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Group Publishing, Inc.

Executive Summary

The Group Publishing, Inc. (Group Publishing) is the publisher of “Artists In Business” magazine. The magazine, which has already printed an initial issue in July/August 1996 is directed at artists at all levels of business throughout the United States. The management of Group Publishing is targeting a total combined circulation of “Artists In Business” of 206,000 in year one, increasing to 310,000 by the end of year three. The magazine will be published bi-monthly with increased press runs throughout the first three years. Sample distribution, organizational sales, and direct mail to targeted lists of artists will be utilized to build subscriptions.

In addition, Group Publishing will market books via direct marketing and through established artist distribution channels. The direct marketing of Group Publishing books will be implemented through its magazine readership base.

Publishing is a high profit and high margin business. The key to success is successful marketing. The Group has a highly focused multi-dimensional sales and marketing plan to build its total circulation base quickly. The same channels and methods were utilized to establish a circulation of 500,000 in the first year for the Visionary Artist’s periodical.

Successful execution of The Group’s plan will produce sales revenues of $3.1 million in year one, $4.8 million in year two, and $6.4 million in year three. Net profit will increase steadily over the next three years.

The highlights of the business plan are illustrated in the following chart. Sales, margins, and net profit increase each year. The lowest margins occur in year one, reflecting the marketing costs of building the circulation base.

1.1 Objectives

The initial objectives of The Group are as follows:

  1. To raise seed capital of $150,000 to ensure publication by month two and to establish a cash reserve to market subscriptions.
  2. To have 90,000 subscribers by the end of year one through direct sampling and marketing.
  3. To have an additional 50,000 subscribers by the end of year one through organizational sales.
  4. To have 10,000 more two-year subscriptions sold.
  5. To publish two 36 page issues initially with press runs of 50,000 promotional copies each.
  6. To go to 48 pages by issue number three and increase press runs to 75,000 promotional copies.
  7. Increase to 100,000 promotional copies in issues five and six.
  8. Increase average ad page cost from $1,819 to $2,618 by the end of the first year.
  9. To sell an average of 17.5 ad pages per issue throughout year one.

1.2 Mission

“Artists In Business” magazine is for the artist who is a worker at any level. The magazine has a commitment to be a platform to profile artists who are representing artistic vision in the marketplace and who can both encourage and provide role models to other men and women. Group Publishing, through its magazine, books, and editorial content, will be a vessel to inform artists about artistic principles in everyday business and will encourage interaction among artists as business people. Our mission is to promote the concept of “community” in the workplace.

1.3 Keys to Success

The keys to success are:

  • Attaining targeted circulation levels.
  • Controlling costs while spending the maximum on subscription marketing in year one.
  • Carefully monitoring response rates of all media executions.
  • Follow-on marketing of two to four book titles in the first year.
  • Attaining targeted advertising sales revenues.
  • Having quality editorial content in each issue.
  • Making all production and distribution dates in a timely fashion for each issue.
Magazine publisher business plan, executive summary chart image

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Company Summary

Group Publishing, Inc. began as a joint concept between two avocational artists, Red Brushwielder, an advertising executive, and Thallos Green, a former insurance executive and the owner of the “Artists In Business” name. Mr. Green will promote “Artists In Business” as a radio program for syndication (a separate business entity).

Mr. Green is licensing the “Artists In Business” name to The Group Publishing, Inc. for the sum of $1 (one dollar). Mr. Green will also receive one page of advertising at no charge in each and every issue of the magazine and one page of editorial in each issue (as the founder of the magazine). It is expected that the radio show produced by Mr. Green will be a powerful promotional vehicle for the magazine.

Group Publishing will have exclusive rights to “Artists In Business” for all print media, electronic media (Internet home page, CD-ROM, Interactive Publications, etc.), catalogue business, and possible seminars and workshops devoted to the artistic business person.

2.1 Start-up Summary

The following tables and chart outline our start-up requirements and needed funding.

Equity investment in the company is now being made available to outside investors for the first time. The purpose of this investment is to raise the needed “seed” capital to launch the magazine. An initial Private Placement offering to raise from $150K to $375K is in progress. The minimum amount of the offering would be sufficient to publish the first new issue in 1997. Money raised in excess of the minimum will enable full-scale sampling and marketing of subscriptions. It is possible that no further investment may be needed. However, it cannot be assured that additional capital will not be required in the future or that sufficient capital will be available to continue publication.

We anticipate buying back the outside investment in year three for $1.5 million.

Magazine publisher business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $83,000
Start-up Assets to Fund $67,000
Total Funding Required $150,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $67,000
Additional Cash Raised $0
Cash Balance on Starting Date $67,000
Total Assets $67,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Private Placement ’96 $150,000
Investor $0
Additional Investment Requirement $0
Total Planned Investment $150,000
Loss at Start-up (Start-up Expenses) ($83,000)
Total Capital $67,000
Total Capital and Liabilities $67,000
Total Funding $150,000
Start-up
Requirements
Start-up Expenses
Legal $7,500
Stationery etc. $2,500
Brochures $5,000
Consultants $12,500
Development Advisory Fee $8,000
Rent $7,500
1st Issue Total $40,000
Total Start-up Expenses $83,000
Start-up Assets
Cash Required $67,000
Start-up Inventory $0
Other Current Assets $0
Long-term Assets $0
Total Assets $67,000
Total Requirements $150,000

2.2 Company Ownership

Red Brushwielder is the founder of The Group Publishing, Inc. a newly formed Southwest “C” corporation. He currently owns all its stock.

