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Financial Projections Model

For Business Plans


Frank Moyes and Stephen Lawrence
Deming Center for Entrepreneurship
Leeds College of Business
University of Colorado
Boulder, Colorado

Copyright 2003 by the Regents of the University of Colorado

Instructions
Financial Projections Model
v6.8.3
This financial model is designed to enable entrepreneurs and students project the
financial results of their ventures for a five-year period. As with all models there are
certain simplifying assumptions that have been made. Each of the assumption
spreadsheets has an accompanying Comments box (denoted by a cell with small red
triangle in the upper right corner) that provides suggestions on how to complete the
spreadsheet and the underlying assumptions to the model.
You will notice that the cells in the spreadsheet are color-coded. This has been done to
assist you in entering data, creating or changing formulae, or deleting data, formulae and
links.
Enter data and information in Green shaded cells only.
Blue shaded cells calculate results within a spreadsheet.
Data in Yellow shaded cells is transferred to other worksheets.
Purple shaded cells bring in data from other spreadsheets.
In the Green and Blue shaded cells, data and formulas may changed, moved or deleted.
The current calculations are for illustration only -- you will need to tailor these
spreadsheets to fit your plan.
In the Yellow shaded cells data and formulas may be changed, but not deleted.
DO NOT delete the Purple shaded cells -- they link one spreadsheet with others.
There are 7 principal spreadsheet outputs of this model:
INCOME: Income Statement
BALANCE: Balance Sheet
CASHFLOW: Cash Flow Statement
BREAKEVEN: Break-even analysis
SUMMARY: Analysis of key measures
INCOME-MOS: Income Statements by months for Years 1 to 5
CASHFLOW-MOS: Cash flow Statements by months for Years 1 and 2, and
by quarters for Years 3 to 5
VAL-1 & VAL-2: Venture capital method for valuing companies
All other spreadsheets are to be used for calculating the underlying assumptions of the 7
principal spreadsheets:
COMPS: Comparison of financial measures to peer companies
REVENUE: Revenue Projections
COST OF REV: Cost of Goods Sold
OPER EXPEN: Operating Expenses
PROP & EQUIP: Capital Expenditures, Depreciation, and Net Fixed Assets
SALARIES: Salary Personnel
EXTRA: Extraordinary Income and Expense
TAXES: Tax calculation
WORKCAP: Working Capital
FUNDING: Equity, Debt, Interest Expense, Interest Income, Dividends and
Retained Earnings
These assumption spreadsheets are linked to each other and to the 7 principal
spreadsheets. When you make a change in one of the spreadsheets, the impact is
automatically recalculated for all other spreadsheets.
When doing financial projections, it is easy to get lost in the trees and lose the sense of
what is reality. Most errors can be identified if you continuously ask yourself Does this
result make sense? The COMPS spreadsheet, where you look at peer companies, can be
particularly helpful as a reality test.
There is an example in the model with which you can experiment. When you are ready to
start your own projections, clear all the numbers in the green shaded cells, and then you
can begin to enter new numbers. Enter the name of your company in the first cell of the
COMPS spreadsheet. Before you begin, make a copy of the model on a separate disk.
This original version of the model has been used since the mid-1980s. It has undergone
numerous revisions over that period. Since 1998, students in the Business Plan
Preparation course at the University of Colorado have used it to prepare their business
plans. We have appreciated their suggestions for improvements and would encourage all
users to send us comments and suggestions.

Created by Frank Moyes and Stephen Lawrence


Deming Center for Entrepreneurship
Leeds School of Business
University of Colorado
Boulder, Colorado

Copyright 2001 by the Regents of the University of Colorado

4/15/2014
7:00 AM

XYZ Company

Notes

Peer Company Comparisons

Company A

Company B

Company C

Select Best
Comparison

Projections

Year 1

Year 2

Year 3

Year 4

Year 5

10.0%
15.0%
8.0%
16.0%
9.0%
2.3
1.2

8.3%
8.3%
8.7%
7.9%
23.7%
4.2
0.00

8.3%
8.3%
8.7%
7.9%
11.5%
2.0
0.32

8.3%
6.7%
8.7%
6.3%
9.3%
2.0
0.18

8.3%
6.7%
8.7%
6.3%
7.3%
1.9
0.10

8.3%
6.7%
8.7%
6.3%
5.5%
2.1
0.04

30.0%
30.0%
30.0%
30.0%
40.0%
12.0%
12.0%
3.0%
14.0%
5.0%

30.0%

17.0%
12.0%
12.0%
3.0%
14.0%
5.0%

-11.7%
22.9%
14.9%
17.2%
55.0%
-66.7%
-71.2%
4.3%
-66.9%
-71.2%

32.7%
19.0%
7.9%
8.9%
35.7%
-3.0%
-3.0%
2.5%
-0.5%
-4.2%

41.5%
18.5%
7.2%
8.1%
33.8%
7.7%
7.7%
2.5%
10.2%
7.2%

42.5%
17.9%
7.6%
7.3%
32.9%
9.6%
9.6%
2.3%
11.9%
6.2%

46.0%
18.0%
6.7%
6.8%
31.5%
14.5%
14.5%
2.0%
16.5%
8.7%

Returns
Return on Assets
Return on Equity
Return on Capital (LT Debt + Equity)

