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University Telephones

Executive Summary

University Telephones will offer State University students landline phones, cell phones, and cell phone plans. University Telephones will operate out of a storefront that is sandwiched between a popular student espresso shop and the University Bookstore.  Located just a half block from campus, University Telephones is accessible to all students.

The university community centers around Steward Street which is the major entrance and exit from campus.  Each year, students spend in excess of $100 million dollars for products and services with businesses serving the university community.

University Telephones will focus on students that live on and off campus by offering products and service plans that are tailored to student needs. Approximately six thousand students live on campus.  An additional twelve thousand students live off campus. Currently, there is no telephone equipment outlet operation within five miles of the campus.

Robert Conway, owner of University Telephones, has been the manager of the University Bookstore’s electronic department for the past four years and is very familiar with his target customer base.

Telephone sales business plan, executive summary chart image

1.1 Mission

University Telephones’ mission is to offer its customers the highest quality telephone products and services. Robert focuses on personalized service to his customers by offering convenience and rapid service. Additionally, University Telephones has the technologically expertise assist customers in picking the product and service that best meets the student’s needs. Finally, Robert has strong vendor relationships with the product suppliers and will be able to meet customer’s demand for the newest innovation in telephone technology.

1.2 Keys to Success

University Telephones’ keys to success will include:

  1. Excellent customer service.
  2. Grow and maintain a referral network of customers.
  3. Focus expertise in cell phones and cell phone programs.
  4. Rapid response to customer problems with product or plan.
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Company Summary

University Telephones will offer State University students landline phones, cell phones, and cell phones plans.  Robert Conway, owner of University Telephones, believes the store is the perfect location to capture students as they make crucial purchases at the beginning of each term.

University Telephones will provide students support and convenience second to none.

2.1 Company Ownership

Robert Conway is the sole owner of University Telephones.

2.2 Start-up Summary

Robert will invest $40,000 in University Telephones. He will also secure a $50,000 long-term loan. The following chart and table show projected initial start-up costs for University Telephones.

Telephone sales business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $1,000
Insurance $1,000
Rent $2,000
Expensed Equipment $4,000
Total Start-up Expenses $8,000
Start-up Assets
Cash Required $2,000
Start-up Inventory $30,000
Other Current Assets $0
Long-term Assets $50,000
Total Assets $82,000
Total Requirements $90,000
Start-up Funding
Start-up Expenses to Fund $8,000
Start-up Assets to Fund $82,000
Total Funding Required $90,000
Assets
Non-cash Assets from Start-up $80,000
Cash Requirements from Start-up $2,000
Additional Cash Raised $0
Cash Balance on Starting Date $2,000
Total Assets $82,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $50,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $50,000
Capital
Planned Investment
Robert Conway $40,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($8,000)
Total Capital $32,000
Total Capital and Liabilities $82,000
Total Funding $90,000

2.3 Company Locations and Facilities

University Telephones is located on 3455 Steward Street.

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Products

The following are the products and services offered by University Telephones:

  • Landline Phones: Sony, RCA, Panasonic, Toshiba, GE, Sanyo, and Conair.
  • Cell Phones: Ericsson, Sprint, Motorola, Neopoint, Nokia, Panasonic, and Sanyo.
  • Cell Phone Accessories: antennas, batteries, belt clips, cables and adapters, cases, chargers, faceplates, and modems.
  • Cell Phone Plans: local service, regional service, national service, prepaid service.
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Market Analysis Summary

The university community serves 18,000 students. Each year, students spend in excess of $100 million dollars for products and services with businesses in the university community.  In a recent campus survey, over 75% of students reported that they own cell phones.  Of that number, over 80% reported that they also have a landline phone.  This represents a multi-million dollar market in the university community.

University Telephones will focus on students that live on and off campus by offering products and service plans that are tailored to student needs. Approximately, 6,000 students live on campus.  An additional 12,000 students live off campus. Currently, there is no telephone equipment outlet operation within five miles of the campus.