2.3 Company Locations and Facilities

The Group Publishing, Inc. has current offices at 1234 Main Street, Anytown, GA. 30000 The phone # is … and the fax # is …. The office is fully equipped and functional. It is not anticipated that expanded facilities will be needed for the first few years of the plan. All business, management and editorial functions will be performed there. All printing, mailing, warehousing, and fulfillment is outsourced.

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Products

The Group Publishing will publish “Artists In Business” magazine. The magazine is high gloss, 48 pages, contemporary in look and appeal. Quality art content is the constant goal. The magazine will be entertaining and newsworthy and thought-provoking. It will appeal to a broad artist readership. No magazine like it is available today.

The Group Publishing will also publish softcover and hardcover books. Certain titles will be published in softcover “trade” size. Others (called “booklets” in this plan) will be similar to “paperback” size. Contemporary Arts themes will prevail, particularly those that deal with the demands placed on both business and family life by today’s business climate.

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Market Analysis Summary

The target market is broadly based and is defined as the artist business person at all levels in any organization.

Market segments are defined by organizational affiliation.

Media strategy and execution may vary by segment.

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Strategy and Implementation Summary

Our strategy is based on serving a clearly defined niche market well. By having an identifiable market with available lists and related memberships, the management of The Group believes we can exceed publishing industry standards for conversion of potential subscribers. Committed artists are a passionate and loyal clientele. A thirst exists for the published periodical product that “Artists In Business” will provide. The initial issue, published in late summer of 1996 met with rave reviews at booksellers and distributors conventions and was profiled on Arts News radio. The task is to reach and inform the target market. The strategy is to combine sampling, direct mail, and group membership solicitation to build circulation through both subscriptions and newsstand distribution. Multi-channel distribution principles will be employed. Each has a differing margin structure but the combination will maximize the potential reach of the magazine.

5.1 Marketing Strategy

New subscriptions are both sample and media based. Sampling will be done to both known arts organization members and to artist mailing lists. Several of these databases are already available to The Group. “Artists In Business” has access to a list of 100,000 Artist business leaders. All will be sampled with the magazine.

Sample runs will be: 50,000 issues on the first and second runs, 75,000 issues on the second and third runs, and 100,000 issues on the fifth and sixth issues of 1997. All cost associated with these sampling programs are included in the advertising and promotion budgets for those months. A total of $362,000 will be spent on direct mailed sampling geared to subscription.

In alternate months, print media will be used. Arts publications will be employed. “New Brush” magazine, “Colours” magazine, and “Artistic License Today” will have the early insertions. As subscription base grows general interest media will be used later in the year. “Inc.” magazine and “Business Week” are likely choices.

Finally, sales to Arts supply and retail bookstores through magazine distributors will also be accomplished. Key distributors have already expressed interest in the publication.

All sales projections through this multi-channel approach will reflect the different pricing and margin considerations pertinent to each.

5.1.1 Distribution Strategy

Distribution of magazines and books through retail channels are projected at retail less 60%.

Subscriptions through organizations are projected at list less 50%.

All direct sales are booked at full revenue. Cost of product is deducted for 6 issues per year. Fulfillment costs are expensed.

Direct sales of books are billed to credit cards and drop shipped. The magazine is an ideal vehicle to promote these sales.

Future sales are planned directly over the internet from the AIB website.

5.1.3 Strategic Alliances

The strategic alliance with Thallos Green and his AIB radio broadcasts holds great potential. Thallos plans to syndicate the broadcasts on Arts News radio stations across the U.S.

5.1.4 Promotion Strategy

In addition to advertising, direct mail, and media executions, public relations exposure will benefit magazine circulation significantly. Red Brushwielder has already appeared and been interviewed on Arts News radio programs four times. Tapes of these interviews are available. In one instance more than 1800 calls were received requesting subscription information from a single program.

Red Brushwielder has also been asked to tape programs for an Anytown radio station on the subject of Artists in the workplace.

Promotion strategy for sales through organizations to their memberships includes a split of the first year’s subscription revenue with the selling organization.

5.1.5 Pricing Strategy

The “Artists In Business” magazine will sell for $3.95 per single issue on the newsstand.

  • A one-year subscription is $16.95.
  • A two year subscription is $29.95.
  • “Trade” soft-cover books will sell for $14.95.
  • Paperback size “booklets” will sell for $7.95.
  • Future hardcover books will sell for $19.95 to $22.95. No hardcover sales are projected in this three year plan.

5.2 Sales Strategy

Our combined sales strategy of sampling, direct mail, and organizations will result in the following first year sales goals:

  • 90,000 one-year subscriptions.
  • 50,000 one-year subscriptions through organizations.
  • 10,000 two-year subscriptions.