12.0%
15.0%
15.0%

12.0%
15.0%
15.0%

-74.1%
-90.4%
-90.4%

-9.5%
-20.4%
-13.9%

21.7%
39.7%
32.4%

20.0%
36.1%
32.6%

27.2%
45.2%
43.5%

Growth
Revenue Growth Rate - CAGR:
Net Earnings Growth Rate - CAGR:

15.0%
12.0%

15.0%
12.0%

425.0%
Negative

85.7%
Negative

66.7%
42.3%

60.0%
124.6%

Ratios
Accounts Receivable % of Rev
Inventory % of Rev
Accounts Payable % of Rev
Working Capital % of Rev
Net Fixed Assets % of Rev
Current Ratio
Debt to Capital (LT Debt + Equity)

10.0%
15.0%
8.0%
16.0%
9.0%
2.3
1.2

Profitability
Gross Profit % of Rev
Sales & Marketing % of Rev
Research & Development % of Rev
General & Administration % of Rev
Operating Expenses % of Rev
Earnings from Operations % of Rev
EBIT % of Rev
Depreciation % of Rev
EBITDA % of Rev
Net Earnings % of Rev

4/15/2014
7:00 AM

XYZ Company
Revenue Projections
Years 1 to 5
($)
Year 1
Product A
Number of Units
Price per unit
Total
Service B
Number of Customers
Fee per Customer
Total

Net Revenue

Months
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year
Average Revenue
by Month
by Quarter

Year 2

Year 3

Year 4

Year 5

20,000
50
1,000,000

75,000
50
3,750,000

150,000
45
6,750,000

250,000
45
11,250,000

400,000
40
16,000,000

50,000
30
1,500,000

100,000
30
3,000,000

200,000
25
5,000,000

500,000
20
10,000,000

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

Revenues by Months & Quarters


($)
Year 1
Year 2
Year 3
0
0
0
0
50,000
80,000
100,000
230,000
100,000
120,000
150,000
370,000
120,000
130,000
150,000
400,000
1,000,000

262,500
262,500
367,500
892,500
315,000
367,500
367,500
1,050,000
420,000
525,000
525,000
1,470,000
577,500
630,000
630,000
1,837,500
5,250,000

83,333
250,000

437,500
1,312,500

Year 4

Year 5

2,000,000

3,000,000

5,000,000

2,500,000

4,000,000

6,000,000

2,500,000

4,500,000

7,000,000

2,750,000
9,750,000

4,750,000
16,250,000

8,000,000
26,000,000

812,500
2,437,500

1,354,167
4,062,500

2,166,667
6,500,000

4/15/2014
7:00 AM

XYZ Company
Cost of Revenues
Years 1 to 5
($)
Year 1
Revenue

1,000,000

Year 2

Year 3

Year 4
16,250,000

Year 5

5,250,000

9,750,000

26,000,000

15.00
10.00
25.00
20,000
500,000
69,000
569,000

14.00
10.00
24.00
75,000
1,800,000
227,700
2,027,700

11.00
7.00
18.00
150,000
2,700,000
552,000
3,252,000

10.00
6.50
16.50
250,000
4,125,000
864,000
4,989,000

9.00
6.00
15.00
400,000
6,000,000
1,200,000
7,200,000

120,750

212,750

480,000

1,500,000

2,750,000

276,000
36,714
50,000
25,000

690,000
91,714
200,000
100,000

990,000
137,429
300,000
150,000

1,410,000
190,286
300,000
300,000

2,000,000
243,143
450,000
350,000

40,000
1,117,464
111.7%

210,000
3,532,164
67.3%

390,000
5,699,429
58.5%

650,000
9,339,286
57.5%

1,040,000
14,033,143
54.0%

729,750
387,714
1,117,464

2,450,450
1,081,714
3,532,164

4,122,000
1,577,429
5,699,429

7,139,000
2,200,286
9,339,286

10,990,000
3,043,143
14,033,143

Cost of Revenue
Product A
Material Costs per Unit
Subcontact Costs per Unit
Total Direct Costs per Unit
Unit Sales
Total Direct Costs
Labor Costs
Total Direct Costs
Service B
Service Personnel Costs
Other Expenses

