7.

0 Financial Plan

Although we are treating our business as a start-up company, we have taken actual Profit &
Loss income and expenses of a same category company from the past three years, and eliminated
corporate overhead expenses such as warehouse and administrative costs, inventory penalties,
and corporate nominal interest. We then projected income based on actual past performance,
and factored back in the revenue base over the past two.

We approached the financial planning from a conventional standpoint, and based on those
numbers on achievable gross margins. In addition, our actual interest and tax rates will most
likely be lower than the assumed rates due to our business being structured as an employee-
owned company under Employee Stock Ownership Plan.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in Table # 7. As
mentioned previously, we assumed interest and tax rates based on a "worst case" scenario, and
these will be adjusted when we have finalized the initial funding and establish the Employee
Stock Ownership Plan. We have also assumed our personnel burden at 30% of payroll in order to
allow for above-average benefits for our employees. As we shop around for benefits dealers, this
assumption will be subject to revision as well.

Other key business assumptions are:

 We assume continued steady economic growth in the Addis Ababa city as predicted by
the Economists.
 We assume the continued move towards convergence technology in the Information
company
 We assume access to the start-up funding necessary to re-shape and re-build the
company, and to provide adequate initial capitalization.

Table # 7: General Assumptions

Year 1 Year 2 Year 3
Plan Month 1 2 3

anew 1
 Current Interest Rate 8.5% 8.5%% 8.5%
Long-term Interest Rate 8.5%% 8.5% 8.5%
Tax Rate 35% 35% 35%
Other 0 0 0

7.2 Key Financial Indicators

As shown in the Benchmark chart below, our key financial indicators are:

(1) Projected Sales: Projections are based on actual past performance, and are conservative.
We will increase sales at an average rate of 15% per year.
(2) Gross Margins: Average gross margins are based on TVET Management system
software= 37%, Consultancy service = 57%, Website design development = 52% and
other = 50%, for an overall operating gross margin of 49%.
(3) Operating Expenses: Operating expenses are based on providing our employee-owners
with above average wages and benefits, and providing superior customer service.
Expenses are projected to increase at the rate of 6% per year.
(4) Collection Days (A/R): Based on the extensive use of leasing, and including service and
supply agreements into leasing packages, we will maintain an average A/R turnover of 30
days. This is projected to be reduced to 28 days in subsequent years by increasing
efficiencies in our internal business processes.
(5) Inventory Turnover: We will maintain just-in-time inventory levels, or 11 turns per
year. This will require accurate sales forecasting, and working closely with our
manufacturers.

anew 2
 Figure # 6: Benchmarks.

7.3 Break-even Analysis

For our break-even analysis, we assume running costs, which include our full payroll, rent, and
utilities, and an estimation of other running costs. Payroll alone, at present, is about 45,500.00
per month (including benefits and taxes).

We will monitor gross margins very closely, and maintain them at a midrange percentage by
taking advantage of all promotions and discounts offered by our manufacturers. We will try to
get "end column" pricing as a new dealer incentive from our client company.

The chart shows what we need to sell per month to break even, according to these assumptions.
This is about 78% of our projected sales for our first year, and is well below what we have
achieved annually over the past three years under more adverse operating conditions.

anew 3
 Figure # 7: Break Even Analysis.

Table # 8: Break-even Analysis

Monthly Revenue Break-even 2,09,018.00

Assumptions:
Average Percent Variable Cost 52%
Estimated Monthly Fixed Cost 1,01,932.00

7.4 Projected Profit and Loss

Our Pro Forma Profit and Loss statement was constructed from a conservative point-of-view,
and is based in large part on past performance of a same category company. By strengthening
our service position, and rebuilding our customer relationships, we will widen our customer base
and increase sales.

Month-to-month assumptions for profit and loss are included in the appendix

Figure # 8: Profit Yearly.

anew 4
 Figure # 9: Gross Margin Monthly.

Figure # 10: Gross Margin Yearly.

anew 5
 Figure # 11: Profit Monthly.

