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 Table of Contents

1.0 Executive Summary.....................................................................................................................1

Chart: Highlights...........................................................................................................................1
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Start-up Summary....................................................................................................................2
Table: Start-up..............................................................................................................................2
Table: Start-up Funding.............................................................................................................3
Chart: Start-up..............................................................................................................................4
3.0 Products............................................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................4
4.1 Market Segmentation..............................................................................................................4
Table: Market Analysis................................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................5
4.2 Industry Analysis.......................................................................................................................5
4.3 Target Market Segment Strategy.......................................................................................6
4.4 Competition and Buying Patterns.......................................................................................6
5.0 Strategy and Implementation Summary.............................................................................6
5.1 Competitive Edge......................................................................................................................6
5.2 Sales Forecast............................................................................................................................7
Chart: Sales Monthly...................................................................................................................7
Chart: Sales by Year....................................................................................................................7
Table: Sales Forecast..................................................................................................................8
5.3 Milestones....................................................................................................................................8
Chart: Milestones..........................................................................................................................8
Table: Milestones..........................................................................................................................8
5.4 Marketing Strategy...................................................................................................................9
6.0 Management Summary...............................................................................................................9
6.1 Personnel Plan............................................................................................................................9
Table: Personnel............................................................................................................................9
7.0 Financial Plan................................................................................................................................10
7.1 Break-even Analysis...............................................................................................................10
Chart: Break-even Analysis....................................................................................................10
Table: Break-even Analysis....................................................................................................10
7.2 Projected Profit and Loss......................................................................................................11
7.2 Projected Profit and Loss......................................................................................................11
Table: Profit and Loss................................................................................................................11
Chart: Profit Monthly.................................................................................................................12
Chart: Profit Yearly.....................................................................................................................12
Chart: Gross Margin Monthly.................................................................................................13
Chart: Gross Margin Yearly.....................................................................................................13
7.3 Projected Cash Flow...............................................................................................................13
Chart: Cash...................................................................................................................................14

Page 1
 Table of Contents

Table: Cash Flow.........................................................................................................................14

7.4 Projected Balance Sheet......................................................................................................16
7.4 Projected Balance Sheet......................................................................................................16
Table: Balance Sheet.................................................................................................................16
7.5 Business Ratios........................................................................................................................17
7.5 Business Ratios........................................................................................................................17
Table: Ratios.................................................................................................................................17
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

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 D.A.P. Exports

1.0 Executive Summary

D.A.P. Exports is a business that exports automobile parts and auto lubricants to Jamaica and
other countries including Venezuela, Columbia and Ecuador. Many of the company's shipments
combine American-made products with foreign parts with some re-packaging and labeling.

Auto part sales is currently a $100 million industry in Latin America and the Caribbean. In these
countries, a majority of the automobiles were manufactured in the 1980's. Finding replacement
parts for these autos has become a difficult process as auto makers focus on cars produced in
the last ten years.

D.A.P. Exports has established an extensive network of customer contacts in the region. James
Dunn, owner of D.A.P Exports, has twenty years of experience selling consumer products in
Latin America and the Caribbean. James has been a salesperson for Axiom Food Products,
Klymor Manufacturing, and Dudley Food Products.

During those years, James used taxi services in Latin America and the Caribbean. It was during
one of those trips that he became aware of the demand for auto parts and auto lubricants.
James also discovered the best distribution system for auto products in the region, through the
local taxi companies.

D.A.P. Exports will contract with the region's taxi companies to provide auto parts and auto
lubricants at wholesale prices. The taxi companies will either use the parts to repair their own
vehicles or they will sell the parts to consumers. D.A.P Exports will also sell auto parts to auto
part stores in the region.

Chart: Highlights

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 D.A.P. Exports

1.1 Objectives

D.A.P. Exports' objectives are as follows:

 Achieve handsome sales revenues during first year of operation.

 Achieve a customer base of 100 taxi companies in the region.
 Increase sales modestly during the second year of operation.

1.2 Mission

The mission of D.A.P. Exports is to be the auto parts provider of choice with the region's taxi
companies.