Salary Expenses
Depreciation
Facility costs (rent, energy)
System Costs

All other costs % of Revenue


Total Cost of Revenues
% of Revenue

4%

Allocation of Cost of Revenue between:


Variable
Fixed
Total

Cost of Revenues by Months & Quarters


($)
Year 1
Year 2
Year 3
Year 4
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

0
0
0
0
55,873
89,397
111,746
257,017
111,746
134,096
167,620
413,462
134,096
145,270
167,620
446,986
1,117,464

176,608
176,608
247,252
600,468
211,930
247,252
247,252
706,433
282,573
353,216
353,216
989,006
388,538
423,860
423,860
1,236,258
3,532,164

0
0
0
1,169,114
0
0
0
1,461,392
0
0
0
1,461,392
0
0
0
1,607,531
5,699,429

0
0
0
1,724,176
0
0
0
2,298,901
0
0
0
2,586,264
0
0
0
2,729,945
9,339,286

Year 5
0
0
0
2,698,681
0
0
0
3,238,418
0
0
0
3,778,154
0
0
0
4,317,890
14,033,143

4/15/2014
7:00 AM

XYZ Company
Operating Expenses
Years 1 to 5
($)
Year 1
Net Revenues

Year 2

Year 3

Year 4

Year 5

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

69,000
50,000
50,000

270,250
262,500
150,000

432,900
487,500
300,000

624,000
812,500
500,000

816,000
1,300,000
1,000,000

60,000
229,000
22.9%

315,000
997,750
19.0%

585,000
1,805,400
18.5%

975,000
2,911,500
17.9%

1,560,000
4,676,000
18.0%

69,000
50,000

195,500
60,000

310,050
100,000

504,000
250,000

672,000
300,000

30,000
149,000
14.9%

157,500
413,000
7.9%

292,500
702,550
7.2%

487,500
1,241,500
7.6%

780,000
1,752,000
6.7%

125,000
6,667
20,000

300,150
40,000
20,000

388,440
106,667
100,000

573,600
183,333
110,000

784,800
266,667
200,000

20,000

105,000

195,000

325,000

520,000

171,667
17.2%

465,150
8.9%

790,107
8.1%

1,191,933
7.3%

1,771,467
6.8%

Total Operating Expenses


% of Revenue

549,667
55.0%

1,875,900
35.7%

3,298,057
33.8%

5,344,933
32.9%

8,199,467
31.5%

Allocation of Operating Expenses between:


Vaiable
Fixed
Total

160,000
389,667

840,000
1,035,900

1,560,000
1,738,057

2,600,000
2,744,933

4,160,000
4,039,467

549,667

1,875,900

3,298,057

5,344,933

8,199,467

Sales & Marketing


Drivers
Salaries and Benefits
Commissions % of Revenue

5%

Direct Mail Campaign

All other expenses % of Revenue


Total Sales and Marketing
% of Revenue

6%

Research & Development


Drivers

Salaries and Benefits


Testing
All other expenses % of Revenue
Total Reaserch & Development
% of Revenue

3%

General & Administration


Drivers

Salaries and Benefits


Depreciation
Rent and Utilities

All other expenses % of Revenue

2%

Total General & Administration


% of Revenue

Sales & Marketing by Months & Quarters


($)
Year 1
Year 2
Year 3
Year 4
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

0
0
0
0
11,450
18,320
22,900
52,670
22,900
27,480
34,350
84,730
27,480
29,770
34,350
91,600
229,000

49,888
49,888
69,843
169,618
59,865
69,843
69,843
199,550
79,820
99,775
99,775
279,370
109,753
119,730
119,730
349,213
997,750

0
0
0
370,338
0
0
0
462,923
0
0
0
462,923
0
0
0
509,215
1,805,400

0
0
0
537,508
0
0
0
716,677
0
0
0
806,262
0
0
0
851,054
2,911,500

Research & Development by Months & Quarters


($)
Year 1
Year 2
Year 3
Year 4
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

0
0
0
0
7,450
11,920
14,900
34,270
14,900
17,880
22,350
55,130
17,880
19,370
22,350
59,600
149,000

20,650
20,650
28,910
70,210
24,780
28,910
28,910
82,600
33,040
41,300
41,300
115,640
45,430
49,560
49,560
144,550
413,000