Table # 9: Profit and Loss

Year 1 Year 2 Year 3
Sales 305,465 366,558 439,870
Direct Cost of Sales 156,492 187,790 225,348
Production Payroll 0 0 0
Other 0 0 0
Total Cost of Sales 156,492 187,790 225,348
Gross Margin 148,973 178,768 214,521
Gross Margin % 48.77% 48.77% 48.77%
Operating Expenses 0 0 0
Sales and Marketing Expenses 0 0 0
Sales and Marketing Payroll 153,000 183,600 220,320
Advertising/Promotion 10,500 12,600 15,120
Commissions 159,518 191,422 229,706
Travel - Sales 22,500 27,000 32,400
Learning & Growth - Sales 6,150 7,380 8,856
Entertainment 5,400 6,480 7,776
Total Sales and Marketing Expenses 357,068 428,482 514,178
Sales and Marketing % 1 1 1
General and Administrative Expenses 0 0 0
General and Administrative Payroll 134,400 161,280 193,536

anew 6
Sales and Marketing and Other Expenses 0 0 0
Depreciation 0 0 0
Depreciation 0 0 0
Utilities 9,000 10,800 12,960
Telephone & ISP 34,200 41,040 49,248
Office Supplies 4,200 5,040 6,048
Insurance 16,800 20,160 24,192
Bank Charges 6,000 7,200 8,640
Postage 10,020 12,024 14,429
Taxes & Licenses 10,200 12,240 14,688
Bonuses 0 0 0
Learning & Growth - Admin 3,150 3,780 4,536
Accounting 6,000 7,200 8,640
Rent 72,000 86,400 103,680
Payroll Taxes 181,350 217,620 261,144
Other General and Administrative Expenses 0 0 0
Total General and Administrative Expenses 487,320 584,784 701,741
General and Administrative % 159.53% 159.53% 159.53%
Other Expenses: 0 0 0
Other Payroll 317,100 380,520 456,624
Consultants 0 0 0
Learning & Growth - Service 9,200 11,040 13,248
Travel - Service 22,500 27,000 32,400
Freight & Cartage 30,000 36,000 43,200
Total Other Expenses 378,800 454,560 545,472
Other % 124.01% 124.01% 124.01%
Total Operating Expenses 1,223,188 1,467,826 1,761,391
Profit Before Interest and Taxes 332,644 399,173 479,007
EBITDA/EBITDA/Earnings before interest, taxes,
depreciation
332,647 399,176 479,012
Interest Expense 140,004 168,005 201,606
Taxes Incurred 72,797 87,356 104,828
Net Profit 119,846 143,815 172,578
Net Profit/Sales 39.23% 39.23% 39.23%

7.5 Cash Flow

Because we are treating the new company as a start-up, the cash flow for benchmark company is
somewhat exaggerated by the instant influx of new capital. Subsequent years however show a

anew 7
healthy growth in cash flow, mainly due to the short 60-month repayment of the start-up loan
and increased sales.

Figure # 12: Cash.

Table # 10 Cash Flow

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales 2,073,716 2,488,459 2,986,151
Cash from Receivables 906,354 1,087,625 1,305,150
Subtotal Cash from Operations 2,980,070 3,576,084 4,291,301
Additional Cash Received 0 0 0
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 30,000 36,000 43,200
Subtotal Cash Received 3,010,070 3,612,084 4,334,501
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations 0 0 0
Cash Spending 604,500 725,400 870,480
Bill Payments 2,210,316 2,652,379 3,182,855

anew 8
Subtotal Spent on Operations 2,814,816 3,377,779 4,053,335
Additional Cash Spent 0 0 0
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
Subtotal Cash Spent 2,814,816 3,377,779 4,053,335
Net Cash Flow 195,254 234,305 281,166
Cash Balance 6,571,091 7,885,309 9,462,371

7.6 Balance Sheet

The Projected Balance Sheet is quite solid. We do not project any trouble meeting our debt
obligations as long as we achieve our specific objectives.