Four book titles are factored in in the second half of the year. Two are “trade” and two are “booklets.” Sales goals are modest.

The following sections illustrate annual revenue over the next three years of $3.1, $4.8, and $6.4 million respectively.

5.2.1 Sales Forecast

The following table and chart presents specific sales forecasts by product, by month, over the first year of sales development. Years two and three are cumulative totals only. All sales project the relevant unit cost and margin differences to reflect discounts, commissions, and revenue splits.

Discount on ad revenue is 15% agency commission and 20% sales commission for a total of 35%.

All product costs for subscriptions are based on $.40 per issue–6 issues for one year, 12 issues for two years.

The only cost not included here is an author’s royalty on book sales–expected to be 15%. These royalty costs are incurred on the P & L statement as an expense item.

Magazine publisher business plan, strategy and implementation summary chart image

Magazine publisher business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Mag Subscript Sales 1 Yr 90,000 120,000 150,000
Mag Subscript Sales 2 Yr 10,000 20,000 30,000
Mag Subscript Whsl 50,000 50,000 50,000
Newsstand Sales Whsl 56,500 72,000 80,000
Ad Revenue Pages 118 150 150
Book Sales–Direct 25,500 50,000 80,000
Boo Sales–Whsl 7,000 20,000 30,000
Booklet Sales–Direct 14,500 30,000 50,000
Booklet Sales–Whsl 0 15,000 20,000
Total Unit Sales 253,618 377,150 490,150
Unit Prices Year 1 Year 2 Year 3
Mag Subscript Sales 1 Yr $16.95 $16.95 $16.95
Mag Subscript Sales 2 Yr $29.95 $29.95 $29.95
Mag Subscript Whsl $8.50 $8.50 $8.50
Newsstand Sales Whsl $0.99 $0.99 $0.99
Ad Revenue Pages $2,182.00 $3,365.00 $3,976.00
Book Sales–Direct $14.95 $14.95 $14.95
Boo Sales–Whsl $5.98 $5.98 $5.98
Booklet Sales–Direct $7.95 $7.95 $7.95
Booklet Sales–Whsl $0.00 $3.18 $3.18
Sales
Mag Subscript Sales 1 Yr $1,525,500 $2,034,000 $2,542,500
Mag Subscript Sales 2 Yr $299,500 $599,000 $898,500
Mag Subscript Whsl $425,000 $425,000 $425,000
Newsstand Sales Whsl $55,935 $71,280 $79,200
Ad Revenue Pages $257,476 $504,750 $596,400
Book Sales–Direct $381,225 $747,500 $1,196,000
Boo Sales–Whsl $41,860 $119,600 $179,400
Booklet Sales–Direct $115,275 $238,500 $397,500
Booklet Sales–Whsl $0 $47,700 $63,600
Total Sales $3,101,771 $4,787,330 $6,378,100
Direct Unit Costs Year 1 Year 2 Year 3
Mag Subscript Sales 1 Yr $2.40 $2.40 $2.40
Mag Subscript Sales 2 Yr $4.80 $4.80 $4.80
Mag Subscript Whsl $2.40 $2.40 $2.40
Newsstand Sales Whsl $0.40 $0.40 $0.40
Ad Revenue Pages $788.02 $1,178.00 $1,392.00
Book Sales–Direct $2.99 $2.99 $2.99
Boo Sales–Whsl $2.99 $2.99 $2.99
Booklet Sales–Direct $1.59 $1.59 $1.59
Booklet Sales–Whsl $0.00 $1.59 $1.59
Direct Cost of Sales
Mag Subscript Sales 1 Yr $216,000 $288,000 $360,000
Mag Subscript Sales 2 Yr $48,000 $96,000 $144,000
Mag Subscript Whsl $120,000 $120,000 $120,000
Newsstand Sales Whsl $22,600 $28,800 $32,000
Ad Revenue Pages $92,986 $176,700 $208,800
Book Sales–Direct $76,245 $149,500 $239,200
Boo Sales–Whsl $20,930 $59,800 $89,700
Booklet Sales–Direct $23,055 $47,700 $79,500
Booklet Sales–Whsl $0 $23,850 $31,800
Subtotal Direct Cost of Sales $619,816 $990,350 $1,305,000

5.3 Milestones

Important milestones are:

  • Raising “seed” capital.
  • Publishing magazine by February.
  • Launching subscription marketing programs.
  • Achieving subscription goals.
Magazine publisher business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department
Finish Business Plan 5/7/2009 6/6/2009 $100 Dude LeGrande Fromage
Acquire Financing 5/17/2009 7/6/2009 $200 Dudette Legumers
Ah HA! Event 5/27/2009 6/1/2009 $60 Marianne Bosses
Oooooh Noooooo! Event 6/26/2009 7/1/2009 $250 Marionette Chèvre deBlâme
Grande Opening 7/6/2009 7/11/2009 $500 Gloworm Nobs
Marketing Program Starts 6/6/2009 7/1/2009 $1,000 Glower Marketeers
Plan vs. Actual Review 11/1/2009 11/8/2009 $0 Galore Alles
First Break-even Month 3/5/2010 4/4/2010 $0 Bouys Salers
Hire Employees 2/1/2010 3/3/2010 $150 Gulls HRM
Upgrade Business Plan Pro 4/22/2010 4/24/2010 $100 Brass Bossies
Totals $2,360

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Management Summary

With production and fulfillment services outsourced, The Group Publishing, Inc. has need for general management, editorial, artistic, sales & marketing, and financial expertise.