0
0
0
144,113
0
0
0
180,141
0
0
0
180,141
0
0
0
198,155
702,550

0
0
0
229,200
0
0
0
305,600
0
0
0
343,800
0
0
0
362,900
1,241,500

General & Administrative by Months & Quarters


($)
Year 1
Year 2
Year 3
Year 4
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10

0
0
0
0
8,583
13,733
17,167
39,483
17,167
20,600
25,750
63,517
20,600

23,258
23,258
32,561
79,076
27,909
32,561
32,561
93,030
37,212
46,515
46,515
130,242
51,167

0
0
0
162,073
0
0
0
202,591
0
0
0
202,591
0

0
0
0
220,049
0
0
0
293,399
0
0
0
330,074
0

4/15/2014
7:00 AM

Year 5
0
0
0
899,231
0
0
0
1,079,077
0
0
0
1,258,923
0
0
0
1,438,769
4,676,000

Year 5
0
0
0
336,923
0
0
0
404,308
0
0
0
471,692
0
0
0
539,077
1,752,000

Year 5
0
0
0
340,667
0
0
0
408,800
0
0
0
476,933
0

Month 11
Month 12
Total 4th Quarter
Total for year

22,317
25,750
68,667
171,667

55,818
55,818
162,803
465,150

0
0
222,851
790,107

0
0
348,411
1,191,933

4/15/2014
0
7:00 AM
0
545,067
1,771,467

4/15/2014
7:00 AM

XYZ Company
Personnel
Years 1 to 5
($)

Net Revenues
Sales & Marketing
Sales Manager
Marketing Manager
Customer service
Tech support
(other)
(other)
(other)
Total Salary
Benefits
Percent (%)
Total benefit costs
Total S & M Compensation
% of Revenue
Research and Development
R & D Manager
Engineers
Technicians
Subcontract
(other)
(other)
Total Salary
Benefits
Percent (%)
Total benefit costs
Total R & D Compensation
% of Revenue
General & Administration
Chief Executive Officer
Chief Financial Officer
Accounting
Secretarial
Clerks and admin personnel
(other)
(other)
Total Salary
Benefits
Percent (%)
Total benefit costs
Total G & A Compensation
% of Revenue

Year 1

Year 2

Year 3

Year 4

Year 5

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

60,000

80,000
80,000
40,000
35,000

100,000
100,000
120,000
50,000

125,000
125,000
200,000
70,000

150,000
150,000
250,000
130,000

60,000

235,000

370,000

520,000

680,000

15%
9,000
69,000
6.9%

15%
35,250
270,250
5.1%

17%
62,900
432,900
4.4%

20%
104,000
624,000
3.8%

20%
136,000
816,000
3.1%

60,000

80,000
60,000
30,000

100,000
130,000
35,000

125,000
230,000
65,000

150,000
300,000
110,000

60,000

170,000

265,000

420,000

560,000

15%
9,000
69,000
6.9%

15%
25,500
195,500
3.7%

17%
45,050
310,050
3.2%

20%
84,000
504,000
3.1%

20%
112,000
672,000
2.6%

60,000

80,000
50,000
45,000
26,000
60,000

100,000
60,000
25,000
27,000
120,000

125,000
75,000
50,000
28,000
200,000

150,000
100,000
75,000
29,000
300,000

125,000

261,000

332,000

478,000

654,000

15%
0
125,000
12.5%

15%
39,150
300,150
5.7%

17%
56,440
388,440
4.0%

20%
95,600
573,600
3.5%

20%
130,800
784,800
3.0%

40,000
25,000

Cost of Revenue
Manufacturing Personnel
Operations Manager
Quality Assurance
Materials and Logistics
Engineering
Other personnel
(other...)
Total Salary
Benefits
Percent (%)
Total benefit costs
Total Salary Costs
Hourly Personnel
Number of employees
Average wages per employee
Total wages
Benefits
Percent (%)
Total benefit costs
Total W age Costs
Ser vic e Per s o n n el
Number of employees
Salary per employee
Total salaries
Benefits
Percent (%)
Total benefit costs
Total Salary Costs