Table # 11 Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash 7,029,399 8,435,279 10,122,335
Accounts Receivable 2,092,662 2,511,194 3,013,433
Inventory 1,997,949 2,397,539 2,877,047
Other Current Assets 0 0 0
Total Current Assets 11,120,010 13,344,012 16,012,814
Long-term Assets 0 0 0
Long-term Assets 0 0 0
Accumulated Depreciation 0 0 0
Total Long-term Assets 0 0 0
Total Assets 11,120,010 13,344,012 16,012,814
Liabilities and Capital
Current Liabilities 0 0 0
Accounts Payable 2,356,850 2,828,220 3,393,864
Current Borrowing 20,800,000 24,960,000 29,952,000
Other Current Liabilities 0 0 0
Subtotal Current Liabilities 23,156,850 27,788,220 33,345,864
Long-term Liabilities 0 0 0

anew 9
Total Liabilities 23,156,850 27,788,220 33,345,864
Paid-in Capital 360,000 432,000 518,400
Retained Earnings -15,232,750 -18,279,300 -21,935,160
Earnings 544,843 653,812 784,574
Total Capital -14,327,907 -17,193,488 -20,632,186
Total Liabilities and Capital 8,828,943 10,594,732 12,713,678
Net Worth -12,036,840 -14,444,208 -17,333,050

7.7 Business Ratios

The following table shows our main business ratios, and is compared to industry averages.

Table # 12 Ratio Analysis

Year 1 Year 2 Year 3 Industry Avg.
Sales Growth 0.00% 15.00% 15.00% 1.50%
Percent of Total Assets
Accounts Receivable 26.20% 28.10% 25.75% 30.97%
Inventory 21.45% 22.81% 20.72% 38.08%
Other Current Assets 0.00% 0.00% 0.00% 16.04%
Total Current Assets 100.00% 100.00% 100.00% 85.09%
Long-term Assets 0.00% 0.00% 0.00% 14.91%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 152.97% 121.58% 80.64% 44.30%
Long-term Liabilities 0.00% 0.00% 0.00% 8.46%
Total Liabilities 152.97% 121.58% 80.64% 52.76%
Net Worth -52.97% -21.58% 19.36% 47.24%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 48.77% 49.21% 49.65% 26.76%
Selling, General & Administrative Expenses 45.02% 42.69% 40.40% 15.95%
Advertising Expenses 0.33% 0.30% 0.28% 0.95%
Profit Before Interest and Taxes 10.43% 13.99% 17.29% 2.55%

Main Ratios
Current 0.65 0.82 1.24 1.8
Quick 0.51 0.63 0.98 0.87
Total Debt to Total Assets 152.97% 121.58% 80.64% 6.22%
Pre-tax Return on Net Worth -45.31% -208.01% 301.35% 55.95%
Pre-tax Return on Assets 24.00% 44.89% 58.33% 14.11%

Additional Ratios Year 1 Year 2 Year 3

anew 10
Net Profit Margin 3.76% 6.53% 9.35% n.a
Return on Equity 0.00% 0.00% 188.85% n.a
Activity Ratios
Accounts Receivable Turnover 5.31 5.31 5.31 n.a
Collection Days 57 64 64 n.a
Inventory Turnover 10.91 10.12 10.12 n.a
Accounts Payable Turnover 10.7 12.17 12.17 n.a
Payment Days 27 30 28 n.a
Total Asset Turnover 3.97 4.26 3.91 n.a
Debt Ratios
Debt to Net Worth 0 0 4.17 n.a
Current Liab. to Liab. 1 1 1 n.a
Liquidity Ratios
Net Working Capital -425,152 -185,681 208,990 n.a
Interest Coverage 2.38 4.04 7.31 n.a

Additional Ratios
Assets to Sales 0.25 0.23 0.26 n.a
Current Debt/Total Assets 153% 122% 81% n.a
Acid Test 0.34 0.4 0.66 n.a
Sales/Net Worth 0 0 20.19 n.a
Dividend Payout 0 0 0 n.a

8.0 Conclusion and Scope of Future Work:

It is easier for businesses to survive when they have steady flow of business deals/customers
patronizing their products and services. We are aware of this, which is why we have decided to
develop a various software apps and consultancy service for different clients and for different
purposes.

anew 11
We will also work with corporate clients to help them develop customized software apps for
their business. We know that if we continue to design and develop excellent, effective and useful
software product and consultancy service for both businesses and individual, there will be steady
flow of income for the organization.

Our key sustainability and expansion strategy is to ensure that we only hire creative, competent
and selfless programmers/mobile apps developers/software developers create a suitable working
environment and employee benefits for our staff members.

