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Table of Contents
Table of Contents
Page 2
Chart: Highlights
Highlights
$8,000,000
$7,000,000
$6,000,000
$5,000,000
Sales
$4,000,000
Gross Margin
Net Profit
$3,000,000
$2,000,000
$1,000,000
$0
2000
2001
2002
1.1 Mission
The mission of Web Services Provider is to provide quality Internet services, Web hosting, and
DSL service to both large and small clients.
Page 1
Page 2
Past Performance
1997
1998
1999
$0
$0
0.00%
$0
0
$0
$0
0.00%
$0
0
$900,000
$700,000
77.78%
$700,000
3
1997
1998
1999
$0
$0
$0
$0
$0
$0
$0
$0
$2,450
$14,200
$1,050
$17,700
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
$0
$0
$0
$0
$0
$0
$5,250
$1,000
$4,250
Total Assets
$0
$0
$21,950
Accounts Payable
Current Borrowing
Other Current Liabilities (interest free)
Total Current Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$10,000
$500
$10,900
$21,400
Long-term Liabilities
Total Liabilities
$0
$0
$0
$0
$3,550
$24,950
Paid-in Capital
Retained Earnings
Earnings
Total Capital
$0
$0
$0
$0
$0
$0
$0
$0
$100,000
($103,000)
$0
($3,000)
$0
$0
$21,950
0
$0
0.00
0
$0
0.00
30
$900,000
63.38
Sales
Gross Margin
Gross Margin %
Operating Expenses
Collection Period (days)
Balance Sheet
Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Current Liabilities
Other Inputs
Payment Days
Sales on Credit
Receivables Turnover
Page 3
Past Performance
$900,000
$800,000
$700,000
$600,000
Sales
$500,000
Gross
$400,000
Net
$300,000
$200,000
$100,000
$0
1997
1998
1999
3.0 Services
Main services provided by Web Services Provider are outlined below.
1. DSL. A Digital Subscriber Line (DSL) is high-speed Internet access that is an "on all the
time" connection and ranges in speed from 144k to 6Gb transfer rate.
2. Hosting. Web hosting clients generally have the company place a single, or several,
website on a server in our facility and pay for the amount of disk space that they need to
operate their site.
3. Dedicated Server. Clients seeking to maximize the speed of their site due to high traffic or
download will lease a dedicated server from Web Services Provider, leaving the maximum
capability of the server all to their own site.
4. Co-location. Co-location customers provide the hardware themselves and administer their
site or sites via the Internet.
When hosting and dedicated server clients are secured, orders will be processed immediately
and the customer can be up and running within a few minutes. Dedicated server clients can be
online within 1-2 hours unless a special server must be built.
Page 4
Page 5
the lowest-priced item, the nature of the Internet makes comparison shopping so easy that
prices in many categories of goods will undoubtedly decline over time.
Table: Market Analysis
Market Analysis
Potential Customers
Growth
Online E-trading
Entertainment
Global Corporations
Corporations
Total
15%
10%
15%
10%
12.74%
2000
2001
2002
2003
2004
200,000
160,000
95,000
100,000
555,000
230,000
176,000
109,250
110,000
625,250
264,500
193,600
125,638
121,000
704,738
304,175
212,960
144,484
133,100
794,719
349,801
234,256
166,157
146,410
896,624
CAGR
15.00%
10.00%
15.00%
10.00%
12.74%
Online E-trading
Entertainment
Global Corporations
Corporations
Online E-trading.
Entertainment.
Global Corporations.
Corporations.
Page 6
The Internet
As of year-end 1998, almost 160 million users accessed the Internet regularly, up from
approximately 101 million at the end of 1997, according to IDC, an industry analysis and
research company. Clearly, the Internet is in an exceptional growth phase. This growth has
pushed the capacity of existing networking infrastructure to its limits, resulting in frustration by
Internet users.
Still, consumers have found the Internet to be a useful tool in the research and purchase of
goods and services. Corporations have found that, while the Internet is challenging traditional
business models, it also offers significant advantages to companies that fully embrace the
medium.