4/15/2014
7:00 AM
100,000
50,000
40,000
50,000

125,000
100,000
150,000
75,000
150,000

150,000
150,000
200,000
125,000
200,000

175,000
300,000
300,000
150,000
250,000

200,000
350,000
450,000
300,000
300,000

240,000

600,000

825,000

1,175,000

1,600,000

15%
36,000
276,000

15%
90,000
690,000

20%
165,000
990,000

20%
235,000
1,410,000

25%
400,000
2,000,000

3
20,000
60,000

9
22,000
198,000

20
23,000
460,000

30
24,000
720,000

40
24,000
960,000

20%
144,000

25%
240,000

15%
9,000

15%
29,700

20%
92,000

69,000

227,700

552,000

864,000

1,200,000

3
35,000
105,000

5
37,000
185,000

10
40,000
400,000

25
50,000
1,250,000

40
55,000
2,200,000

15%

15%

20%

20%

25%

15,750
120,750

27,750
212,750

80,000
480,000

250,000
1,500,000

550,000
2,750,000

Total COR's Compensation


% of Revenue

465,750
46.6%

1,130,450
21.5%

2,022,000
20.7%

3,774,000
23.2%

5,950,000
22.9%

Total Salary & Wages


Total Benefits
Total Compensation
% of Revenue

545,000
63,000
728,750
72.9%

1,464,000
219,600
1,896,350
36.1%

2,252,000
421,390
3,153,390
32.3%

3,313,000
662,600
5,475,600
33.7%

4,454,000
1,018,800
8,222,800
31.6%

4/15/2014
7:00 AM

XYZ Company
Extraordinary Income & Expense
Years 1 to 5
($)
Year 1
Income
(Item)
(Item)
(Item)
Total
Start-up expenses
Legal
Relocation
(Item)
Total
Total Extraordinary Income/(Expense)

Year 2

Year 3

Year 4

Year 5

0
0

0
0

0
0

0
0

25,000
20,000
45,000
(45,000)

Extraordinary Income and Expense by Months & Quarters


($)
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

(25,000)
(20,000)
(45,000)

0
0

0
0

0
0

0
0

0
(45,000)

4/15/2014
7:00 AM

XYZ Company
Taxes
Years 1 to 5
($)

Net Revenues
Income Tax (Rate Federal & State)
Net Earnings Before Taxes
Cumulative
Taxes
Percent of Revenues

Year 1

Year 2

Year 3

Year 4

Year 5

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

0.40

0.40

0.40

(712,131)
(712,131)

(218,064)
(930,195)

704,515
(225,681)

0
0.0%

0
0.0%

0
0.0%

0.40
1,520,781
1,295,100
(518,040)
-3.2%

0.40
3,753,390
5,048,491
(1,501,356)
-5.8%

4/15/2014
7:00 AM

XYZ Company
Property and Equipment
Years 1 to 5
($)

Net Revenues
Capital Expenditures
Computers, Software & Office Equipment
Plant & Equipment
Other
Total Capital Expenditures
% of Revenue

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Purchased
Assets

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

20,000
250,000
10,000
280,000
28.0%

100,000
350,000
50,000
500,000
9.5%

200,000
250,000
100,000
550,000
5.6%

250,000
300,000
100,000
650,000
4.0%

350,000
300,000
100,000
750,000
2.9%

Depreciation Computers, Sofware & Office Equipment (allocated to General & Administrative Expenses)
Depreciation Rate: Years
1
3
3
3
3
Year 0
0
0
0
0
Year 1
6,667
6,667
6,667
0
Year 2
33,333
33,333
33,333
Year 3
66,667
66,667
Year 4
83,333
Year 5
Total Depreciation
6,667
40,000
106,667
183,333

3
0
0
0
66,667
83,333
116,667
266,667

Depreciation on Plant and Equipment (allocated to Cost of Revenue)


Depreciation Rate: Years
1
7
Year 0
0
Year 1
35,714
Year 2
Year 3
Year 4
Year 5
Total Depreciation
35,714

7
0
35,714
50,000
35,714
42,857
42,857
207,143

Depreciation Other (allocated to Cost of Revenue)


Depreciation Rate: Years
1
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Total Depreciation

Total Depreciation
% of Revenue
Property & Equipment
Gross Asset Value
Accumulated Depreciation
Net Property and Equipment
% of Revenue

Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

7
0
35,714
50,000

7
0
35,714
50,000
35,714

7
0
35,714
50,000
35,714
42,857

85,714

121,429

164,286

10
0
1,000

10
0
1,000
5,000

10
0
1,000
5,000
10,000

10
0
1,000
5,000
10,000
10,000

1,000

6,000

16,000

26,000

10
0
1,000
5,000
10,000
10,000
10,000
36,000

43,381
4.3%

131,714
2.5%

244,095
2.5%

373,619
2.3%

509,810
2.0%

280,000
43,381
236,619
23.7%

780,000
175,095
604,905
11.5%

1,330,000
419,190
910,810
9.3%

1,980,000
792,810
1,187,190
7.3%

2,730,000
1,302,619
1,427,381
5.5%

Capital Expenditures by Months & Quarters


($)
Year 1
Year 2
Year 3
Year 4

Year 5

0
0

50,000
100,000
50,000
200,000
40,000

100,000
100,000
200,000

100,000

200,000

200,000

100,000
100,000

200,000

200,000

200,000

40,000

100,000
100,000

100,000

100,000

200,000

0
280,000

100,000
100,000
500,000

150,000
550,000

150,000
650,000

150,000
750,000

40,000
40,000

4/15/2014
7:00 AM

XYZ Company
Working Capital
Years 1 to 5
($)
Net Revenues

Year 1
Year 2
1,000,000 5,250,000

Year 3
9,750,000

Year 4
Year 5
16,250,000 26,000,000

Accounts Receivable
% of Revenue
Days Outstanding
Accounts Receivable
(Increase)/Decrease from Prev. Period

