Funding Requirements and Uses
Based on our projections, we feel an investment in our company is a sound investment. In order to proceed, we are requesting an investment of $101,600 by June, 1999. The funds will be used to purchase equipment and to cover initial operating expenses. The $101,600 will be used to implement Phase 1 of our operations. Once the company is in full operation, we will require an additional capital investment to fund Phase 2 of our operations.
We will be in discussion with developers on the best direction to take and what cost savings we can achieve. The specific details for Phase 2 are still to be determined, but three major areas (server, small PBX, and business development funds) will require approximately $30,000 by January, 2000.
We can provide an exit for this investment within three years by a dividend of excess profits. The increase in profits generated by sales revenue will provide funds to repay the investment.
Based on our projections, we feel an investment to Web Applications is a sound business investment. In order to proceed, we are requesting an investment of $101,600 as soon as possible.
With average first year fixed monthly costs and an average margin as shown below, Web Applications calculates it will break even at the sales volume presented in the table and chart. The company management plans to reach such level by the end of 2000.
The following chart contains assumptions important to the success of the company.
The projected income statement for Web Applications is shown below. The company is basing its revenue projections on anticipated sales of products.
The cash flow statement can be found in the chart and table below.
The projected balance sheet is provided below.
The following table outlines some of the more important ratios from the Computer Programming Services industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7371.