4.2 Market Trends
Exceptional growth
By any measure, the Internet is one of the fastest-growing commercial phenomena ever
witnessed by society. Host computers, or servers, have exploded from 3.2 million in 1994 to
roughly 56.2 million as of July 1999. During the same time period, the number of websites
roared to more than 5 million from only 3,000.
A key factor in the recent growth of the Internet is the popularity of the sub-$1,000 PC. Rapidly
falling component prices have allowed PC manufacturers to pass cost savings on to their
customers, resulting in a more attractively priced product. Computers sold at or below the
$1,000 level have appealed to first-time PC users and lower income families. Because of the
more affordable prices, PC penetration in the United States is now approximately 50%,
according to Dataquest, a market research firm based in San Jose, California.
As a result of the Internet's historical roots in the U.S. Department of Defense, as well as the
rising penetration of PCs, the United States accounts for more than half of the world's total
Internet users. The European market, by contrast, has been held back by the high cost of
Internet access. Consumers are typically billed twice in these markets, once by the ISP and
once by the phone company. However, the forces of telecommunications deregulation in Europe
finally appear to be having an effect, as several phone companies have recently eliminated
access fees and now bill only on a per-minute basis. Such moves should eventually increase the
penetration of the Internet in Europe.
In the United States, less than one-third of the population is connected, leaving plenty of room
for growth. In 1996, people asked colleagues and friends if they had an electronic mail address.
In 1997, people were asked what their electronic mail address was. When consumers today are
asked why they purchased a personal computer, the most common answer is to connect to the
Internet to get their email.
4.3 Market Growth
Bandwidth bottlenecks frustrate consumers...
Today's telecommunications network infrastructure was not designed for the booming traffic
created by Internet use. Ordinary telephone lines are optimized for short conversations,
whereas Internet users typically stay online for ours at a time. Growing corporate use of the
Internet to communicate with suppliers and customers has put additional strains on the system.
Page 7
Adding to the capacity problem are the use of multimedia attachments to email, more complex
multimedia websites, larger files being downloaded by users, and other bandwidth-hungry
applications. Although the predicted global meltdown of the Internet has not come to pass,
delays in navigating the Web and in receiving email continue to plague the industry and
frustrate users.
...But solutions are on the way
The vast majority of Internet users use dial-up modems to access the Internet through their
ISPs. As a result of the capacity constraints inherent in using analog modem technology over
copper wires, 56 kilobits per second is the maximum capacity available today for most
residential customers.
New technologies, such as cable modems and digital subscriber line (DSL) systems, promise a
quantum leap in bandwidth: up to 30 megabytes per second (Mbps) and 12 Mbps, respectively.
Both technologies also offer an added advantage in that they are always "on": a consumer need
not physically dial into an ISP to access the Internet.
Cable modems. The nascent market for cable modems is beginning to exhibit strong growth.
The number of cable Internet service subscribers numbered more than 1 million as of July
1999, up from 500,000 in 1998.
The current leaders in this burgeoning market are Excite@Home and RoadRunner, North
America's No. 1 and No. 2 cable modem services, respectively. RoadRunner is provided by
ServiceCo LLC-a joint venture, led by time Warner Inc. that includes MediaOne Group, Inc.,
Microsoft Corporation, Compaq Corporation, and Advance/Newhouse Partnership, a private
firm.
Digital subscriber lines. These systems allow telephone companies to offer faster service
over copper wires by reducing signal distortion. The number of DSL subscribers was
approximately 20,000 in 1998.
The fastest form of DSL is asymmetric digital subscriber line, or ADSL, includes Ameritech
Corporation, SBC Communications Inc., Bell Atlantic Corporation, U S. WEST Inc., Sprint
Corporation, MCI World Com Inc., and GTE Corporation.