4.1 Market Segmentation

University Telephones will focus on two customer groups:

  • Students living on campus;
  • Students living off campus;
  • Non-students that work or live in university area.  This group includes university faculty, administration, and university-area residents.
Telephone sales business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Students Living On Campus 2% 6,000 6,120 6,242 6,367 6,494 2.00%
Students Living Off Campus 3% 12,000 12,360 12,731 13,113 13,506 3.00%
Non-students 5% 7,000 7,350 7,718 8,104 8,509 5.00%
Total 3.34% 25,000 25,830 26,691 27,584 28,509 3.34%

4.2 Target Market Segment Strategy

The market for telephone equipment and cell phone plans is very fragmented, crowded and competitive. Among these, there are only a few large local firms that serve the entire city of Richmond. The remainder are small firms that sell from kiosks in the surrounding malls. University Telephones’ current niche is its location on Steward Street. At the beginning of each term, a number of telephone equipment and service providers set up tables and kiosks on Steward Street but after day ten, they have all left the area.  University Telephones will have a permanent home on Steward Street and we believe that will be seen as a advantage by our customers.

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Strategy and Implementation Summary

University Telephones will promote the store opening.  We will advertise in the university daily student newspaper as well as the university area advertising flyer.  In the advertisements for the store opening, we will have a 20% off coupon for product purchases over twenty dollars.  We will continue this discount for the first month of operation.

5.1 Competitive Edge

The University Telephones’ competitive edge is:

  • Location:  University Telephones is located on Steward Street, just a half block from campus. The foot traffic on Steward Street is very strong. University Telephones is sandwiched between a popular student espresso shop and the University Bookstore.
  • Customer Service: Robert Conway, owner of University Telephones, has been the manager of the University Bookstore’s electronic department for the past four years and is very familiar with his target customer base.  He has an excellent reputation for customer service.  Most importantly, the store location will improve customer satisfaction when problems with product or service occur.  Customers will value the ability to come into the store between classes to resolve any problems that come up.

5.2 Sales Strategy

The sales strategy of University Telephones is simple. The key to customer satisfaction is having the product and services that meet the customer’s needs. A crucial part of that is to also have knowledgeable employees to help customers find what they want quickly.

5.2.1 Sales Forecast

The following is University Telephones’ sales forecast for three years.

Telephone sales business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Land Line Phones $35,000 $37,000 $44,000
Cell Phones $82,000 $89,000 $98,000
Cell Phone Accessories $59,000 $63,000 $72,000
Cell Service Plans $164,000 $170,000 $190,000
Total Sales $340,000 $359,000 $404,000
Direct Cost of Sales Year 1 Year 2 Year 3
Land Line Phones $8,200 $9,000 $1,000
Cell Phones $18,800 $20,000 $25,000
Cell Phone Accessories $15,300 $15,000 $19,000
Cell Service Plans $117,000 $118,000 $121,000
Subtotal Direct Cost of Sales $159,300 $162,000 $166,000

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Management Summary

Robert Conway, owner of University Telephones, has been an employee of the University Bookstore for the past eleven years.  Robert worked as a sales associate at the bookstore during his senior year at State University.  After receiving a BA in English, Robert was promoted to Floor Manager.  Over the years, Robert developed expertise in electronic products and was a leader in the bookstore’s expansion into electronic products.  He was the electronic department’s first manager in 1996.  Since then, the department has grown into its own storefront that is adjacent to the bookstore and has its own staff.  Robert supervised the growth of the department and developed a reputation as a outstanding manager.

Robert Convey will manage the daily operations of University Telephones.

6.1 Personnel Plan

University Telephones will have a staff of five:

  • Manager;
  • Store Staff (4).
Personnel Plan
Year 1 Year 2 Year 3
Robert Conway $36,000 $40,000 $44,000
Store Staff (4) $96,000 $106,000 $114,000
Other $0 $0 $0
Total People 5 5 5
Total Payroll $132,000 $146,000 $158,000

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Financial Plan

The following is the financial plan for University Telephones.

7.1 Break-even Analysis

The monthly break-even point is approximately $28,300.

Telephone sales business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $28,318
Assumptions:
Average Percent Variable Cost 47%
Estimated Monthly Fixed Cost $15,050

7.2 Projected Balance Sheet

The following table highlights the projected balance sheet for the next three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $21,509 $18,733 $37,092
Inventory $14,960 $15,214 $15,589
Other Current Assets $0 $0 $0
Total Current Assets $36,469 $33,946 $52,682
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $2,400 $4,800 $7,200
Total Long-term Assets $47,600 $45,200 $42,800
Total Assets $84,069 $79,146 $95,482
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $17,184 $16,817 $17,913
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $17,184 $16,817 $17,913
Long-term Liabilities $39,200 $28,400 $17,600
Total Liabilities $56,384 $45,217 $35,513
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($8,000) ($12,315) ($6,071)
Earnings ($4,315) $6,244 $26,040
Total Capital $27,685 $33,929 $59,969
Total Liabilities and Capital $84,069 $79,146 $95,482
Net Worth $27,685 $33,929 $59,969

7.3 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for the next three years.