In the nearest future, we will give our most dedicated and prolific employees the opportunity to
be part owner of the business. We know that if we implement our business strategies, we will
achieve our business goals and objectives in record time.

9.0 References

(1) Donald F. Kuratko (2009), 8th Edition (International Student Edition), “Introduction to
Entrepreneurship”. South Western Educational press.

(2) Helga D. Svala (2001), Information Management Hawaii, Information Technology

Business Plan [Online]. Available at

anew 12
 https://www.bplans.com/information_technology_business_plan/appendix_fc.php
[Accessed on 12 May 2019].

(3) Sharif Ahmed (24.12.2017), Laptop demand booms in Ethiopia Market [Online].
Available at http://www.theindependentbd.com/printversion/details/129429
[Accessed on May 15, 2019].

anew 13
 10.0 Appendix
Mont Month Month Mont Month Mont
Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
h1 2 3 h 10 11 h 12
Sales
80,00 100,00 100,0
TVET Management system software 80,000 80,000 85,000 85,000 85,000 95,000 95,000 95,000 100,000
0 0 00
Consultancy service 5,000 5,000 5,000 5,500 5,500 5,500 6,050 6,050 6,050 6,655 6,655 6,655
10,25 13,64
Website design development 10,250 10,250 11,275 11,275 11,275 12,403 12,403 12,403 13,643 13,643
0 3
computer system installation,
configuration and maintenance 3,250 3,250 3,250 3,575 3,575 3,575 3,933 3,933 3,933 4,326 4,326 4,326
services
Approving ICT infrastructure and
0 0 2,500 2,750 2,750 2,750 3,025 3,025 3,025 3,328 3,328 3,328
network specification
ICT related research and
0 0 0 6,875 6,875 6,875 7,563 7,563 7,563 8,319 8,319 8,319
development service
On-site and remote ICT technical 36,00 47,91
36,000 36,000 39,600 39,600 39,600 43,560 43,560 43,560 47,916 47,916
support service 0 6
17,50 23,29
hosting service 17,500 17,500 19,250 19,250 19,250 21,175 21,175 21,175 23,293 23,293
0 3
Other 2,250 2,250 2,250 2,475 2,475 2,475 2,723 2,723 2,723 2,995 2,995 2,995
154,2 154,25 156,75 210,47 210,4
Total Sales 176,300 176,300 176,300 195,432 195,432 195,432 210,475
50 0 0 5 75

Mont Month Month Mont Month Mont

Direct Cost of Sales Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
h1 2 3 h 10 11 h 12
48,67 64,78
TVET Management system software 48,670 48,670 53,537 53,537 53,537 58,891 58,891 58,891 64,780 64,780
0 0
Consultancy service 3,250 3,250 3,250 3,575 3,575 3,575 3,933 3,933 3,933 4,326 4,326 4,326
Website design development 6,355 6,355 6,355 6,991 6,991 6,991 7,690 7,690 7,690 8,459 8,459 8,459
computer system installation,
configuration and maintenance 2,275 2,275 2,275 2,503 2,503 2,503 2,753 2,753 2,753 3,028 3,028 3,028
services
Approving ICT infrastructure and
0 0 1,250 1,375 1,375 1,375 1,513 1,513 1,513 1,664 1,664 1,664
network specification
ICT related research and
2,188 2,188 2,188 2,406 2,406 2,406 2,647 2,647 2,647 2,912 2,912 2,912
development service
On-site and remote ICT technical 16,20 16,200 16,200 17,820 17,820 17,820 19,602 19,602 19,602 21,562 21,562 21,56

anew 14
support service 0 2
27,20 36,20
Service - Agreements/Repairs 27,200 27,200 29,920 29,920 29,920 32,912 32,912 32,912 36,203 36,203
0 3
12,81
hosting service 9,625 9,625 9,625 10,588 10,588 10,588 11,646 11,646 11,646 12,811 12,811
1
Other 563 563 563 619 619 619 681 681 681 749 749 749
116,3 116,32 117,57 156,49 156,4
Subtotal Direct Cost of Sales 129,334 129,334 129,334 142,268 142,268 142,268 156,494
26 6 6 4 94