In contrast to cable modems, which have been deployed in select regions for a few years,
consumer-oriented DSL service is only now being rolled out more aggressively. Cable
companies have also resolved their standardization issues and have come further in preparing
their networks for broadband than have the telcos.
While the number of DSL subscribers should exhibit strong growth in 1999, it appears that
cable modems will still command the bulk of the broadband market. One reason is that cable
modems have an inherent speed advantage. The consumer friendly version of ADSL, known as
G.Lite, offers speeds of up to 1.5 Mbps, compared with top speeds of 30 Mbps for cable
modems.
Limitations
Aside from bandwidth constraints, another more serious problem has recently been brought to
light, which threatens to forestall the previously explosive growth of the Internet. According to
a study conducted by the Department of Commerce, significant disparities continue to exist
Page 8
between certain demographic groups and regions with regard to Internet access. For example,
those households with incomes of $75,000 or higher are more than twenty times as likely to
have Internet access than those at the lowest income level.
The presence of such disparities would seem to limit the potential growth of the Internet, and
would likely impact many of the market forecasts discussed in the "Industry Profile" section of
this report. However, both government and businesses are aware of the problem and are
currently taking steps to close this so-called "digital divide." The U.S. government plans to use
community centers to increase access to the Internet for all Americans. Meanwhile, many
businesses also plan to help educate and train individuals who may otherwise be at a
disadvantage in today's increasingly technological workplace.
Far-reaching benefits
Although the Internet is still evolving as a medium for communications and commerce, it has
already had a substantial impact on both consumers and businesses. For consumers, the
advent of online shopping has brought greater convenience, while businesses have enjoyed
productivity gains.
4.4 Competition and Buying Patterns
Competitive threats come from the more established hosting companies with large amounts of
operating capital. Their weaknesses are, however, even with strong brand awareness, they
cannot afford to move their facilities. This ties them to their current locations, which lack
adequate bandwidth, speed, and reliability due to their connections through local telco
connectivity.
DSL. Web Services Provider's competitors include other XDSL resellers.
Hosting. Web Services Provider's competitors include online Web hosting companies.
Dedicated Server. Web Services Provider's competitors include companies providing single site
Web servers for increased speed and reliability.
Co-location. Web Services Provider's competitors include Web hosting companies offering
customer or vendor provided large server or servers housed in their facilities and usually
managed over the Internet by the customer.
5.0 Strategy and Implementation Summary
Marketing
Web Services Provider markets its products as solutions to high traffic and bandwidth-intensive
Web companies whose online reliability and speed are critical to daily business. Target
companies include online stock trading companies, e-tailers, and corporations with graphics
and/or streaming video.
Sales are made through Web Services Providers' national advertising campaign. The sales
process involves several steps which include:
Page 9
1. The first contact when the perspective customers first impression is made while viewing one
the magazines in which we advertise.
2. At this point, the customer will call our sales line or go to our website.
3. The customer can then call the sales line where a trained representative will answer
questions and proceed with initiating service and billing. This approach will be used because
each customer's concerns and needs will be met immediately to capture the customer at
this point of contact.
The average sales cycle from first contact to closing the sale is between one and seven days.
Sales Monthly
$120,000
$100,000
$80,000
All Services
Other
$60,000
$40,000
$20,000
$0
Jan
Mar
Feb
May
Apr
Jul
Jun
Sep
Aug
Nov
Oct
Dec
Sales Forecast
2000
2001
2002
$1,500,000
$0
$1,500,000
$4,500,000
$0
$4,500,000
$7,500,000
$0
$7,500,000
2000
$100,000
$0
$100,000
2001
$150,000
$0
$150,000
2002
$200,000
$0
$200,000
Sales
All Services
Other
Total Sales
Direct Cost of Sales
All Services
Other
Subtotal Direct Cost of Sales
Page 10
Sales by Year
$8,000,000
$7,000,000
$6,000,000
$5,000,000
All Services
$4,000,000
Other
$3,000,000
$2,000,000
$1,000,000
$0
2000
2001
2002
Bandwidth.
Reliability.
Service.