6.1 Management Team

Red Brushwielder (44), President & CEO, Publisher & Editor
Mr. Brushwielder founded and successfully grew an advertising agency over a thirteen year period. He is accomplished in both publishing and direct marketing. One of his largest clients over the years has been Payne’s Gray Publishers, Inc. a NASDAQ public company and Art book publisher.

Mr. Brushwielder has a total of 20 years experience in advertising and publishing. His advertising clients have included American Express, Steinway & Sons Piano Company, Peachtree Software, Parisian Department Stores, and ADP Payroll Services. Red Brushwielder attended the University of South Carolina.

Ochre & Sienna Burnt, Asst. Editors
Ochre (50) and Sienna (48) are the founders of Painting Restoration, which has the mission of restoring old family portraits. They are accomplished authors, with the titles “Restoring the Early Portrait” and “Demolishing Portrait Forgeries” to their credit. Ochre served in the U.S. Navy, serving three deployments in Viet Nam as a helicopter pilot.

Ochre holds a BA in Economics from the University of Connecticut, an MBA from California Lutheran College, and a Master’s of Art Education from School of Hard Knocks. Sienna holds a BS in Education from the University of Connecticut.

John Crimson (50), Interim Chief Financial Officer
Mr. Crimson was last VP and Treasurer for Holiday Inn Worldwide. He previously was President of a $30 million dollar credit union. John has a BA in Finance from the College of Wooster in Ohio and an MBA in Finance from Emory University.

Timothy Clark (48), VP of Corporate Development
Mr. Clark has successfully raised capital for both public and private companies and has written and executed strategic growth plans as both an executive and as a consultant. He has previously been in executive positions with three growth stage companies and also was part of a turn-around team that successfully righted a failed venture-backed start-up. In his early career he held sales and marketing management positions with Lever Brothers Company and the LCR Division of Squibb, Inc. both in Chicago and New York. He is skilled in Strategic Planning and Capital Formation. Mr. Clark holds a BA in Marketing from the University of Notre Dame.

6.2 Management Team Gaps

An art director is needed. Also freelance artists.

Ad sales manager and circulation manager are factored in as needed.

6.3 Personnel Plan

The following table includes the personnel plan and projected salaries for all key people.

Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
Name or Title or Group $0 $0 $0
Name or Title or Group $0 $0 $0
Subtotal $0 $0 $0
Sales and Marketing Personnel
Ad Sales Mgr. $36,000 $40,000 $44,000
Subscription Mgr. $15,000 $30,000 $33,000
Subtotal $51,000 $70,000 $77,000
General and Administrative Personnel
Red Brushwielder, CEO $60,000 $66,000 $72,000
Ochre & Sienna Burnt, Exec. Editors $52,800 $60,000 $66,000
John Crimson, CFO $12,000 $52,000 $60,000
Exec. Asst. $18,000 $22,000 $24,000
Timothy Clark, VP Corp. Dev. $18,000 $36,000 $48,000
Subtotal $160,800 $236,000 $270,000
Other Personnel
Art Director $52,800 $60,000 $66,000
Freelance Artist $6,000 $6,000 $6,000
Bookkeeper $5,400 $0 $0
Subtotal $64,200 $66,000 $72,000
Total People 10 11 11
Total Payroll $276,000 $372,000 $419,000

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Financial Plan

After initial capitalization growth can be financed largely through internal cash flow provided subscription targets are met. In the event of a sales shortfall, marketing can be cut back temporarily to preserve cash. Or, more likely, additional investment may be sought to re-accelerate productive campaigns if growth demands more funding.

The company created by this plan will generate cash as soon as subscription base reaches critical mass.

7.1 Important Assumptions

The following table illustrates the financial assumptions used as the basis for this plan. The key element is six inventory turns per year. This reflects the issues of the magazine as well as ad revenue. Ad space is treated as an inventory item.

Subscriptions are paid in advance. Only 10% of receivables are collected in 30 days, primarily from wholesale accounts. These are notoriously slow payors, so care must be taken not to let these collections run past 60 days. This will be more significant if book sales become a higher-than-expected percentage of revenue.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Key Financial Indicators

The following chart represents changes in critical profit variables. Note that margins and expenses are consistently controlled and net profit increases nicely. Inventory turns slow down somewhat in the third year due to the burden of higher inventories for increasing book sales.

Magazine publisher business plan, financial plan chart image

7.3 Break-even Analysis

This break-even analysis is applicable to the early 1997 time frame only. Key fixed costs represent the “burn” rate prior to major acceleration of marketing plans. Thus, if subscriptions didn’t flow in as planned this represents the point at which the company could continue to survive without increasing marketing. In that event, management could “buy” time to raise additional capital.