2.0 Company Summary

D.A.P. Exports is a business that exports automobile parts and auto lubricants to Jamaica and
other countries including Venezuela, Columbia and Ecuador. Many of the company's shipments
combine American-made products with foreign parts with some re-packaging and labeling.

The company will be organized as a limited liability partnership.

D.A.P. Exports has an 8,000 square foot facility in Monroe, Florida. The facility is located near
the South Florida transportation hub critical to our important markets. it will keep costs in
control as well as enabling fast and economical access to our key markets for company-related
business.

2.1 Company Ownership

D.A.P. Exports is an LLC partnership owned by James Dunn and a silent partner (name
withheld).

2.2 Start-up Summary

The start-up expense for D.A.P. Exports is focused primarily on inventory and repackaging
equipment. James Dunn will personally invest in the company. The silent partner will invest
additional funds. In addition, Dunn will also secure a long-term loan.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $10,000
Stationery etc. $1,000
Brochures $2,000
Insurance $2,000
Rent $2,000
Expensed Equipment $50,000
Total Start-up Expenses $67,000

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 D.A.P. Exports

Start-up Assets
Cash Required $83,000
Start-up Inventory $100,000
Other Current Assets $0
Long-term Assets $0
Total Assets $183,000

Total Requirements $250,000

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $67,000
Start-up Assets to Fund $183,000
Total Funding Required $250,000

Assets
Non-cash Assets from Start-up $100,000
Cash Requirements from Start-up $83,000
Additional Cash Raised $0
Cash Balance on Starting Date $83,000
Total Assets $183,000

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000

Capital

Planned Investment
James Dunn $50,000
Silent Partner $100,000
Additional Investment Requirement $0
Total Planned Investment $150,000

Loss at Start-up (Start-up Expenses) ($67,000)

Total Capital $83,000

Total Capital and Liabilities $183,000

Total Funding $250,000

Page 3
 D.A.P. Exports

Chart: Start-up

3.0 Products

D.A.P. Exports' products are the following:

 Transmission parts
 Engine parts
 Electrical parts
 Engine lubricants

4.0 Market Analysis Summary

Auto part sales is a $100 million dollar industry in Latin America and the Caribbean. In these
countries, a majority of the automobiles were manufactured in the 1980s. Finding replacement
parts for these autos has become a difficult process as auto makers focus on cars produced in
the last ten years.

Typically, old cars are used as a source of parts once they can no longer be repaired. The major
obstacle to accessing the market is the sparse number of auto part stores in the region where
the prices for auto parts are high. Most of these auto stores focus on the upscale customer and
don't carry a wide range of parts for the older autos.

D.A.P. Exports will sell parts to auto stores but we will also pursue a new distribution network
as well. The largest buyers of auto parts in the region are taxi companies. D.A.P. Exports has
established an extensive network of contacts with these companies, and we will sell directly to
them.

4.1 Market Segmentation

D.A.P. Exports will focus on the following target customers:

Page 4
 D.A.P. Exports

 Taxi companies
 Auto part stores

It is expected that individuals will also purchase from D.A.P., but the repeat business, lower
price sensitivity and larger volume per order mean that stores and taxi services will be more
attractive customers for D.A.P.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Taxi Companies 10% 2,000 2,200 2,420 2,662 2,928 10.00%
Auto Part Stores 8% 4,000 4,320 4,666 5,039 5,442 8.00%
Total 8.68% 6,000 6,520 7,086 7,701 8,370 8.68%

Chart: Market Analysis (Pie)

4.2 Industry Analysis

Currently, the markets are too small to attract many competitors. The auto parts shops in the
region are not expanding to meet the demand for parts for older cars. They are instead
focusing on the newer cars that are being imported into the countries by wealthy individuals.

Utilizing the taxi services as a distribution network as well as primary customers is an excellent
strategy to capture market share of a segment that is currently being ignored by bigger
players.

Page 5
 D.A.P. Exports

4.3 Target Market Segment Strategy

It is estimated that there are over 25,000 vehicles in the region that are used by taxi services.
And that number is growing.

The taxi firms are excellent target customers for D.A.P. Export products. First, they represent
the largest buying block in our target countries. In addition there is no established channel for
them to purchase parts for their cars at this time.