Flexibility.
Page 11
advantage through rapid growth. The company's goal in the next year is to grow its core
customer base quickly and efficiently while focusing on the most profitable sector of the
market. The company's goal in the 2-5 years is to grow through acquisitions of smaller
companies and separate itself from the competition by price and services.
5.3.1 Distribution Strategy
Web Services Provider uses a direct sales force, relationship selling, and sales/support lines to
reach its markets. These channels are most appropriate because each customer has special
demands and needs to be treated differently. After the initial contact, by magazine, referral,
or email, the customer is assessed and assigned a sales rep and tech support person to help
them and to familiarize themselves with each individual company's needs and history.
5.3.2 Marketing Programs
The key message associated with the company's products and services is better reliability,
speed, and bandwidth for the same price. The company's promotional plan is diverse and
includes a range of marketing communications:
1. Public relations. Press releases are issued to both technical trade journals and major
business publications such as Wall Street Journal, Business Week, and others.
2. Trade shows. Company representatives attend and participate in several trade shows such
as Apex and Comdex.
3. Industry conferences and seminars, research publishing, and print media. Web
Services Provider presents its key advantages at conferences and publishes articles about
its work in publications such as e-business Advisor, Wired, Microsoft Internet Developer,
Web Techniques, Business 2.0, and PC Computing. Local and national public relations will be
handled by Creative Garage II's marketing firm.
4. Print advertising and article publishing. The company's print advertising program
includes advertisements in technical trade publications such as E-business Journal, Wired,
Web Techniques, Microsoft Internet Developer, Business 2.0, PC Computing, direct mail
pieces, brochures, and other print media.
5. Internet. The company currently has plans to redevelop its current website because that is
a primary marketing channel.
Page 12
Personnel Plan
2000
2001
2002
$150,000
$150,000
$60,000
$120,000
15
$198,000
$198,000
$99,000
$132,000
18
$254,000
$254,000
$136,000
$194,000
22
Total Payroll
$480,000
$627,000
$838,000
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
2000
2001
2002
1
10.00%
10.00%
25.42%
0
2
10.00%
10.00%
25.00%
0
3
10.00%
10.00%
25.42%
0
Page 13
Break-even Analysis
$100,000
$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
($60,000)
($80,000)
$0
$40,000
$80,000
$120,000
$160,000
$200,000
$20,000
$60,000
$100,000
$140,000
$180,000
$220,000
Break-even Analysis
Monthly Revenue Break-even
$106,438
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
7%
$99,342
Page 14
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
2000
2001
2002
Page 15
2001
2002
Sales
Direct Cost of Sales
Other
Total Cost of Sales
$1,500,000
$100,000
$50,000
$150,000
$4,500,000
$150,000
$50,000
$200,000
$7,500,000
$200,000
$50,000
$250,000
Gross Margin
Gross Margin %
$1,350,000
90.00%
$4,300,000
95.56%
$7,250,000
96.67%
$480,000
$249,500
$4,200
$12,000
$2,000
$6,000
$40,000
$14,400
$12,000
$300,000
$72,000
$0
$627,000
$453,000
$4,500
$18,000
$2,000
$7,000
$45,000
$20,000
$15,000
$300,000
$94,050
$0
$838,000
$675,000
$5,000