Telephone sales business plan, financial plan chart image

Telephone sales business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $340,000 $359,000 $404,000
Direct Cost of Sales $159,300 $162,000 $166,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $159,300 $162,000 $166,000
Gross Margin $180,700 $197,000 $238,000
Gross Margin % 53.15% 54.87% 58.91%
Expenses
Payroll $132,000 $146,000 $158,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $2,400 $2,400 $2,400
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $0 $0 $0
Rent $24,000 $12,000 $12,000
Payroll Taxes $19,800 $21,900 $23,700
Other $0 $0 $0
Total Operating Expenses $180,600 $184,700 $198,500
Profit Before Interest and Taxes $100 $12,300 $39,500
EBITDA $2,500 $14,700 $41,900
Interest Expense $4,415 $3,380 $2,300
Taxes Incurred $0 $2,676 $11,160
Net Profit ($4,315) $6,244 $26,040
Net Profit/Sales -1.27% 1.74% 6.45%

7.4 Projected Cash Flow

The following table and chart highlight the projected cash flow for the next three years.

Telephone sales business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $340,000 $359,000 $404,000
Subtotal Cash from Operations $340,000 $359,000 $404,000
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 $340,000 $359,000 $404,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $132,000 $146,000 $158,000
Bill Payments $177,691 $204,976 $216,840
Subtotal Spent on Operations $309,691 $350,976 $374,840
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 $10,800 $10,800 $10,800
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $320,491 $361,776 $385,640
Net Cash Flow $19,509 ($2,776) $18,360
Cash Balance $21,509 $18,733 $37,092

7.5 Business Ratios

Business ratios for the years of this plan are shown below.  Industry profile ratios based on the Standard Industrial Classification (SIC) code 3661, Telephone Equipment, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 5.59% 12.53% 10.50%
Percent of Total Assets
Inventory 17.79% 19.22% 16.33% 26.50%
Other Current Assets 0.00% 0.00% 0.00% 31.10%
Total Current Assets 43.38% 42.89% 55.17% 83.50%
Long-term Assets 56.62% 57.11% 44.83% 16.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 20.44% 21.25% 18.76% 48.90%
Long-term Liabilities 46.63% 35.88% 18.43% 13.30%
Total Liabilities 67.07% 57.13% 37.19% 62.20%
Net Worth 32.93% 42.87% 62.81% 37.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 53.15% 54.87% 58.91% 41.50%
Selling, General & Administrative Expenses 54.42% 53.14% 52.47% 26.80%
Advertising Expenses 0.00% 0.00% 0.00% 1.00%
Profit Before Interest and Taxes 0.03% 3.43% 9.78% 2.60%
Main Ratios
Current 2.12 2.02 2.94 1.71
Quick 1.25 1.11 2.07 0.97
Total Debt to Total Assets 67.07% 57.13% 37.19% 62.20%
Pre-tax Return on Net Worth -15.59% 26.29% 62.03% 3.00%
Pre-tax Return on Assets -5.13% 11.27% 38.96% 7.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -1.27% 1.74% 6.45% n.a
Return on Equity -15.59% 18.40% 43.42% n.a
Activity Ratios
Inventory Turnover 10.34 10.74 10.78 n.a
Accounts Payable Turnover 11.34 12.17 12.17 n.a
Payment Days 27 30 29 n.a
Total Asset Turnover 4.04 4.54 4.23 n.a
Debt Ratios
Debt to Net Worth 2.04 1.33 0.59 n.a
Current Liab. to Liab. 0.30 0.37 0.50 n.a
Liquidity Ratios
Net Working Capital $19,285 $17,129 $34,769 n.a
Interest Coverage 0.02 3.64 17.17 n.a
Additional Ratios
Assets to Sales 0.25 0.22 0.24 n.a
Current Debt/Total Assets 20% 21% 19% n.a
Acid Test 1.25 1.11 2.07 n.a
Sales/Net Worth 12.28 10.58 6.74 n.a
Dividend Payout 0.00 0.00 0.00 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
Sales
Land Line Phones 0% $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Cell Phones 0% $5,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Cell Phone Accessories 0% $4,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Cell Service Plans 0% $10,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000
Total Sales $21,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000
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
Land Line Phones $500 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700
Cell Phones $1,200 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Cell Phone Accessories $1,000 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300
Cell Service Plans $7,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Subtotal Direct Cost of Sales $9,700 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600
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
Robert Conway 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Store Staff (4) 0% $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5
Total Payroll $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000