Magazine publisher business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 7,584
Monthly Revenue Break-even $92,759
Assumptions:
Average Per-Unit Revenue $12.23
Average Per-Unit Variable Cost $2.44
Estimated Monthly Fixed Cost $74,223

7.4 Projected Profit and Loss

We expect net income to near $1 million in year one and $2.4 million in year three. Net profit margins will improve as subscriptions mature and marketing costs decrease.

Magazine publisher business plan, financial plan chart image

Magazine publisher business plan, financial plan chart image

Magazine publisher business plan, financial plan chart image

Magazine publisher business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $3,101,771 $4,787,330 $6,378,100
Direct Cost of Sales $619,816 $990,350 $1,305,000
Production Payroll $0 $0 $0
Author’s Royalties: 15% $80,754 $172,995 $275,475
Total Cost of Sales $700,570 $1,163,345 $1,580,475
Gross Margin $2,401,201 $3,623,985 $4,797,625
Gross Margin % 77.41% 75.70% 75.22%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $51,000 $70,000 $77,000
Advertising/Promotion $386,176 $72,000 $90,000
Travel $7,500 $9,000 $11,000
Entertainment & Meals $2,400 $3,000 $3,600
Miscellaneous $12,000 $15,000 $18,000
Total Sales and Marketing Expenses $459,076 $169,000 $199,600
Sales and Marketing % 14.80% 3.53% 3.13%
General and Administrative Expenses
General and Administrative Payroll $160,800 $236,000 $270,000
Marketing/Promotion $0 $0 $0
Depreciation $0 $0 $0
Leased Equipment $10,200 $12,500 $14,000
Telephone $7,200 $7,500 $7,800
Postage $138,200 $279,000 $465,000
Rent $30,000 $30,000 $36,000
Utilities $9,000 $10,000 $10,500
Insurance $12,000 $12,000 $14,000
Payroll Taxes $0 $0 $0
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $367,400 $587,000 $817,300
General and Administrative % 11.84% 12.26% 12.81%
Other Expenses:
Other Payroll $64,200 $66,000 $72,000
Consultants $0 $0 $0
Other Expenses $0 $0 $0
Total Other Expenses $64,200 $66,000 $72,000
Other % 2.07% 1.38% 1.13%
Total Operating Expenses $890,676 $822,000 $1,088,900
Profit Before Interest and Taxes $1,510,525 $2,801,985 $3,708,725
EBITDA $1,510,525 $2,801,985 $3,708,725
Interest Expense $0 $0 $0
Taxes Incurred $453,157 $840,596 $1,112,618
Net Profit $1,057,368 $1,961,390 $2,596,108
Net Profit/Sales 34.09% 40.97% 40.70%

7.5 Projected Cash Flow

The table below illustrates cash accumulation from the initial assumption of $150K capital infusion. At no point does the company run out of cash. We expect to buy back the initial outside investment in year three.

The chart illustrates the critical cash flow in year one. Note that early contributions on a monthly basis are minimal and only gain momentum in the second half of the year. If shortfalls occur early on more capital may be required.

Magazine publisher business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $2,791,594 $4,308,597 $5,740,290
Cash from Receivables $242,574 $441,996 $603,139
Subtotal Cash from Operations $3,034,168 $4,750,593 $6,343,429
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 $3,034,168 $4,750,593 $6,343,429
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $276,000 $372,000 $419,000
Bill Payments $1,582,258 $2,577,550 $3,334,557
Subtotal Spent on Operations $1,858,258 $2,949,550 $3,753,557
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 $1,500,000
Subtotal Cash Spent $1,858,258 $2,949,550 $5,253,557
Net Cash Flow $1,175,910 $1,801,044 $1,089,872
Cash Balance $1,242,910 $3,043,954 $4,133,826

7.6 Projected Balance Sheet

We project a strong growth in net worth over the next several years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $1,242,910 $3,043,954 $4,133,826
Accounts Receivable $67,603 $104,339 $139,010
Inventory $89,856 $143,573 $189,188
Other Current Assets $0 $0 $0
Total Current Assets $1,400,369 $3,291,866 $4,462,024
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $1,400,369 $3,291,866 $4,462,024
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $276,001 $206,109 $280,160
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $276,001 $206,109 $280,160
Long-term Liabilities $0 $0 $0
Total Liabilities $276,001 $206,109 $280,160
Paid-in Capital $150,000 $150,000 $150,000
Retained Earnings ($83,000) $974,368 $1,435,757
Earnings $1,057,368 $1,961,390 $2,596,108
Total Capital $1,124,368 $3,085,757 $4,181,865
Total Liabilities and Capital $1,400,369 $3,291,866 $4,462,024
Net Worth $1,124,367 $3,085,757 $4,181,864