Table # 14 Personnel Plan

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

Sales and Marketing Personnel

Sales 3,000 3,000 3,000 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250

Sales 3,000 3,000 3,000 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250

Sales 3,000 3,000 3,000 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250

Sales 3,000 3,000 3,000 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250 3,250

Sales 0 0 0 0 0 0 0 0 0 0 0 0

Sales 0 0 0 0 0 0 0 0 0 0 0 0

13,00 13,00
Subtotal 12,000 12,000 12,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000
0 0
General and Administrative
Personnel

General Manager 4,500 4,500 4,500 4,900 4,900 4,900 4,900 4,900 4,900 4,900 4,900 4,900

Admin Manager 3,650 3,650 3,650 3,850 3,850 3,850 3,850 3,850 3,850 3,850 3,850 3,850

Office Manager 2,450 2,450 2,450 2,650 2,650 2,650 2,650 2,650 2,650 2,650 2,650 2,650

anew 15
Delivery 0 0 0 0 0 0 0 0 0 0 0 0

Delivery 0 0 0 0 0 0 0 0 0 0 0 0

Other 0 0 0 0 0 0 0 0 0 0 0 0

11,40 11,40
Subtotal 10,600 10,600 10,600 11,400 11,400 11,400 11,400 11,400 11,400 11,400
0 0

Other Personnel

Systems Manager 4,000 4,000 4,000 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200

Systems Manager 4,000 4,000 4,000 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200

Syst Engineer 3,150 3,150 3,150 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350

yst Engineer 3,150 3,150 3,150 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350

Syst Engineer 3,150 3,150 3,150 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350 3,350

Syst Engineer 3,200 3,200 3,200 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500

Syst Tech 2,250 2,250 2,250 2,450 2,450 2,450 2,450 2,450 2,450 2,450 2,450 2,450

Syst Tech 2,250 2,250 2,250 2,450 2,450 2,450 2,450 2,450 2,450 2,450 2,450 2,450

Syst Tech 0 0 0 0 0 0 0 0 0 0 0 0

Syst Tech 0 0 0 0 0 0 0 0 0 0 0 0

26,85 26,85
Subtotal 25,150 25,150 25,150 26,850 26,850 26,850 26,850 26,850 26,850 26,850
0 0

Total People 15 15 15 15 15 15 15 15 15 15 15 15

anew 16
 51,25 51,25
Total Payroll 47,750 47,750 47,750 51,250 51,250 51,250 51,250 51,250 51,250 51,250
0 0

Table # 15 General Assumptions

Month Month Month Month Month Month Month Month Month
Month 10 Month 11 Month 12
1 2 3 4 5 6 7 8 9
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Long-term Interest Rate 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Tax Rate 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Table # 16 Profit and Loss

Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Sales 227,000 227,000 229,500 252,450 252,450 252,450 277,695 277,695 277,695 305,465 305,465 305,465
Direct Cost of Sales 116,325 116,325 117,575 129,333 129,333 129,333 142,266 142,266 142,266 156,492 156,492 156,492
Production Payroll 0 0 0 0 0 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0 0 0 0 0 0
Total Cost of Sales 116,325 116,325 117,575 129,333 129,333 129,333 142,266 142,266 142,266 156,492 156,492 156,492
Gross Margin 110,675 110,675 111,925 123,117 123,117 123,117 135,429 135,429 135,429 148,973 148,973 148,973
Gross Margin % 48.76% 48.76% 48.77% 48.77% 48.77% 48.77% 48.77% 48.77% 48.77% 48.77% 48.77% 48.77%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll 12,000 12,000 12,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000
Advertising/Promotion 500 500 500 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

