000
TOTAL FROM FINANCING(625)(625)(625)
NET CASH FLOWS(483)(40,339)(70,337)
CASH, BEGINNING OF PERIOD1,441,1931,440,7101,400,371
CASH, END OF PERIOD1,440,7101,400,3711,330,034
Mar 95Apr 95May 95Jun 95Jul 95Aug 95
263,410357,090438,950460,964391,792297,687
2,0112,1502,2752,4812,5472,886
(949,518)(936,207)(838,593)(368,271)457,011834,156
(180,000)(157,500)(45,000)135,000180,0000
719,500717,500544,000116,500(408,500)(487,000)
11,93314,564(26,496)17,52415,550(33,074)
82,72873,60664,31817,297(54,349)(73,940)
000000
(49,937)71,202139,454381,494584,052540,715
(3,500)(5,000)(7,500)(9,000)(4,000)(17,000)
000000
000000
(3,500)(5,000)(7,500)(9,000)(4,000)(17,000)
000000
(625)(625)(625)(625)(625)(625)
000000
000000
(625)(625)(625)(625)(625)(625)
(54,062)65,577131,329371,869579,427523,090
1,330,0341,275,9721,341,5491,472,8781,844,7472,424,174
1,275,9721,341,5491,472,8781,844,7472,424,1742,947,265

Risk and Contingency

Summary


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