7.7 Business Ratios

These business ratios are limited in value since the company projects no debt. This will also be an advantage if debt capital is desired later without dilution to shareholders. Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 2721, Periodicals, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 54.34% 33.23% -1.70%
Percent of Total Assets
Accounts Receivable 4.83% 3.17% 3.12% 25.50%
Inventory 6.42% 4.36% 4.24% 5.40%
Other Current Assets 0.00% 0.00% 0.00% 54.10%
Total Current Assets 100.00% 100.00% 100.00% 85.00%
Long-term Assets 0.00% 0.00% 0.00% 15.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 19.71% 6.26% 6.28% 42.30%
Long-term Liabilities 0.00% 0.00% 0.00% 12.30%
Total Liabilities 19.71% 6.26% 6.28% 54.60%
Net Worth 80.29% 93.74% 93.72% 45.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 77.41% 75.70% 75.22% 56.10%
Selling, General & Administrative Expenses 43.32% 34.73% 34.52% 39.70%
Advertising Expenses 12.45% 1.50% 1.41% 1.90%
Profit Before Interest and Taxes 48.70% 58.53% 58.15% 4.20%
Main Ratios
Current 5.07 15.97 15.93 2.16
Quick 4.75 15.27 15.25 1.71
Total Debt to Total Assets 19.71% 6.26% 6.28% 54.60%
Pre-tax Return on Net Worth 134.34% 90.80% 88.69% 7.40%
Pre-tax Return on Assets 107.87% 85.12% 83.12% 16.20%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 34.09% 40.97% 40.70% n.a
Return on Equity 94.04% 63.56% 62.08% n.a
Activity Ratios
Accounts Receivable Turnover 4.59 4.59 4.59 n.a
Collection Days 56 66 70 n.a
Inventory Turnover 10.91 8.49 7.84 n.a
Accounts Payable Turnover 6.73 12.17 12.17 n.a
Payment Days 27 35 26 n.a
Total Asset Turnover 2.21 1.45 1.43 n.a
Debt Ratios
Debt to Net Worth 0.25 0.07 0.07 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $1,124,367 $3,085,757 $4,181,864 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.45 0.69 0.70 n.a
Current Debt/Total Assets 20% 6% 6% n.a
Acid Test 4.50 14.77 14.76 n.a
Sales/Net Worth 2.76 1.55 1.53 n.a
Dividend Payout 0.00 0.00 0.58 n.a

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Appendix

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
Unit Sales
Mag Subscript Sales 1 Yr 0% 0 5,000 6,500 7,500 8,000 8,000 9,000 9,000 9,000 9,000 9,000 10,000
Mag Subscript Sales 2 Yr 0% 0 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Mag Subscript Whsl 0% 2,500 3,000 3,500 4,000 4,000 4,000 4,000 4,500 5,000 5,500 5,000 5,000
Newsstand Sales Whsl 0% 0 5,000 0 7,500 0 10,000 0 10,000 0 12,000 0 12,000
Ad Revenue Pages 0% 0 15 0 15 0 22 0 22 0 22 0 22
Book Sales–Direct 0% 0 0 0 1,500 0 2,000 2,500 3,500 4,000 4,000 4,000 4,000
Boo Sales–Whsl 0% 0 0 0 1,500 2,000 0 1,500 0 0 2,000 0 0
Booklet Sales–Direct 0% 0 0 0 0 0 1,500 1,500 2,000 2,000 2,500 2,500 2,500
Booklet Sales–Whsl 0% 0 0 0 0 0 0 0 0 0 0 0 0
Total Unit Sales 2,500 13,015 11,000 23,015 15,000 26,522 19,500 30,022 21,000 36,022 21,500 34,522
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Mag Subscript Sales 1 Yr $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95 $16.95
Mag Subscript Sales 2 Yr $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95 $29.95
Mag Subscript Whsl $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50
Newsstand Sales Whsl $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99 $0.99
Ad Revenue Pages $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00 $2,182.00
Book Sales–Direct $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95 $14.95
Boo Sales–Whsl $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98 $5.98
Booklet Sales–Direct $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95 $7.95
Booklet Sales–Whsl $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18 $3.18
Sales
Mag Subscript Sales 1 Yr $0 $84,750 $110,175 $127,125 $135,600 $135,600 $152,550 $152,550 $152,550 $152,550 $152,550 $169,500
Mag Subscript Sales 2 Yr $0 $0 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950
Mag Subscript Whsl $21,250 $25,500 $29,750 $34,000 $34,000 $34,000 $34,000 $38,250 $42,500 $46,750 $42,500 $42,500
Newsstand Sales Whsl $0 $4,950 $0 $7,425 $0 $9,900 $0 $9,900 $0 $11,880 $0 $11,880
Ad Revenue Pages $0 $32,730 $0 $32,730 $0 $48,004 $0 $48,004 $0 $48,004 $0 $48,004
Book Sales–Direct $0 $0 $0 $22,425 $0 $29,900 $37,375 $52,325 $59,800 $59,800 $59,800 $59,800
Boo Sales–Whsl $0 $0 $0 $8,970 $11,960 $0 $8,970 $0 $0 $11,960 $0 $0
Booklet Sales–Direct $0 $0 $0 $0 $0 $11,925 $11,925 $15,900 $15,900 $19,875 $19,875 $19,875
Booklet Sales–Whsl $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $21,250 $147,930 $169,875 $262,625 $211,510 $299,279 $274,770 $346,879 $300,700 $380,769 $304,675 $381,509
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Mag Subscript Sales 1 Yr 0.00% $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40
Mag Subscript Sales 2 Yr 0.00% $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80 $4.80
Mag Subscript Whsl 0.00% $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40 $2.40
Newsstand Sales Whsl 0.00% $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 $0.40
Ad Revenue Pages 0.00% $637.00 $637.00 $637.00 $637.00 $763.00 $763.00 $763.00 $763.00 $916.00 $916.00 $916.00 $916.00
Book Sales–Direct 0.00% $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99
Boo Sales–Whsl 0.00% $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99 $2.99
Booklet Sales–Direct 0.00% $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59
Booklet Sales–Whsl 0.00% $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59
Direct Cost of Sales
Mag Subscript Sales 1 Yr $0 $12,000 $15,600 $18,000 $19,200 $19,200 $21,600 $21,600 $21,600 $21,600 $21,600 $24,000
Mag Subscript Sales 2 Yr $0 $0 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800 $4,800
Mag Subscript Whsl $6,000 $7,200 $8,400 $9,600 $9,600 $9,600 $9,600 $10,800 $12,000 $13,200 $12,000 $12,000
Newsstand Sales Whsl $0 $2,000 $0 $3,000 $0 $4,000 $0 $4,000 $0 $4,800 $0 $4,800
Ad Revenue Pages $0 $9,555 $0 $9,555 $0 $16,786 $0 $16,786 $0 $20,152 $0 $20,152
Book Sales–Direct $0 $0 $0 $4,485 $0 $5,980 $7,475 $10,465 $11,960 $11,960 $11,960 $11,960
Boo Sales–Whsl $0 $0 $0 $4,485 $5,980 $0 $4,485 $0 $0 $5,980 $0 $0
Booklet Sales–Direct $0 $0 $0 $0 $0 $2,385 $2,385 $3,180 $3,180 $3,975 $3,975 $3,975
Booklet Sales–Whsl $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $6,000 $30,755 $28,800 $53,925 $39,580 $62,751 $50,345 $71,631 $53,540 $86,467 $54,335 $81,687
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
Production Personnel
Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales and Marketing Personnel
Ad Sales Mgr. $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Subscription Mgr. $0 $0 $0 $0 $0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Subtotal $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
General and Administrative Personnel
Red Brushwielder, CEO $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Ochre & Sienna Burnt, Exec. Editors $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
John Crimson, CFO $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Exec. Asst. $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Timothy Clark, VP Corp. Dev. $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Subtotal $11,900 $11,900 $11,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900
Other Personnel
Art Director $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
Freelance Artist $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Bookkeeper $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Subtotal $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350
Total People 8 8 8 8 9 9 10 10 10 10 10 10
Total Payroll $20,250 $20,250 $20,250 $22,250 $22,250 $22,250 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750