$30,000
$2,000
$8,000
$48,000
$20,000
$24,000
$400,000
$125,700
$0
$1,192,100
$1,585,550
$2,175,700
$157,900
$162,100
$0
$39,802
$2,714,450
$2,718,950
$0
$678,613
$5,074,300
$5,079,300
$0
$1,289,718
Net Profit
Net Profit/Sales
$118,098
7.87%
$2,035,838
45.24%
$3,784,582
50.46%
Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Repairs and Maintenance
Bank Charges
Insurance
Rent
Depreciation
Software
Product Development
Payroll Taxes
Other
Total Operating Expenses
Page 16
Profit Monthly
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Profit Yearly
$4,000,000
$3,600,000
$3,200,000
$2,800,000
$2,400,000
$2,000,000
$1,600,000
$1,200,000
$800,000
$400,000
$0
2000
2001
2002
Page 17
Chart: Cash
Cash
$1,000,000
$800,000
$600,000
$400,000
$200,000
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
$0
Page 18
2001
2002
$0
$1,268,367
$1,268,367
$0
$4,008,333
$4,008,333
$0
$7,008,333
$7,008,333
$0
$0
$0
$0
$0
$0
$1,250,000
$2,518,367
$0
$0
$0
$0
$0
$0
$0
$4,008,333
$0
$0
$0
$0
$0
$0
$0
$7,008,333
2000
2001
2002
$480,000
$835,682
$1,315,682
$627,000
$1,754,052
$2,381,052
$838,000
$2,786,959
$3,624,959
$0
$500
$10,900
$3,550
$0
$600,000
$0
$1,930,632
$0
$0
$0
$0
$0
$300,000
$0
$2,681,052
$0
$0
$0
$0
$0
$300,000
$0
$3,924,959
$587,734
$590,184
$1,327,281
$1,917,466
$3,083,375
$5,000,840
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance
Page 19
2001
2002
$590,184
$245,833
$1,050
$837,068
$1,917,466
$737,500
$1,050
$2,656,016
$5,000,840
$1,229,167
$1,050
$6,231,057
$605,250
$5,200
$600,050
$1,437,118
$905,250
$9,700
$895,550
$3,551,566
$1,205,250
$14,700
$1,190,550
$7,421,607
2000
2001
2002
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$72,019
$0
$0
$72,019
$150,630
$0
$0
$150,630
$236,089
$0
$0
$236,089
Long-term Liabilities
Total Liabilities
$0
$72,019
$0
$150,630
$0
$236,089
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$1,350,000
($103,000)
$118,098
$1,365,098
$1,437,118
$1,350,000
$15,098
$2,035,838
$3,400,936
$3,551,566
$1,350,000
$2,050,936
$3,784,582
$7,185,518
$7,421,607
Net Worth
$1,365,098
$3,400,936
$7,185,518
Assets
Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Page 20
2001
2002
Industry Profile
66.67%
200.00%
66.67%
9.70%
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
17.11%
0.07%
58.25%
41.75%
100.00%
20.77%
0.03%
74.78%
25.22%
100.00%
16.56%
0.01%
83.96%
16.04%
100.00%
25.00%
46.30%
76.60%
23.40%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
5.01%
0.00%
5.01%
94.99%
4.24%
0.00%
4.24%
95.76%
3.18%
0.00%
3.18%
96.82%
49.40%
21.20%
70.60%
29.40%
100.00%
90.00%
82.10%
14.13%
10.53%
100.00%
95.56%
50.31%
8.89%
60.32%
100.00%
96.67%
45.92%
8.00%
67.66%
100.00%
0.00%
78.10%
0.90%
1.90%
11.62
11.62
5.01%
11.57%
10.99%
17.63
17.63
4.24%
79.81%
76.43%
26.39
26.39
3.18%
70.62%
68.37%
1.57
1.19
70.60%
4.10%
13.80%
Sales Growth
Percent of Total Assets
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
2000
2001
2002
7.87%
8.65%
45.24%
59.86%
50.46%
52.67%
n.a
n.a
6.10
58
12.46
27
1.04
6.10
40
12.17
22
1.27
6.10
48
12.17
25
1.01
n.a
n.a
n.a
n.a
n.a
0.05
1.00
0.04
1.00
0.03
1.00
n.a
n.a
$765,048
0.00
$2,505,386
0.00
$5,994,968
0.00
n.a
n.a
0.96
5%
8.21
1.10
0.79
4%
12.74
1.32
0.99
3%
21.19
1.04
n.a
n.a
n.a
n.a
Activity Ratios
Accounts Receivable Turnover
Collection Days
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Page 21
Dividend Payout
0.00
0.00
0.00
n.a
Page 22
Appendix
Table: Sales Forecast
Sales Forecast