By buying direct from D.A.P. Export, they reduce the cost of parts and they get exactly what
they need quickly.

Although many of the taxi drivers are independent or work for small companies, the informal
network within this group is extensive. There is a lot of downtime in this business, where
drivers are waiting for fares. They will chat to friends/colleagues about their cars and their
work. We will benefit from this through word-of-mouth recommendations.

4.4 Competition and Buying Patterns

Without much competition, the key to maintaining the customer base is the right parts, at a
reasonable price, delivered quickly. As D.A.P. Exports meets customer's demand for parts in a
timely manner, sales will grow. The company will be able to strengthen the business
relationships that will be critical when competition does emerge.

5.0 Strategy and Implementation Summary

D.A.P. Exports will offer a 15% discount on all purchases of $1,000 or more. We will also
have two salespeople based in Latin America and the Caribbean. Our focus will be to establish
our future on a strong relationship with the region's taxi services.

James has established export contacts in Latin America and the Caribbean, that will make the
process of developing an export channel for car parts much easier. In these countries, much
business in done by a handshake and word of mouth, rather than formal contracts. His
experience and contacts will be invaluable in this environment.

5.1 Competitive Edge

The products that D.A.P is selling are made for older cars, and the trend in this country is
towards newer cars, therefore domestic demand for these parts is falling. For this reason,
James will be able to negotiate excellent prices on the products that he will sell. He will also
order in bulk which will further increase his negotiating leverage.

The other competitive edge of D.A.P. Exports is that we can assemble a product package that is
exactly what a specific customer wants. When the taxi service buys directly from D.A.P.
Exports, they will receive the highest quality product at the lowest price. Previously, because of
the lack of an organized, established channel, car owners had to spend time shopping around
for parts. Therefore their cars would be off the road for longer periods of time--every day
costing them more lost revenue.

Page 6
 D.A.P. Exports

5.2 Sales Forecast

The following is the sales forecast for three years.

Chart: Sales Monthly

Chart: Sales by Year

Page 7
 D.A.P. Exports

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Auto Parts $410,000 $480,000 $550,000
Auto Lubricants $186,000 $230,000 $274,000
Other $0 $0 $0
Total Sales $596,000 $710,000 $824,000

Direct Cost of Sales Year 1 Year 2 Year 3

Auto Parts $200,000 $240,000 $275,000
Auto Lubricants $93,000 $115,000 $137,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $293,000 $355,000 $412,000

5.3 Milestones

The accompanying chart and table lists important program milestones, with dates and
managers in charge, and budgets for each. The milestone schedule indicates our emphasis on
planning for implementation.

Chart: Milestones

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Facility Set-up 5/1/2002 5/20/2002 $20,000 James Dunn Marketing
Page 8
 D.A.P. Exports

Inventory Set-up 5/1/2002 5/20/2002 $100,000 James Dunn Department

Marketing Campaign 5/1/2002 6/15/2002 $20,000 James Dunn Department
Totals $140,000

5.4 Marketing Strategy

During the months of May and June the regional salespeople will deliver presentations to taxi
firms and auto parts stores in the region. D.A.P. Export will offer a 15% discount on all
purchases over $1,000.

The key to the marketing strategy is continuous follow-up with customers so we can anticipate
the parts inventory that will be needed in the future.

6.0 Management Summary

James Dunn, owner of D.A.P Exports, will manage the business. He has twenty years of
experience selling consumer products in Latin America and the Caribbean, so has extensive
knowledge of this region and culture. In addition he has contacts with people and businesses
that can only be gained from years of living or working in a country. James has been a
salesperson for Axiom Food Products, Klymor Manufacturing, and Dudley Food Products, and
during this time travelled to the Caribbean and Latin America at least three times a year.

James has excellent management skills. In his last position he managed a sales staff of five
people, and each year the team beat its sales quota by more than 10%. He was successful in
motivating the best performance of each staff member.

James has also had experience in running a small business in the past. He and his wife have
successfully run a small catering business in their hometown for the past four years. James wife
will continue to run this business while he focuses on launching D.A.P. Exports.