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 $21,250 $147,930 $169,875 $262,625 $211,510 $299,279 $274,770 $346,879 $300,700 $380,769 $304,675 $381,509
Direct Cost of Sales $6,000 $30,755 $28,800 $53,925 $39,580 $62,751 $50,345 $71,631 $53,540 $86,467 $54,335 $81,687
Production Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Author’s Royalties: 15% $0 $0 $0 $4,709 $1,794 $6,274 $8,741 $10,234 $11,355 $13,745 $11,951 $11,951
Total Cost of Sales $6,000 $30,755 $28,800 $58,634 $41,374 $69,025 $59,086 $81,865 $64,895 $100,212 $66,286 $93,638
Gross Margin $15,250 $117,175 $141,075 $203,991 $170,136 $230,254 $215,685 $265,014 $235,805 $280,557 $238,389 $287,871
Gross Margin % 71.76% 79.21% 83.05% 77.67% 80.44% 76.94% 78.50% 76.40% 78.42% 73.68% 78.24% 75.46%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Advertising/Promotion $3,000 $38,724 $3,000 $38,724 $3,000 $62,947 $4,800 $62,947 $4,800 $79,717 $4,800 $79,717
Travel $500 $500 $500 $500 $500 $500 $750 $750 $750 $750 $750 $750
Entertainment & Meals $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Miscellaneous $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Total Sales and Marketing Expenses $7,700 $43,424 $7,700 $43,424 $7,700 $67,647 $12,250 $70,397 $12,250 $87,167 $12,250 $87,167
Sales and Marketing % 36.24% 29.35% 4.53% 16.53% 3.64% 22.60% 4.46% 20.29% 4.07% 22.89% 4.02% 22.85%
General and Administrative Expenses
General and Administrative Payroll $11,900 $11,900 $11,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900 $13,900
Marketing/Promotion $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
Leased Equipment $850 $850 $850 $850 $850 $850 $850 $850 $850 $850 $850 $850
Telephone $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Postage $300 $13,950 $300 $13,950 $300 $23,250 $300 $23,250 $300 $31,000 $300 $31,000
Rent $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Utilities $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 20% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other General and Administrative Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total General and Administrative Expenses $17,900 $31,550 $17,900 $33,550 $19,900 $42,850 $19,900 $42,850 $19,900 $50,600 $19,900 $50,600
General and Administrative % 84.24% 21.33% 10.54% 12.77% 9.41% 14.32% 7.24% 12.35% 6.62% 13.29% 6.53% 13.26%
Other Expenses:
Other Payroll $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350
Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Other Expenses $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350 $5,350
Other % 25.18% 3.62% 3.15% 2.04% 2.53% 1.79% 1.95% 1.54% 1.78% 1.41% 1.76% 1.40%
Total Operating Expenses $30,950 $80,324 $30,950 $82,324 $32,950 $115,847 $37,500 $118,597 $37,500 $143,117 $37,500 $143,117
Profit Before Interest and Taxes ($15,700) $36,851 $110,125 $121,667 $137,186 $114,407 $178,185 $146,417 $198,305 $137,440 $200,889 $144,754
EBITDA ($15,700) $36,851 $110,125 $121,667 $137,186 $114,407 $178,185 $146,417 $198,305 $137,440 $200,889 $144,754
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($4,710) $11,055 $33,038 $36,500 $41,156 $34,322 $53,455 $43,925 $59,492 $41,232 $60,267 $43,426
Net Profit ($10,990) $25,796 $77,088 $85,167 $96,030 $80,085 $124,729 $102,492 $138,814 $96,208 $140,622 $101,328
Net Profit/Sales -51.72% 17.44% 45.38% 32.43% 45.40% 26.76% 45.39% 29.55% 46.16% 25.27% 46.15% 26.56%

