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A.

Price Strategy

Part name Helmet.. Thermo-pole. Rubbers. Nuts

Rs 500 10 25 10

Bluetooth Pins. Speaker Total

350 10 85 990

After making all the above costing we give two prices to our two dealers.

Bike Dealer Motorcycles Whole Sellers

1500 1600

Cost Benefit Analysis

Cost of helmet Having following features. Bluetooth Hands free pins

1800

Users of our helmet save the following cost Cost of Bluetooth Hand free Helmet Fuel Cost Total 950 250 1000 100 2300

Difference

500

Financial Plan

Initials Current Investment


The amount for startup for this business is 2million. This amount will be initially invested by four directors.

Capital Requirement For The Next 3-5 Years:


As mentioned earlier, the amount of capital we will be requiring to initiate our business would be 2 million rupees (20 LAKH rupees). This capital would be required for the first year of the business. The projecting capital requirement for the next 3-5 years would be somewhere around 50 LAKH rupees. As we expect losses in the first year, break-even point in the end 2nd year and profits by the 3rd year, so, keeping all the factors in mind, that will be our capital requirement for the next 3-5 years.

1. Sources And Uses Of Funds:


Our main source of loaning which would be fulfilling our capital requirement for the next 3-5 years would be Banks, Investors and Profits which we will be earning. These funds will be used in buying material, machinery, upgrading our R&D, Graphical and different heads of our business model as per described. The funds would be used in paying off employees salaries, office rent, buying equipment and refunding back those things which get defected before their guaranteed life.

Future Plans
Our future plans are as follows 2013 Break even

2014

Open one retail store for B2C business and gain other bike dealers in to the customers list.2 branch offices in Lahore, Faisalabad, and Multan.

2015

Open branches in all over the Punjab.

2016

Other offices in other major cities of Pakistan outside Punjab.

Overview Of The Financial Projections:


The financial projections have been prepared under the following assumptions:

Key Assumptions:

Increase in Cost of Raw Materials Increase in Staff Salaries Increase in Utilities (Electricity / Water / Gas) Increase in Office Expenses Depreciation Increase In Sales

10 % per year 15 % per year 15 % per year

10 % per year 10% per year Straight line method 15% Per Year

Financial Plan

Equity Share of HI FLY


Equity Share Rs 2,000,000

Startup Cost
Building & office Furniture& Fixture Advertisement Legal Expense Machinery & Equipment Miscellaneous Expenses Total Startup Cost 760,000 200,000 150,000 50,000 800,000 40,000 2,000 ,000

Income Statement
8.3) Projected Income Statement

YEARS Sales Cost Of Goods Sold GROSS PROFIT LESS: EXPENSES ADVERTISING LESS: ADMINISTRATIVE EXPENSES INSURANCE SALARIES (W-1) UTILITIES POSTAGE LEGAL&PROFESSIONAL SERVICES MISCELLANEOUS TOTAL EXPENSES OPERATING

2012 2,400,000 1,800,000 600,000

2013 2,760,000 1,980,000 780,000

2014 3,174,000 2,178,000 996,000

150,000

150,000

150,000

5,000 100,000 120,000 1,000 50,000

7,000 115,000 138,000 1,200 55,000

9,000 132,250 158,700 1,500 60,000

40,000 466,000

44,000 510,200

48,400 436,150

TAXABLE INCOME TAXES (35%)

134,000 46,900

269,800 94,430

559,850 195,948

NET INCOME

87,100

175,370

363,900

Operating Cost Of Hi Fly 1 Month Furniture Stationary& Equipment Utility Expenses Misc Expenses Total Expense 25,000 3500 63,500 220,000 42,000 392,000 20,000 15,000 1 Year 100,000 30,000

YEAR Profit Before Tax Adjustment Depreciation Cash Flow From For

2013 270,000 110,000

2014 560,000 121,000

380,000

681,000

Operations Before Working Capital Changes Increase/Decrease Current Assets Inventory Receivables Increase/Decrease Current Liablities Creditors Cash Generated from 249,000 365,000 378,000 481,000 In (95,000) (169,000) (184,000) (394,000) In

Operations Taxes Paid Net Cash From Operations Cash Flow From Investing Activities CAPEX Net Cash Flow from (250,000) (250,000) (275,000) (275,000) (94,000) 271,000 (195,948) 285,052 -

Investment Net Increase/Decrease In Cash 21,000 10,052

Cash At The Beginning Of The Year Cash & Cash Equivalents At The End Of The Year

200,000

221,000

221,000

231,052

Cash Flow Statement

8.5) Balance Sheet (Projected) Projected 2012 Assets Projected 2013 Projected 2014

Current Assets CASH Inventory Receivables Prepaid expenses Total Assets Current 200,000 779,500 1,038,600 2,018,100 220,000 875,000 1,207,780 2,302,780 230,000 1,059,000 1,601,882 2,890,882

Fixed Assets Machinery equipment Furniture fixtures Depreciation Total Fixed Assets (net depreciation) of 100,000 900,000 110,000 1,040,000 121,000 1,194,000 & 200,000 250,000 265,000 & 800,000 900,000 1,050,000

TOTAL Assets

2,918,100

3,343,000

4,085,000

Liabilities Equity

and

Invested capital Retained Earnings Current Liabilities Creditors Bills payables

2,000,000 87,100

2,000,000 262,470

2,000,000 626,400

800,000 31,000 -

1,010,000 70,100 1,080,000

1,347,500 110,500 1,458,000

Total Liabilities

Current

831,000

Total

Liabilities

2,918,100

3,343,000

4,085,000

And Equity

Working

W-1 = Salaries of Forming Staff

No. Of Employees

Yearly Salaries

Jobs Director Salaries Sales Force @ 10,000 Marketers @ 10,000 Worker @ 7500 Sweeper @ 7000 4 2 2 4 1 240,000 240,000 360,000 84000

Total

13

924,000.00

Breakeven Analysis
Breakeven in rupees = Fixed Cost / Contribution Margin Ratio Contribution Margin Ratio = Sale Variable Cost Sale = 2,400,000 1,556,000 2,400,000 = 844,000 2,400,000 Contribution Margin Ratio = 0.352 * Variable cost = admin exp. + marketing exp.

Breakeven in rupees = Fixed Cost / Contribution Margin Ratio = 720,000 / 0.352 Breakeven = 2,04,545.5 rupees

Item

No of add play in 2 Months

Total

Jang

167400

Break Even Analysis:


As the Hi Fly is a company that is providing its product so its sales depends on the number of customers that would attain its services. This is the grounds reason why its sales or profits would not increase in a normal manner but would diverge in an uneven pattern with the number of consumers would vary. As there is no consistency in the number of customers so the company will not meet the breakeven point. The following graph shows how the company will perform in the following years.

Sales

Year

The above graph shows that there could be an increase in the revenue but the company may not reach the breakeven point.