Infotext Strategy Letter
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 | ||
| Sales | |||||||||||||
| Newsletter subscriptions | 39500% | $13,312 | $12,522 | $8,611 | $8,769 | $10,566 | $11,870 | $12,522 | $13,173 | $14,477 | $15,283 | $15,591 | $14,512 |
| Cancellations | -30000% | $0 | $0 | $0 | $0 | $0 | $0 | ($300) | ($300) | ($300) | ($300) | ($300) | ($300) |
| Total Sales | $13,312 | $12,522 | $8,611 | $8,769 | $10,566 | $11,870 | $12,222 | $12,873 | $14,177 | $14,983 | $15,291 | $14,212 | |
| Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Outside editing | 10% | $500 | $525 | $551 | $579 | $608 | $638 | $670 | $704 | $739 | $776 | $814 | $855 |
| Outside Production | 10% | $500 | $525 | $551 | $579 | $608 | $638 | $670 | $704 | $739 | $776 | $814 | $855 |
| Physical Production | 10% | $750 | $788 | $827 | $868 | $912 | $957 | $1,005 | $1,055 | $1,108 | $1,163 | $1,222 | $1,283 |
| Other | 2% | $7,500 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 |
| Subtotal Direct Cost of Sales | $9,250 | $2,038 | $2,129 | $2,226 | $2,327 | $2,433 | $2,545 | $2,662 | $2,786 | $2,915 | $3,051 | $3,193 | |
| 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 | ||
| Newsletter manager | 5% | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 |
| Editorial | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Secretarial | 5% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $1,750 | $1,750 | $1,750 |
| Other | 5% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total People | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 2 | 2 | 2 | |
| Total Payroll | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $7,250 | $7,250 | $7,250 | |
| General Assumptions | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
| Current Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |
| Long-term Interest 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% | |
| Tax Rate | 30.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |
| New subscriptions | 0 | 34 | 32 | 22 | 22 | 27 | 30 | 32 | 33 | 37 | 39 | 39 | 37 |
| Renewals | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cancellations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 1 | 1 |
| Subscribers | 34 | 65 | 87 | 109 | 136 | 166 | 197 | 229 | 265 | 303 | 341 | 377 | |
| 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 | $13,312 | $12,522 | $8,611 | $8,769 | $10,566 | $11,870 | $12,222 | $12,873 | $14,177 | $14,983 | $15,291 | $14,212 | |
| Direct Cost of Sales | $9,250 | $2,038 | $2,129 | $2,226 | $2,327 | $2,433 | $2,545 | $2,662 | $2,786 | $2,915 | $3,051 | $3,193 | |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $9,250 | $2,038 | $2,129 | $2,226 | $2,327 | $2,433 | $2,545 | $2,662 | $2,786 | $2,915 | $3,051 | $3,193 | |
| Gross Margin | $4,062 | $10,484 | $6,482 | $6,543 | $8,239 | $9,436 | $9,676 | $10,211 | $11,391 | $12,068 | $12,240 | $11,019 | |
| Gross Margin % | 30.51% | 83.73% | 75.27% | 74.62% | 77.98% | 79.50% | 79.17% | 79.32% | 80.35% | 80.55% | 80.05% | 77.53% | |
| Expenses | |||||||||||||
| Payroll | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $7,250 | $7,250 | $7,250 | |
| Marketing | 50% | $3,500 | $3,500 | $3,000 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 |
| Depreciation | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Leased Equipment | 5% | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 |
| Insurance | 5% | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 | $75 |
| Payroll Taxes | 14% | $770 | $770 | $770 | $770 | $770 | $770 | $770 | $770 | $770 | $1,015 | $1,015 | $1,015 |
| Other | 5% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Operating Expenses | $9,945 | $9,945 | $9,445 | $6,945 | $6,945 | $6,945 | $6,945 | $6,945 | $6,945 | $8,940 | $8,940 | $8,940 | |
| Profit Before Interest and Taxes | ($5,884) | $539 | ($2,963) | ($402) | $1,294 | $2,491 | $2,731 | $3,266 | $4,446 | $3,128 | $3,300 | $2,079 | |
| EBITDA | ($5,884) | $539 | ($2,963) | ($402) | $1,294 | $2,491 | $2,731 | $3,266 | $4,446 | $3,128 | $3,300 | $2,079 | |
| Interest Expense | $33 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $33 | |