6.1 Personnel Plan

D.A.P. Exports' personnel are as follows:

 James Dunn
 Facility staff (4)
 Sales staff (2)

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
James Dunn $36,000 $39,000 $42,000
4 Facility Staff $86,400 $94,000 $102,000
2 Sales Staff $72,000 $80,000 $88,000
Total People 7 7 7

Total Payroll $194,400 $213,000 $232,000

Page 9
 D.A.P. Exports

7.0 Financial Plan

The following is the financial plan for D.A.P. Exports.

7.1 Break-even Analysis

The monthly break-even point, based on average monthly running costs and estimated variable
costs of sales is shown in the table and chart below.

Chart: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $42,743

Assumptions:
Average Percent Variable Cost 49%
Estimated Monthly Fixed Cost $21,730

Page 10
 D.A.P. Exports

7.2 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $596,000 $710,000 $824,000
Direct Cost of Sales $293,000 $355,000 $412,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $293,000 $355,000 $412,000

Gross Margin $303,000 $355,000 $412,000

Gross Margin % 50.84% 50.00% 50.00%

Expenses
Payroll $194,400 $213,000 $232,000
Sales and Marketing and Other Expenses $6,000 $10,000 $15,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $7,200 $8,000 $9,000
Insurance $0 $0 $0
Rent $24,000 $24,000 $24,000
Payroll Taxes $29,160 $31,950 $34,800
Other $0 $0 $0

Total Operating Expenses $260,760 $286,950 $314,800

Profit Before Interest and Taxes $42,240 $68,050 $97,200

EBITDA $42,240 $68,050 $97,200
Interest Expense $10,000 $10,000 $10,000
Taxes Incurred $9,672 $17,415 $26,160

Net Profit $22,568 $40,635 $61,040

Net Profit/Sales 3.79% 5.72% 7.41%

Page 11
 D.A.P. Exports

Chart: Profit Monthly

Chart: Profit Yearly

Page 12
 D.A.P. Exports

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Page 13
 D.A.P. Exports

Chart: Cash

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $149,000 $177,500 $206,000
Cash from Receivables $324,550 $509,078 $594,578
Subtotal Cash from Operations $473,550 $686,578 $800,578

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $473,550 $686,578 $800,578

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $194,400 $213,000 $232,000
Bill Payments $265,680 $510,321 $535,986
Subtotal Spent on Operations $460,080 $723,321 $767,986

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Page 14
 D.A.P. Exports

Subtotal Cash Spent $460,080 $723,321 $767,986

Net Cash Flow $13,470 ($36,743) $32,592

Cash Balance $96,470 $59,727 $92,320

Page 15
 D.A.P. Exports

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $96,470 $59,727 $92,320
Accounts Receivable $122,450 $145,872 $169,293
Inventory $46,200 $80,972 $90,014
Other Current Assets $0 $0 $0
Total Current Assets $265,120 $286,570 $351,627

Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $265,120 $286,570 $351,627

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $59,552 $40,367 $44,384
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $59,552 $40,367 $44,384

Long-term Liabilities $100,000 $100,000 $100,000

Total Liabilities $159,552 $140,367 $144,384

Paid-in Capital $150,000 $150,000 $150,000

Retained Earnings ($67,000) ($44,432) ($3,797)
Earnings $22,568 $40,635 $61,040
Total Capital $105,568 $146,203 $207,243
Total Liabilities and Capital $265,120 $286,570 $351,627

Net Worth $105,568 $146,203 $207,243

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 D.A.P. Exports

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 5013, Moter Vehicles Supplies and New Parts, are
shown for comparison.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 19.13% 16.06% 12.20%

Percent of Total Assets

Accounts Receivable 46.19% 50.90% 48.15% 25.10%
Inventory 17.43% 28.26% 25.60% 46.10%
Other Current Assets 0.00% 0.00% 0.00% 15.10%
Total Current Assets 100.00% 100.00% 100.00% 86.30%
Long-term Assets 0.00% 0.00% 0.00% 13.70%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 22.46% 14.09% 12.62% 46.60%

