Michael's Video Service
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 | |||||||||||||
| Video services | 0% | $5,000 | $7,000 | $12,000 | $13,000 | $13,000 | $13,000 | $14,000 | $14,000 | $14,000 | $15,000 | $15,000 | $14,000 |
| Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Sales | $5,000 | $7,000 | $12,000 | $13,000 | $13,000 | $13,000 | $14,000 | $14,000 | $14,000 | $15,000 | $15,000 | $14,000 | |
| 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 | |
| Video services | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Subtotal Direct Cost of Sales | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
| 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 | ||
| Michael Morisson | 0% | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
| Other | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 |
| Total People | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |
| Total Payroll | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | |
| 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% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |
| 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 | $5,000 | $7,000 | $12,000 | $13,000 | $13,000 | $13,000 | $14,000 | $14,000 | $14,000 | $15,000 | $15,000 | $14,000 | |
| Direct Cost of Sales | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
| Gross Margin | $4,600 | $6,600 | $11,600 | $12,600 | $12,600 | $12,600 | $13,600 | $13,600 | $13,600 | $14,600 | $14,600 | $13,600 | |
| Gross Margin % | 92.00% | 94.29% | 96.67% | 96.92% | 96.92% | 96.92% | 97.14% | 97.14% | 97.14% | 97.33% | 97.33% | 97.14% | |
| Expenses | |||||||||||||
| Payroll | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | |
| Sales and Marketing and Other Expenses | $1,300 | $1,300 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | |
| Depreciation | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | |
| Gas | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
| Utilities & phone | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
| Rent | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | |
| Payroll Taxes | 15% | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Operating Expenses | $8,800 | $8,800 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | $9,100 | |
| Profit Before Interest and Taxes | ($4,200) | ($2,200) | $2,500 | $3,500 | $3,500 | $3,500 | $4,500 | $4,500 | $4,500 | $5,500 | $5,500 | $4,500 | |
| EBITDA | ($2,200) | ($200) | $4,500 | $5,500 | $5,500 | $5,500 | $6,500 | $6,500 | $6,500 | $7,500 | $7,500 | $6,500 | |
| Interest Expense | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | |
| Taxes Incurred | ($2,010) | ($1,175) | $0 | $250 | $250 | $250 | $500 | $500 | $500 | $750 | $750 | $500 | |
| Net Profit | ($4,690) | ($3,525) | $0 | $750 | $750 | $750 | $1,500 | $1,500 | $1,500 | $2,250 | $2,250 | $1,500 | |
| Net Profit/Sales | -93.80% | -50.36% | 0.00% | 5.77% | 5.77% | 5.77% | 10.71% | 10.71% | 10.71% | 15.00% | 15.00% | 10.71% | |
| 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 | $1,250 | $1,750 | $3,000 | $3,250 | $3,250 | $3,250 | $3,500 | $3,500 | $3,500 | $3,750 | $3,750 | $3,500 | |
| Cash from Receivables | $0 | $125 | $3,800 | $5,375 | $9,025 | $9,750 | $9,750 | $9,775 | $10,500 | $10,500 | $10,525 | $11,250 | |
| Subtotal Cash from Operations | $1,250 | $1,875 | $6,800 | $8,625 | $12,275 | $13,000 | $13,250 | $13,275 | $14,000 | $14,250 | $14,275 | $14,750 | |
| 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 | $1,250 | $1,875 | $6,800 | $8,625 | $12,275 | $13,000 | $13,250 | $13,275 | $14,000 | $14,250 | $14,275 | $14,750 | |