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 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 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% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 $21,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000
Direct Cost of Sales $9,700 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $9,700 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600 $13,600
Gross Margin $11,300 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400 $15,400
Gross Margin % 53.81% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10% 53.10%
Expenses
Payroll $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000
Sales and Marketing and Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll Taxes 15% $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050 $15,050
Profit Before Interest and Taxes ($3,750) $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
EBITDA ($3,550) $550 $550 $550 $550 $550 $550 $550 $550 $550 $550 $550
Interest Expense $409 $402 $394 $387 $379 $372 $364 $357 $349 $342 $334 $327
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($4,159) ($52) ($44) ($37) ($29) ($22) ($14) ($7) $1 $8 $16 $23
Net Profit/Sales -19.81% -0.18% -0.15% -0.13% -0.10% -0.07% -0.05% -0.02% 0.00% 0.03% 0.05% 0.08%

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 $21,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000
Subtotal Cash from Operations $21,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000
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 $21,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000 $29,000
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 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000
Bill Payments $142 $4,534 $12,689 $17,844 $17,836 $17,829 $17,821 $17,814 $17,806 $17,799 $17,791 $17,784
Subtotal Spent on Operations $11,142 $15,534 $23,689 $28,844 $28,836 $28,829 $28,821 $28,814 $28,806 $28,799 $28,791 $28,784
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 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
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 $12,042 $16,434 $24,589 $29,744 $29,736 $29,729 $29,721 $29,714 $29,706 $29,699 $29,691 $29,684
Net Cash Flow $8,958 $12,566 $4,411 ($744) ($736) ($729) ($721) ($714) ($706) ($699) ($691) ($684)
Cash Balance $10,958 $23,524 $27,934 $27,190 $26,454 $25,725 $25,004 $24,290 $23,583 $22,884 $22,193 $21,509
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 $2,000 $10,958 $23,524 $27,934 $27,190 $26,454 $25,725 $25,004 $24,290 $23,583 $22,884 $22,193 $21,509
Inventory $30,000 $20,300 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960 $14,960
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $32,000 $31,258 $38,484 $42,894 $42,150 $41,414 $40,685 $39,964 $39,250 $38,543 $37,844 $37,153 $36,469
Long-term Assets
Long-term Assets $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
Accumulated Depreciation $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400
Total Long-term Assets $50,000 $49,800 $49,600 $49,400 $49,200 $49,000 $48,800 $48,600 $48,400 $48,200 $48,000 $47,800 $47,600
Total Assets $82,000 $81,058 $88,084 $92,294 $91,350 $90,414 $89,485 $88,564 $87,650 $86,743 $85,844 $84,953 $84,069
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 $4,117 $12,095 $17,249 $17,242 $17,235 $17,228 $17,220 $17,213 $17,206 $17,199 $17,191 $17,184
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 $4,117 $12,095 $17,249 $17,242 $17,235 $17,228 $17,220 $17,213 $17,206 $17,199 $17,191 $17,184
Long-term Liabilities $50,000 $49,100 $48,200 $47,300 $46,400 $45,500 $44,600 $43,700 $42,800 $41,900 $41,000 $40,100 $39,200
Total Liabilities $50,000 $53,217 $60,295 $64,549 $63,642 $62,735 $61,828 $60,920 $60,013 $59,106 $58,199 $57,291 $56,384
Paid-in Capital $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Retained Earnings ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000)
Earnings $0 ($4,159) ($4,211) ($4,255) ($4,292) ($4,321) ($4,343) ($4,357) ($4,363) ($4,363) ($4,354) ($4,338) ($4,315)
Total Capital $32,000 $27,841 $27,789 $27,745 $27,708 $27,679 $27,658 $27,643 $27,637 $27,637 $27,646 $27,662 $27,685
Total Liabilities and Capital $82,000 $81,058 $88,084 $92,294 $91,350 $90,414 $89,485 $88,564 $87,650 $86,743 $85,844 $84,953 $84,069
Net Worth $32,000 $27,841 $27,789 $27,745 $27,708 $27,679 $27,658 $27,643 $27,637 $27,638 $27,646 $27,662 $27,685

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