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 $19,125 $133,137 $152,888 $236,363 $190,359 $269,351 $247,293 $312,191 $270,630 $342,692 $274,208 $343,358
Cash from Receivables $0 $71 $2,547 $14,866 $17,297 $26,092 $21,444 $29,846 $27,717 $34,534 $30,337 $37,823
Subtotal Cash from Operations $19,125 $133,208 $155,435 $251,229 $207,656 $295,443 $268,737 $342,037 $298,347 $377,226 $304,544 $381,181
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 $19,125 $133,208 $155,435 $251,229 $207,656 $295,443 $268,737 $342,037 $298,347 $377,226 $304,544 $381,181
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 $20,250 $20,250 $20,250 $22,250 $22,250 $22,250 $24,750 $24,750 $24,750 $24,750 $24,750 $24,750
Bill Payments $620 $22,274 $127,157 $74,136 $179,333 $82,283 $218,739 $116,024 $238,858 $123,196 $289,628 $110,010
Subtotal Spent on Operations $20,870 $42,524 $147,407 $96,386 $201,583 $104,533 $243,489 $140,774 $263,608 $147,946 $314,378 $134,760
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 $20,870 $42,524 $147,407 $96,386 $201,583 $104,533 $243,489 $140,774 $263,608 $147,946 $314,378 $134,760
Net Cash Flow ($1,745) $90,684 $8,028 $154,843 $6,073 $190,910 $25,247 $201,263 $34,740 $229,280 ($9,834) $246,422
Cash Balance $65,255 $155,939 $163,967 $318,810 $324,883 $515,793 $541,040 $742,303 $777,043 $1,006,323 $996,489 $1,242,910

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 $67,000 $65,255 $155,939 $163,967 $318,810 $324,883 $515,793 $541,040 $742,303 $777,043 $1,006,323 $996,489 $1,242,910
Accounts Receivable $0 $2,125 $16,847 $31,287 $42,684 $46,538 $50,374 $56,407 $61,249 $63,602 $67,145 $67,275 $67,603
Inventory $0 $6,600 $33,831 $31,680 $59,318 $43,538 $69,026 $55,380 $78,794 $58,894 $95,114 $59,769 $89,856
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $67,000 $73,980 $206,617 $226,934 $420,811 $414,959 $635,193 $652,827 $882,346 $899,538 $1,168,581 $1,123,532 $1,400,369
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 $67,000 $73,980 $206,617 $226,934 $420,811 $414,959 $635,193 $652,827 $882,346 $899,538 $1,168,581 $1,123,532 $1,400,369
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 $17,970 $124,811 $68,041 $176,751 $74,869 $215,018 $107,923 $234,950 $113,329 $286,163 $100,492 $276,001
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 $17,970 $124,811 $68,041 $176,751 $74,869 $215,018 $107,923 $234,950 $113,329 $286,163 $100,492 $276,001
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $17,970 $124,811 $68,041 $176,751 $74,869 $215,018 $107,923 $234,950 $113,329 $286,163 $100,492 $276,001
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 ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000) ($83,000)
Earnings $0 ($10,990) $14,806 $91,893 $177,060 $273,090 $353,175 $477,904 $580,396 $719,210 $815,418 $956,040 $1,057,368
Total Capital $67,000 $56,010 $81,806 $158,893 $244,060 $340,090 $420,175 $544,904 $647,396 $786,210 $882,418 $1,023,040 $1,124,368
Total Liabilities and Capital $67,000 $73,980 $206,617 $226,934 $420,811 $414,959 $635,193 $652,827 $882,346 $899,538 $1,168,581 $1,123,532 $1,400,369
Net Worth $67,000 $56,010 $81,806 $158,893 $244,060 $340,090 $420,175 $544,904 $647,396 $786,210 $882,418 $1,023,040 $1,124,367

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