anew 17
Commissions 11,350 11,350 11,475 12,623 12,623 12,623 13,885 13,885 13,885 15,273 15,273 15,273
Travel - Sales 1,500 1,500 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Learning & Growth - Sales 0 0 0 400 400 400 400 400 400 1,250 1,250 1,250
Entertainment 450 450 450 450 450 450 450 450 450 450 450 450
Total Sales and Marketing Expenses 25,800 25,800 25,925 29,473 29,473 29,473 30,735 30,735 30,735 32,973 32,973 32,973
Sales and Marketing % 11.37% 11.37% 11.30% 11.67% 11.67% 11.67% 11.07% 11.07% 11.07% 10.79% 10.79% 10.79%
General and Administrative Expenses
General and Administrative Payroll 10,600 10,600 10,600 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400 11,400
Sales and Marketing and Other Expenses 0 0 0 0 0 0 0 0 0 0 0 0
Depreciation 0 0 0 0 0 0 0 0 0 0 0 0
Depreciation 0 0 0 0 0 0 0 0 0 0 0 0
Utilities 750 750 750 750 750 750 750 750 750 750 750 750
Telephone & ISP 2,850 2,850 2,850 2,850 2,850 2,850 2,850 2,850 2,850 2,850 2,850 2,850
Office Supplies 350 350 350 350 350 350 350 350 350 350 350 350
Insurance 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400
Bank Charges 500 500 500 500 500 500 500 500 500 500 500 500
Postage 835 835 835 835 835 835 835 835 835 835 835 835
Taxes & Licenses 850 850 850 850 850 850 850 850 850 850 850 850
Bonuses 0 0 0 0 0 0 0 0 0 0 0 0
Learning & Growth - Admin 0 0 0 150 150 150 150 150 150 750 750 750
Accounting 500 500 500 500 500 500 500 500 500 500 500 500
Rent 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Payroll Taxes 30% 14,325 14,325 14,325 15,375 15,375 15,375 15,375 15,375 15,375 15,375 15,375 15,375
Other General and Administrative
0 0 0 0 0 0 0 0 0 0 0 0
Expenses
Total General and Administrative
38,960 38,960 38,960 40,960 40,960 40,960 40,960 40,960 40,960 41,560 41,560 41,560
Expenses
General and Administrative % 17.16% 17.16% 16.98% 16.22% 16.22% 16.22% 14.75% 14.75% 14.75% 13.61% 13.61% 13.61%
Other Expenses:
Other Payroll 25,150 25,150 25,150 26,850 26,850 26,850 26,850 26,850 26,850 26,850 26,850 26,850
Consultants 0 0 0 0 0 0 0 0 0 0 0 0
Learning & Growth - Service 0 0 0 850 850 850 650 650 850 1,500 1,500 1,500

anew 18
Travel - Service 1,500 1,500 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Freight & Cartage 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Total Other Expenses 29,150 29,150 29,150 32,200 32,200 32,200 32,000 32,000 32,200 32,850 32,850 32,850
Other % 12.84% 12.84% 12.70% 12.76% 12.76% 12.76% 11.52% 11.52% 11.60% 10.75% 10.75% 10.75%
Total Operating Expenses 93,910 93,910 94,035 102,633 102,633 102,633 103,695 103,695 103,895 107,383 107,383 107,383
Profit Before Interest and Taxes 16,765 16,765 17,890 20,484 20,484 20,484 31,734 31,734 31,534 41,590 41,590 41,590
EBITDA/Earnings before interest, taxes,
16,765 16,765 17,890 20,485 20,485 20,485 31,735 31,735 31,535 41,589 41,589 41,589
depreciation
Interest Expense 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667 11,667
Taxes Incurred 1,530 1,937 2,365 3,351 3,351 3,351 7,626 7,626 7,550 11,370 11,370 11,370
Net Profit 3,568 3,161 3,858 5,467 5,467 5,467 12,442 12,442 12,318 18,552 18,552 18,552
Net Profit/Sales 1.57% 1.39% 1.68% 2.17% 2.17% 2.17% 4.48% 4.48% 4.44% 6.07% 6.07% 6.07%