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Sales
All Services
Other
Total Sales
Direct Cost of Sales
All Services
Other
Subtotal Direct Cost of Sales
0%
0%
$125,000
$0
$125,000
Jan
$8,333
$125,000
$0
$125,000
Feb
$8,333
$125,000
$0
$125,000
Mar
$8,333
$125,000
$0
$125,000
Apr
$8,333
$125,000
$0
$125,000
May
$8,333
$125,000
$0
$125,000
Jun
$8,333
$125,000
$0
$125,000
Jul
$8,333
$125,000
$0
$125,000
Aug
$8,333
$125,000
$0
$125,000
Sep
$8,333
$125,000
$0
$125,000
Oct
$8,333
$125,000
$0
$125,000
Nov
$8,333
$125,000
$0
$125,000
Dec
$8,337
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,337
Page 1
Appendix
Table: Personnel
Personnel Plan
Marketing and Sales
Technical Services
Accounting
Administrative and HR
Total People
Total Payroll
0%
0%
0%
0%
Jan
Feb
Apr
May
Jun
Jul
Aug
Oct
Nov
Dec
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
Mar
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
Sep
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$12,500
$12,500
$5,000
$10,000
15
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
Page 2
Appendix
Table: General Assumptions
General Assumptions
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
10
11
12
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
Tax 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%
30.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
Plan Month
Other
Dec
Page 3
Appendix
Table: Profit and Loss
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,333
$8,337
Other
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$4,167
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,500
$12,504
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,500
$112,496
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
90.00%
Payroll
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$29,500
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
$20,000
Expenses
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
Bank Charges
$167
$167
$167
$167
$167
$167
$167
$167
$167
$167
$167
$167
Insurance
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
Rent
$1,250
$2,500
$2,500
$3,750
$3,750
$3,750
$3,750
$3,750
$3,750
$3,750
$3,750
$3,750
Depreciation
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
$1,200
Software
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$6,000
$0
$105,967
$97,717
$97,717
$98,967
$98,967
$98,967
$98,967
$98,967
$98,967
$98,967
$98,967
$98,967
$6,534
$14,784
$14,784
$13,534
$13,534
$13,534
$13,534
$13,534
$13,534
$13,534
$13,534
$13,530
$6,884
$15,134
$15,134
$13,884
$13,884
$13,884
$13,884
$13,884
$13,884
$13,884
$13,884
$13,880
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,960
$3,696
$3,696
$3,383
$3,383
$3,383
$3,383
$3,383
$3,383
$3,383
$3,383
$3,382
$4,574
$11,088
$11,088
$10,150
$10,150
$10,150
$10,150
$10,150
$10,150
$10,150
$10,150
$10,147
3.66%
8.87%
8.87%
8.12%
8.12%
8.12%
8.12%
8.12%
8.12%
8.12%
8.12%
8.12%
Product Development
Payroll Taxes
Other
Total Operating
Expenses
Profit Before Interest and
Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
15%
Page 4
Appendix
Page 5
Appendix
Table: Cash Flow
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Cash Received
Cash from Operations
Cash Sales
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$7,100
$11,267
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$7,100
$11,267
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$11,267