| Taxes Incurred | ($1,775) | $110 | ($766) | ($125) | $299 | $598 | $658 | $791 | $1,087 | $757 | $800 | $511 | |
| Net Profit | ($4,142) | $329 | ($2,298) | ($376) | $896 | $1,793 | $1,973 | $2,374 | $3,260 | $2,271 | $2,400 | $1,534 | |
| Net Profit/Sales | -31.11% | 2.63% | -26.68% | -4.29% | 8.48% | 15.11% | 16.15% | 18.44% | 22.99% | 15.16% | 15.70% | 10.80% | |
| 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 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Cash from Receivables | $0 | $7,099 | $12,890 | $10,436 | $8,695 | $9,728 | $11,261 | $12,057 | $12,569 | $13,568 | $14,607 | $15,147 | |
| Subtotal Cash from Operations | $0 | $7,099 | $12,890 | $10,436 | $8,695 | $9,728 | $11,261 | $12,057 | $12,569 | $13,568 | $14,607 | $15,147 | |
| 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 | $5,000 | $10,000 | $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 | $5,000 | $17,099 | $12,890 | $10,436 | $8,695 | $9,728 | $11,261 | $12,057 | $12,569 | $13,568 | $14,607 | $15,147 | |
| 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 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $7,250 | $7,250 | $7,250 | |
| Bill Payments | $0 | $10,360 | $7,394 | $5,580 | $3,880 | $4,101 | $4,522 | $4,725 | $4,965 | $5,361 | $5,456 | $5,617 | |
| Subtotal Spent on Operations | $5,500 | $15,860 | $12,894 | $11,080 | $9,380 | $9,601 | $10,022 | $10,225 | $10,465 | $12,611 | $12,706 | $12,867 | |
| 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 | $10,000 | |
| 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 | $5,500 | $15,860 | $12,894 | $11,080 | $9,380 | $9,601 | $10,022 | $10,225 | $10,465 | $12,611 | $12,706 | $22,867 | |
| Net Cash Flow | ($500) | $1,240 | ($4) | ($644) | ($685) | $127 | $1,239 | $1,832 | $2,104 | $957 | $1,901 | ($7,720) | |
| Cash Balance | $14,500 | $15,740 | $15,736 | $15,093 | $14,407 | $14,534 | $15,774 | $17,606 | $19,709 | $20,667 | $22,567 | $14,847 | |
| 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 | $15,000 | $14,500 | $15,740 | $15,736 | $15,093 | $14,407 | $14,534 | $15,774 | $17,606 | $19,709 | $20,667 | $22,567 | $14,847 |
| Accounts Receivable | $0 | $13,312 | $18,734 | $14,454 | $12,787 | $14,658 | $16,801 | $17,761 | $18,577 | $20,184 | $21,598 | $22,283 | $21,348 |
| Other Current Assets | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| Total Current Assets | $22,000 | $34,812 | $41,473 | $37,191 | $34,880 | $36,066 | $38,335 | $40,534 | $43,182 | $46,894 | $49,265 | $51,850 | $43,195 |
| 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 | $22,000 | $34,812 | $41,473 | $37,191 | $34,880 | $36,066 | $38,335 | $40,534 | $43,182 | $46,894 | $49,265 | $51,850 | $43,195 |
| 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 | $11,953 | $8,286 | $6,301 | $4,367 | $4,657 | $5,132 | $5,358 | $5,632 | $6,084 | $6,184 | $6,369 | $6,180 |
| Current Borrowing | $0 | $5,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $5,000 |
| Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Subtotal Current Liabilities | $0 | $16,953 | $23,286 | $21,301 | $19,367 | $19,657 | $20,132 | $20,358 | $20,632 | $21,084 | $21,184 | $21,369 | $11,180 |
| Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Liabilities | $0 | $16,953 | $23,286 | $21,301 | $19,367 | $19,657 | $20,132 | $20,358 | $20,632 | $21,084 | $21,184 | $21,369 | $11,180 |
| Paid-in Capital | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 |
| Retained Earnings | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) | ($28,000) |
| Earnings | $0 | ($4,142) | ($3,813) | ($6,110) | ($6,486) | ($5,591) | ($3,797) | ($1,824) | $550 | $3,810 | $6,081 | $8,481 | $10,015 |
| Total Capital | $22,000 | $17,858 | $18,187 | $15,890 | $15,514 | $16,409 | $18,203 | $20,176 | $22,550 | $25,810 | $28,081 | $30,481 | $32,015 |
| Total Liabilities and Capital | $22,000 | $34,812 | $41,473 | $37,191 | $34,880 | $36,066 | $38,335 | $40,534 | $43,182 | $46,894 | $49,265 | $51,850 | $43,195 |
| Net Worth | $22,000 | $17,858 | $18,187 | $15,890 | $15,514 | $16,409 | $18,203 | $20,176 | $22,550 | $25,810 | $28,081 | $30,481 | $32,015 |
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