| 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 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | |
| Bill Payments | $110 | $3,318 | $4,174 | $5,642 | $6,817 | $5,850 | $5,892 | $7,067 | $6,133 | $7,075 | $6,350 | $6,375 | |
| Subtotal Spent on Operations | $4,110 | $7,318 | $8,174 | $9,642 | $10,817 | $9,850 | $9,892 | $11,067 | $10,133 | $11,075 | $10,350 | $10,375 | |
| 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 | $4,110 | $7,318 | $8,174 | $9,642 | $10,817 | $9,850 | $9,892 | $11,067 | $10,133 | $11,075 | $10,350 | $10,375 | |
| Net Cash Flow | ($2,860) | ($5,443) | ($1,374) | ($1,017) | $1,458 | $3,150 | $3,358 | $2,208 | $3,867 | $3,175 | $3,925 | $4,375 | |
| Cash Balance | $57,140 | $51,698 | $50,323 | $49,307 | $50,765 | $53,915 | $57,273 | $59,482 | $63,348 | $66,523 | $70,448 | $74,823 | |
| 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 | $60,000 | $57,140 | $51,698 | $50,323 | $49,307 | $50,765 | $53,915 | $57,273 | $59,482 | $63,348 | $66,523 | $70,448 | $74,823 |
| Accounts Receivable | $0 | $3,750 | $8,875 | $14,075 | $18,450 | $19,175 | $19,175 | $19,925 | $20,650 | $20,650 | $21,400 | $22,125 | $21,375 |
| Inventory | $2,000 | $1,600 | $1,200 | $800 | $1,400 | $1,000 | $600 | $1,200 | $800 | $1,400 | $1,000 | $600 | $1,200 |
| Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Current Assets | $62,000 | $62,490 | $61,773 | $65,198 | $69,157 | $70,940 | $73,690 | $78,398 | $80,932 | $85,398 | $88,923 | $93,173 | $97,398 |
| Long-term Assets | |||||||||||||
| Long-term Assets | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 | $240,000 |
| Accumulated Depreciation | $0 | $2,000 | $4,000 | $6,000 | $8,000 | $10,000 | $12,000 | $14,000 | $16,000 | $18,000 | $20,000 | $22,000 | $24,000 |
| Total Long-term Assets | $240,000 | $238,000 | $236,000 | $234,000 | $232,000 | $230,000 | $228,000 | $226,000 | $224,000 | $222,000 | $220,000 | $218,000 | $216,000 |
| Total Assets | $302,000 | $300,490 | $297,773 | $299,198 | $301,157 | $300,940 | $301,690 | $304,398 | $304,932 | $307,398 | $308,923 | $311,173 | $313,398 |
| 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 | $3,180 | $3,988 | $5,413 | $6,622 | $5,655 | $5,655 | $6,863 | $5,897 | $6,863 | $6,138 | $6,138 | $6,863 |
| 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 | $3,180 | $3,988 | $5,413 | $6,622 | $5,655 | $5,655 | $6,863 | $5,897 | $6,863 | $6,138 | $6,138 | $6,863 |
| Long-term Liabilities | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 | $300,000 |
| Total Liabilities | $300,000 | $303,180 | $303,988 | $305,413 | $306,622 | $305,655 | $305,655 | $306,863 | $305,897 | $306,863 | $306,138 | $306,138 | $306,863 |
| Paid-in Capital | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 | $17,000 |
| Retained Earnings | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) | ($15,000) |
| Earnings | $0 | ($4,690) | ($8,215) | ($8,215) | ($7,465) | ($6,715) | ($5,965) | ($4,465) | ($2,965) | ($1,465) | $785 | $3,035 | $4,535 |
| Total Capital | $2,000 | ($2,690) | ($6,215) | ($6,215) | ($5,465) | ($4,715) | ($3,965) | ($2,465) | ($965) | $535 | $2,785 | $5,035 | $6,535 |
| Total Liabilities and Capital | $302,000 | $300,490 | $297,773 | $299,198 | $301,157 | $300,940 | $301,690 | $304,398 | $304,932 | $307,398 | $308,923 | $311,173 | $313,398 |
| Net Worth | $2,000 | ($2,690) | ($6,215) | ($6,215) | ($5,465) | ($4,715) | ($3,965) | ($2,465) | ($965) | $535 | $2,785 | $5,035 | $6,535 |
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