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
$125,000
Expenditures
0.00%
$1,250,00
0
$1,257,10
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
$40,000
Bill Payments
$12,669
$79,859
$73,562
$73,594
$74,500
$74,500
$74,500
$74,500
$74,500
$74,500
$74,500
$40,000
$74,500
$52,669
$119,859
$113,562
$113,594
$114,500
$114,500
$114,500
$114,500
$114,500
$114,500
$114,500
$114,500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$10,900
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3,550
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$150,000
$30,000
$30,000
$150,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$217,619
$149,859
$143,562
$263,594
$144,500
$144,500
$144,500
$144,500
$144,500
$144,500
$144,500
$144,500
Page 6
Appendix
Net Cash Flow
Cash Balance
$1,039,48
1
$1,041,93
1
($138,593
)
$903,338
Jan
Feb
($18,562)
$884,776
($138,594
)
$746,182
($19,500)
($19,500)
($19,500)
($19,500)
($19,500)
($19,500)
($19,500)
($19,500)
$726,683
$707,183
$687,683
$668,183
$648,684
$629,184
$609,684
$590,184
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Starting
Balances
Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets
$2,450
$14,200
$1,050
$17,700
$1,041,93
1
$132,100
$1,050
$1,175,08
1
$903,338
$884,776
$746,182
$726,683
$707,183
$687,683
$668,183
$648,684
$629,184
$609,684
$590,184
$245,833
$1,050
$1,150,22
1
$245,833
$1,050
$1,131,65
9
$245,833
$1,050
$993,066
$245,833
$1,050
$973,566
$245,833
$1,050
$954,066
$245,833
$1,050
$934,566
$245,833
$1,050
$915,067
$245,833
$1,050
$895,567
$245,833
$1,050
$876,067
$245,833
$1,050
$856,567
$245,833
$1,050
$837,068
$155,250
$1,350
$153,900
$1,328,98
1
$185,250
$1,700
$183,550
$1,333,77
1
$215,250
$2,050
$213,200
$1,344,85
9
$365,250
$2,400
$362,850
$1,355,91
6
$395,250
$2,750
$392,500
$1,366,06
6
$425,250
$3,100
$422,150
$1,376,21
6
$455,250
$3,450
$451,800
$1,386,36
6
$485,250
$3,800
$481,450
$1,396,51
7
$515,250
$4,150
$511,100
$1,406,66
7
$545,250
$4,500
$540,750
$1,416,81
7
$575,250
$4,850
$570,400
$1,426,96
7
$605,250
$5,200
$600,050
$1,437,11
8
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$5,250
$1,000
$4,250
$21,950
$10,000
$500
$10,900
$21,400
$77,407
$0
$0
$77,407
$71,110
$0
$0
$71,110
$71,110
$0
$0
$71,110
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,016
$0
$0
$72,016
$72,019
$0
$0
$72,019
Long-term Liabilities
Total Liabilities
$3,550
$24,950
$0
$77,407
$0
$71,110
$0
$71,110
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,016
$0
$72,019
$100,000
$1,350,00
0
($103,00
0)
$4,574
$1,251,57
4
$1,328,98
1
$1,350,00
0
($103,00
0)
$15,661
$1,262,66
1
$1,333,77
1
$1,350,00
0
($103,00
0)
$26,749
$1,273,74
9
$1,344,85
9
$1,350,00
0
($103,00
0)
$36,899
$1,283,89
9
$1,355,91
6
$1,350,00
0
($103,00
0)
$47,050
$1,294,05
0
$1,366,06
6
$1,350,00
0
($103,00
0)
$57,200
$1,304,20
0
$1,376,21
6
$1,350,00
0
($103,00
0)
$67,350
$1,314,35
0
$1,386,36
6
$1,350,00
0
($103,00
0)
$77,500
$1,324,50
0
$1,396,51
7
$1,350,00
0
($103,00
0)
$87,651
$1,334,65
1
$1,406,66
7
$1,350,00
0
($103,00
0)
$97,801
$1,344,80
1
$1,416,81
7
$1,350,00
0
($103,00
0)
$107,951
$1,354,95
1
$1,426,96
7
$1,350,00
0
($103,00
0)
$118,098
$1,365,09
8
$1,437,11
8
Paid-in Capital
Retained Earnings
($103,000)
Earnings
Total Capital
$0
($3,000)
$21,950
Page 7
Appendix
Net Worth
($3,000)
$1,251,57
4
$1,262,66
1
$1,273,74
9
$1,283,89
9
$1,294,05
0
$1,304,20
0
$1,314,35
0
$1,324,50
0
$1,334,65
1
$1,344,80
1
$1,354,95
1
$1,365,09
8
Page 8