8.3%
30
149,400
(149,400)

8.3%
30
627,480
(478,080)

8.3%
30
913,000
(285,520)

8.3%
30
1,577,000
(664,000)

8.3%
30
2,656,000
(1,079,000)

Inventory
% of Revenue
Inventory Turns
Inventory Days
Inventory
(Increase)/Decrease from Prev. Period

8.3%
12
30
149,400
(149,400)

8.3%
12
30
627,480
(478,080)

6.7%
15
24
737,000
(109,520)

6.7%
15
24
1,273,000
(536,000)

6.7%
15
24
2,144,000
(871,000)

Other Current Assets


% of Revenue
Days
Other CA Value
(Increase)/Decrease from Prev. Period

1.0%
4
18,000
(18,000)

1.0%
4
75,600
(57,600)

1.0%
4
110,000
(34,400)

1.0%
4
190,000
(80,000)

1.0%
4
320,000
(130,000)

Accounts Payable & Accrued Expenses


% of Revenue
Days
AP & Accrued Value
Increase/(Decrease) from Prev. Period

8.7%
31
155,720
155,720

8.7%
31
657,720
502,000

8.7%
31
957,000
299,280

8.7%
31
1,653,000
696,000

8.7%
31
2,784,000
1,131,000

1.0%
4
18,000
18,000

1.0%
4
75,600
57,600

1.0%
4
110,000
34,400

1.0%
4
190,000
80,000

1.0%
4
320,000
130,000

Year 1

($)
Year 2

Year 3

Year 4

Year 5

0
0

262,500
262,500

0
0

0
0

0
0

0
0
50,000
80,000
100,000
230,000
100,000
120,000
150,000
370,000
120,000
130,000
150,000
400,000
1,000,000

367,500
892,500
315,000
367,500
367,500
1,050,000
420,000
525,000
525,000
1,470,000
577,500
630,000
630,000
1,837,500
5,250,000

0
2,000,000
0
0
0
2,500,000
0
0
0
2,500,000
0
0
0
2,750,000
9,750,000

0
3,000,000
0
0
0
4,000,000
0
0
0
4,500,000
0
0
0
4,750,000
16,250,000

0
5,000,000
0
0
0
6,000,000
0
0
0
7,000,000
0
0
0
8,000,000
26,000,000

Other Current Liabilites


% of Revenue
Days
Other Current Liabilities
Increase/(Decrease) from Prev. Period

Revenues by Months & Quarters

Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9
Total 3rd Quarter
Month 10
Month 11
Month 12
Total 4th Quarter
Total for year

Accounts Receivable by Months & Quarters


($)

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

Year 1

Year 2

49,800
79,680
99,600
99,600
119,520
149,400
119,520
129,480
149,400

261,450
261,450
366,030
313,740
366,030
366,030
418,320
522,900
522,900
575,190
627,480
627,480

Year 1

($)
Year 2

49,800
79,680
99,600
99,600
119,520
149,400
119,520
129,480
149,400

261,450
261,450
366,030
313,740
366,030
366,030
418,320
522,900
522,900
575,190
627,480
627,480

4/15/2014
Year 5
7:00 AM

Year 3

Year 4

664,000

996,000

1,660,000

830,000

1,328,000

1,992,000

830,000

1,494,000

2,324,000

913,000

1,577,000

2,656,000

Year 3

Year 4

Year 5

536,000

804,000

1,340,000

670,000

1,072,000

1,608,000

670,000

1,206,000

1,876,000

737,000

1,273,000

2,144,000

Year 3

Year 4

Year 5

80,000

120,000

200,000

100,000

160,000

240,000

100,000

180,000

280,000

110,000

190,000

320,000

Inventory by Months & Quarters

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

Other Current Assets by Months & Quarters

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

Year 1

($)
Year 2

6,000
9,600
12,000
12,000
14,400
18,000
14,400
15,600
18,000

31,500
31,500
44,100
37,800
44,100
44,100
50,400
63,000
63,000
69,300
75,600
75,600