Long-term Liabilities 37.72% 34.90% 28.44% 11.50%
Total Liabilities 60.18% 48.98% 41.06% 58.10%
Net Worth 39.82% 51.02% 58.94% 41.90%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.84% 50.00% 50.00% 21.70%
Selling, General & Administrative Expenses 47.05% 44.28% 42.59% 13.20%
Advertising Expenses 1.01% 1.41% 1.82% 0.70%
Profit Before Interest and Taxes 7.09% 9.58% 11.80% 1.40%

Main Ratios
Current 4.45 7.10 7.92 1.98
Quick 3.68 5.09 5.89 0.78
Total Debt to Total Assets 60.18% 48.98% 41.06% 58.10%
Pre-tax Return on Net Worth 30.54% 39.71% 42.08% 3.80%
Pre-tax Return on Assets 12.16% 20.26% 24.80% 9.00%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 3.79% 5.72% 7.41% n.a
Return on Equity 21.38% 27.79% 29.45% n.a

Activity Ratios
Accounts Receivable Turnover 3.65 3.65 3.65 n.a
Collection Days 56 92 93 n.a
Inventory Turnover 5.31 5.58 4.82 n.a
Accounts Payable Turnover 5.46 12.17 12.17 n.a
Payment Days 28 37 29 n.a
Total Asset Turnover 2.25 2.48 2.34 n.a

Debt Ratios
Debt to Net Worth 1.51 0.96 0.70 n.a
Current Liab. to Liab. 0.37 0.29 0.31 n.a

Liquidity Ratios
Net Working Capital $205,568 $246,203 $307,243 n.a
Interest Coverage 4.22 6.81 9.72 n.a

Additional Ratios
Assets to Sales 0.44 0.40 0.43 n.a

Page 17
 D.A.P. Exports

Current Debt/Total Assets 22% 14% 13% n.a

Acid Test 1.62 1.48 2.08 n.a
Sales/Net Worth 5.65 4.86 3.98 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Page 18
 Appendix

Table: Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Auto Parts 0% $0 $0 $20,000 $26,000 $30,000 $36,000 $40,000 $44,000 $48,000 $50,000 $56,000 $60,000
Auto Lubricants 0% $0 $0 $8,000 $12,000 $12,000 $16,000 $20,000 $20,000 $24,000 $24,000 $26,000 $24,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $0 $28,000 $38,000 $42,000 $52,000 $60,000 $64,000 $72,000 $74,000 $82,000 $84,000

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Auto Parts $0 $0 $10,000 $13,000 $15,000 $18,000 $20,000 $22,000 $24,000 $25,000 $23,000 $30,000
Auto Lubricants $0 $0 $4,000 $6,000 $6,000 $8,000 $10,000 $10,000 $12,000 $12,000 $13,000 $12,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $36,000 $42,000

Page 1
 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
James Dunn 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
4 Facility Staff 0% $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200
2 Sales Staff 0% $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Total People 7 7 7 7 7 7 7 7 7 7 7 7

Total Payroll $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200

Page 2
 Appendix

Table: General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $0 $0 $28,000 $38,000 $42,000 $52,000 $60,000 $64,000 $72,000 $74,000 $82,000 $84,000
Direct Cost of Sales $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $36,000 $42,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $36,000 $42,000

Gross Margin $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $46,000 $42,000
Gross Margin % 0.00% 0.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 56.10% 50.00%

Expenses
Payroll $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200
Sales and Marketing and Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Expenses
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll Taxes 15% $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430 $2,430
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730 $21,730

Profit Before Interest and Taxes ($21,730) ($21,730) ($7,730) ($2,730) ($730) $4,270 $8,270 $10,270 $14,270 $15,270 $24,270 $20,270
EBITDA ($21,730) ($21,730) ($7,730) ($2,730) ($730) $4,270 $8,270 $10,270 $14,270 $15,270 $24,270 $20,270
Interest Expense $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833
Taxes Incurred ($6,769) ($6,769) ($2,569) ($1,069) ($469) $1,031 $2,231 $2,831 $4,031 $4,331 $7,031 $5,831