Table # 17 Cash Flow

Month Month Month Month Month Month Month
Month 1 Month 5 Month 7 Month 8 Month 9
2 3 4 6 10 11 12
Cash Received
Cash from Operations
Cash Sales 147,550 147,550 149,175 164,093 164,093 164,093 180,502 180,502 180,502 198,552 198,552 198,552
Cash from Receivables 0 2,648 79,450 79,479 80,593 88,358 88,358 88,652 97,193 97,193 97,517 106,913
Subtotal Cash from Operations 147,550 150,198 228,625 243,572 244,686 252,451 268,860 269,154 277,695 295,745 296,069 305,465
Additional Cash Received
Sales Tax, VAT, HST/GST Received 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 30,000 0 0 0 0 0 0 0 0 0 0 0

anew 19
 Subtotal Cash Received 177,550 150,198 228,625 243,572 244,686 252,451 268,860 269,154 277,695 295,745 296,069 305,465
Month Month Month Month Month Month Month
Expenditures Month 1 Month 5 Month 7 Month 8 Month 9
2 3 4 6 10 11 12
Expenditures from Operations
Cash Spending 47,750 47,750 47,750 51,250 51,250 51,250 51,250 51,250 51,250 51,250 51,250 51,250
Bill Payments 3,455 106,054 176,195 180,247 208,235 195,733 196,816 227,755 214,007 215,366 250,790 235,663
Subtotal Spent on Operations 51,205 153,804 223,945 231,497 259,485 246,983 248,066 279,005 265,257 266,616 302,040 286,913
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
0 0 0 0 0 0 0 0 0 0 0 0
Borrowing

Other Liabilities Principal Repayment 0 0 0 0 0 0 0 0 0 0 0 0

Long-term Liabilities Principal

0 0 0 0 0 0 0 0 0 0 0 0
Repayment
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 51,205 153,804 223,945 231,497 259,485 246,983 248,066 279,005 265,257 266,616 302,040 286,913
Net Cash Flow 126,345 -3,606 4,680 12,075 -14,799 5,468 20,794 -9,851 12,438 29,129 -5,971 18,552
Cash Balance 526,345 522,739 527,419 539,494 524,695 530,163 550,957 541,106 553,544 582,673 576,702 595,254

Table # 18 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
Starting
Assets
Balances
Current Assets
Cash 400,000 600,000 541,431 596,839 537,573 591,371 532,106 585,903 519,665 573,461 507,346 554,910 488,794
Accounts Receivable 0 79,450 156,252 157,127 166,005 173,770 173,770 182,606 191,147 191,147 200,866 210,261 210,261
Inventory 200,000 127,958 127,958 129,333 142,266 142,266 142,266 156,492 156,492 156,492 172,142 172,142 172,142
Other Current Assets 0 0 0 0 0 0 0 0 0 0 0 0 0

anew 20
 Total Current Assets 600,000 558,753 631,949 638,879 672,766 665,731 671,199 715,054 713,744 726,182 780,679 784,103 802,655
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 600,000 558,753 631,949 638,879 672,766 665,731 671,199 715,054 713,744 726,182 780,679 784,103 802,655
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 0 100,184 170,219 173,291 201,710 189,208 189,208 220,622 206,870 206,989 242,935 227,807 227,807
1,600,00
Current Borrowing 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000
0
Other Current Liabilities 0 0 0 0 0 0 0 0 0 0 0 0 0
Subtotal Current 1,820,62
1,600,000 1,700,184 1,770,219 1,773,291 1,801,710 1,789,208 1,789,208 1,806,870 1,806,989 1,842,935 1,827,807 1,827,807
Liabilities 2
Long-term Liabilities 0 0 0 0 0 0 0 0 0 0 0 0 0
1,820,62
Total Liabilities 1,600,000 1,700,184 1,770,219 1,773,291 1,801,710 1,789,208 1,789,208 1,806,870 1,806,989 1,842,935 1,827,807 1,827,807
2
Paid-in Capital 0 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000
#######
Retained Earnings -1,171,750 ######## ######## ######## ######## ######## ######## ######## ######## -1,171,750 -1,171,750 -1,171,750
#
Earnings 0 3,569 6,730 10,588 16,056 21,523 26,990 39,432 51,874 64,193 82,744 101,296 119,848
#######
Total Capital -1,171,750 ######## ######## ######## ######## ######## ######## ######## ######## -1,059,006 -1,040,454 -1,021,902
#
Total Liabilities and Capital 428,250 562,003 635,199 642,129 676,016 668,981 674,448 718,304 716,994 729,432 783,929 787,353 805,905
#######
Net Worth -1,000,000 ######## ######## ######## ######## ######## ######## ######## ######## -1,062,256 -1,043,704 -1,025,152
#

anew 21