Accounts Payble & Accrued Expenses by Months & Quarters


($)
Year 1
Year 2
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

0
31
50,000
82,200
103,520
104,400
124,400
155,280
126,600
135,280
155,720

6,600
0
31
331,170
381,360
383,670
436,170
543,480
548,100
600,600
655,410
657,720

4/15/2014
7:00 AM

Year 3

Year 4

Year 5

696,000

1,044,000

1,740,000

870,000

1,392,000

2,088,000

870,000

1,566,000

2,436,000

957,000

1,653,000

2,784,000

Year 3

Year 4

Year 5

80,000

120,000

200,000

100,000

160,000

240,000

100,000

180,000

280,000

110,000

190,000

320,000

Other Current Liabilities by Months & Quarters

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

Year 1

($)
Year 2

6,000
9,600
12,000
12,000
14,400
18,000
14,400
15,600
18,000

31,500
31,500
44,100
37,800
44,100
44,100
50,400
63,000
63,000
69,300
75,600
75,600

4/15/2014
7:00 AM

XYZ Company
Funding Projections
Years 1 to 5
($)
Begin
Beginning Cash
Equity
Common
Increase / (Decrease) Previous Period
Preferred
A Round
B Round
Total Preferred
Increase / (Decrease) Previous Period
Total Equity

Interest Income
Interest Rate
Interest Income
Retained Earnings
Net Income
Dividends
Increase / (Decrease) Retained Earnings
Beginning Retained Earnings
Ending Retained Earnings

Year 4

Year 5

500,000
0

500,000
0

500,000
0

500,000
0

1,000,000

1,000,000

1,000,000

1,000,000
0
1,500,000

1,000,000
500,000
1,500,000
500,000
2,000,000

1,000,000
500,000
1,500,000
0
2,000,000

1,000,000
500,000
1,500,000
0
2,000,000

1,000,000
500,000
1,500,000
0
2,000,000

100,000
100,000

(100,000)

100,000
400,000
500,000

100,000
300,000
400,000

100,000
200,000
300,000

100,000
100,000
200,000

0
0
0

100,000
400,000
500,000

0
(100,000)
(100,000)

0
(100,000)
(100,000)

0
(100,000)
(100,000)

1,500,000

2,500,000

1,500,000

Increase / (Decrease) Previous Period


Current Portion
Long Term Protion
Total Long Term Debt

Interest Expense
Short Term Debt
Long Term Debt
Total Interest

Year 3

500,000
0

Long Term Debt


Current Portion
Long Term Portion
Total Long Term Debt

Interest
Interest Rate
Short Term Debt
Long Term Debt

Year 2

500,000

Debt
Short Term Debt
Increase / (Decrease) Previous Period

Total Equity & Debt

Year 1

1,500,000

1,500,000

9.0%
12.0%

0
0
0

9.0%
12.0%

0
60,000
60,000

2,400,000

9.0%
12.0%

0
48,000
48,000

4.0%
0

2,400,000

9.0%
12.0%

9,000
36,000
45,000

4.0%
0

4.0%
0

4.0%
0

(712,131)

(218,064)

704,515

1,002,741

(712,131)
0
(712,131)

(218,064)
(712,131)
(930,195)

704,515
(930,195)
(225,681)

1,002,741
(225,681)
777,060

2,200,000

9.0%
12.0%

0
24,000
24,000

4.0%
10,000

2,252,034
50,000
2,202,034
777,060
2,979,094

4/15/2014
7:00 AM

XYZ Company
Income Statement
Years 1 to 5
($)
Year 1

Year 2

Year 3

Year 4

NET REVENUES

1,000,000

5,250,000

9,750,000

COST OF REVENUE
% of Revenues

1,117,464
111.7%

3,532,164
67.3%

5,699,429
58.5%

9,339,286
57.5%

14,033,143
54.0%

GROSS PROFIT
% of Revenues

(117,464)
-11.7%

1,717,836
32.7%

4,050,571
41.5%

6,910,714
42.5%

11,966,857
46.0%

229,000
149,000
171,667
549,667
55%

997,750
413,000
465,150
1,875,900
36%

1,805,400
702,550
790,107
3,298,057
34%

2,911,500
1,241,500
1,191,933
5,344,933
33%

4,676,000
1,752,000
1,771,467
8,199,467
32%

(667,131)

(158,064)

752,515

1,565,781

3,767,390

(158,064)

752,515

1,565,781

3,767,390

(60,000)

(48,000)

(218,064)

704,515

OPERATING EXPENSES
Sales & Marketing
Research & Development
General and Administration
Total Operating Expenses
% of Revenues
EARNINGS FROM OPERATIONS
EXTRAORDINARY INCOME / (EXPENSE)