Net Profit ($15,794) ($15,794) ($5,994) ($2,494) ($1,094) $2,406 $5,206 $6,606 $9,406 $10,106 $16,406 $13,606
Net Profit/Sales 0.00% 0.00% -21.41% -6.56% -2.61% 4.63% 8.68% 10.32% 13.06% 13.66% 20.01% 16.20%

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 Appendix

Table: Cash Flow

Pro Forma Cash Flow

Month 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 Operations

Cash Sales $0 $0 $7,000 $9,500 $10,500 $13,000 $15,000 $16,000 $18,000 $18,500 $20,500 $21,000
Cash from Receivables $0 $0 $0 $700 $21,250 $28,600 $31,750 $39,200 $45,100 $48,200 $54,050 $55,700
Subtotal Cash from Operations $0 $0 $7,000 $10,200 $31,750 $41,600 $46,750 $55,200 $63,100 $66,700 $74,550 $76,700

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $7,000 $10,200 $31,750 $41,600 $46,750 $55,200 $63,100 $66,700 $74,550 $76,700

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 Operations

Cash Spending $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200
Bill Payments ($406) ($798) ($266) $3,844 $5,314 $6,231 $16,894 $43,008 $43,641 $50,728 $48,778 $48,711
Subtotal Spent on Operations $15,794 $15,402 $15,934 $20,044 $21,514 $22,431 $33,094 $59,208 $59,841 $66,928 $64,978 $64,911

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $15,794 $15,402 $15,934 $20,044 $21,514 $22,431 $33,094 $59,208 $59,841 $66,928 $64,978 $64,911

Net Cash Flow ($15,794) ($15,402) ($8,934) ($9,844) $10,236 $19,169 $13,656 ($4,008) $3,259 ($228) $9,572 $11,789

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 Appendix
Cash Balance $67,206 $51,803 $42,869 $33,025 $43,260 $62,429 $76,085 $72,077 $75,336 $75,109 $84,681 $96,470

Table: Balance Sheet

Pro Forma Balance Sheet

Month 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 Assets
Cash $83,000 $67,206 $51,803 $42,869 $33,025 $43,260 $62,429 $76,085 $72,077 $75,336 $75,109 $84,681 $96,470
Accounts Receivable $0 $0 $0 $21,000 $48,800 $59,050 $69,450 $82,700 $91,500 $100,400 $107,700 $115,150 $122,450
Inventory $100,000 $100,000 $100,000 $86,000 $67,000 $46,000 $28,600 $33,000 $35,200 $39,600 $40,700 $39,600 $46,200
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $183,000 $167,206 $151,803 $149,869 $148,825 $148,310 $160,479 $191,785 $198,777 $215,336 $223,509 $239,431 $265,120

Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $183,000 $167,206 $151,803 $149,869 $148,825 $148,310 $160,479 $191,785 $198,777 $215,336 $223,509 $239,431 $265,120

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 Liabilities
Accounts Payable $0 $0 $392 $4,452 $5,902 $6,482 $16,245 $42,345 $42,732 $49,885 $47,952 $47,469 $59,552
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $0 $392 $4,452 $5,902 $6,482 $16,245 $42,345 $42,732 $49,885 $47,952 $47,469 $59,552

Long-term Liabilities $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Total Liabilities $100,000 $100,000 $100,392 $104,452 $105,902 $106,482 $116,245 $142,345 $142,732 $149,885 $147,952 $147,469 $159,552

Paid-in Capital $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000
Retained Earnings ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000) ($67,000)
Earnings $0 ($15,794) ($31,589) ($37,583) ($40,077) ($41,172) ($38,766) ($33,560) ($26,955) ($17,549) ($7,443) $8,962 $22,568
Total Capital $83,000 $67,206 $51,411 $45,417 $42,923 $41,828 $44,234 $49,440 $56,045 $65,451 $75,557 $91,962 $105,568
Total Liabilities and Capital $183,000 $167,206 $151,803 $149,869 $148,825 $148,310 $160,479 $191,785 $198,777 $215,336 $223,509 $239,431 $265,120

Net Worth $83,000 $67,206 $51,411 $45,417 $42,923 $41,828 $44,234 $49,440 $56,045 $65,451 $75,557 $91,962 $105,568

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