(45,000)

EARNINGS BEFORE INTEREST & TAXES

(712,131)

INTEREST INCOME / (EXPENSE)


NET EARNINGS BEFORE TAXES
TAXES
NET EARNINGS
% of Revenues

0
(712,131)
0
(712,131)
-71.2%

0
(218,064)
-4.2%

0
704,515
7.2%

16,250,000

Year 5

(45,000)
1,520,781

26,000,000

(14,000)
3,753,390

(518,040)

(1,501,356)

1,002,741
6.2%

2,252,034
8.7%

4/15/2014
7:00 AM

XYZ Company
Balance Sheet
Years 1 to 5
($)
Begin
ASSETS
CURRENT ASSETS
Cash
Accounts Receivable
Inventories
Other Current Assets
Total Current Assets
PROPERTY & EQUIPMENT
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Debt
Accounts Payable & Accrued Expen
Other Current Liab
Current portion of long term debt
Total Current Liabilities
LONG TERM DEBT (less current portion)
STOCKHOLDERS' EQUITY
CommonStock
Preferred Stock
Retained Earnings
Total Equity
TOTAL LIABILITIES & EQUITY

1,500,000

Year 1

Year 2

Year 3

Year 4

Year 5

408,170
149,400
149,400
18,000
724,970
236,619
961,589

367,660
627,480
627,480
75,600
1,698,220
604,905
2,303,125

570,510
913,000
737,000
110,000
2,330,510
910,810
3,241,319

792,870
1,577,000
1,273,000
190,000
3,832,870
1,187,190
5,020,060

1,735,714
2,656,000
2,144,000
320,000
6,855,714
1,427,381
8,283,094

0
0

0
155,720
18,000
0
173,720

0
657,720
75,600
100,000
833,320

0
957,000
110,000
100,000
1,167,000

100,000
1,653,000
190,000
100,000
2,043,000

0
2,784,000
320,000
100,000
3,204,000

400,000

300,000

200,000

100,000

500,000
1,500,000
(930,195)
1,069,805
2,303,125

500,000
1,500,000
(225,681)
1,774,319
3,241,319

500,000
1,500,000
777,060
2,777,060
5,020,060

500,000
1,500,000
2,979,094
4,979,094
8,283,094

1,500,000
0
1,500,000

500,000
1,000,000
1,500,000
1,500,000

500,000
1,000,000
(712,131)
787,869
961,589

4/15/2014
7:00 AM

XYZ Company
Cash Flow Statememt
Years 1 to 5
($)
OPERATING ACTIVITIES
Net Earnings
Depreciation
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(Increase)/Decrease Inventories
(Increase)/Decrease Other Current Assets
Increase/(Decrease) Accts Pay & Accrd Expenses
Increase/(Decrease) Other Current Liab
Net Cash Provided/(Used) by Operating Activities
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing

Year 2

Year 3

(712,131)
43,381

(218,064)
131,714

704,515
244,095

(149,400)
(149,400)
(18,000)
155,720
18,000
(811,830)

(478,080)
(478,080)
(57,600)
502,000
57,600
(540,510)

(285,520)
(109,520)
(34,400)
299,280
34,400
852,850

(664,000)
(536,000)
(80,000)
696,000
80,000
872,360

(1,079,000)
(871,000)
(130,000)
1,131,000
130,000
1,942,844

(280,000)

(500,000)

(550,000)

(650,000)

(750,000)

(280,000)

(500,000)

(550,000)

(650,000)

(750,000)

0
0
(100,000)
0
0
0
(100,000)

100,000
0
(100,000)
0
0
0
0

(100,000)
0
(100,000)
0
0
(50,000)
(250,000)

0
0
0
0
0
0
0

INCREASE/(DECREASE) IN CASH
CASH AT BEGINNING OF YEAR
CASH AT END OF YEAR

Year 1

1,500,000

0
100,000
400,000
0
500,000
0
1,000,000

Year 4
1,002,741
373,619

Year 5
2,252,034
509,810

(1,091,830)

(40,510)

202,850

222,360

942,844

1,500,000
408,170

408,170
367,660

367,660
570,510

570,510
792,870

792,870
1,735,714

4/15/2014
7:00 AM

XYZ Company
Break-Even Analysis
Years 1 to 5
($)
Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

1,000,000

5,250,000

9,750,000

16,250,000

26,000,000

Cost of Revenue
Variable
Fixed
Total

729,750
387,714
1,117,464

2,450,450
1,081,714
3,532,164

4,122,000
1,577,429
5,699,429

7,139,000
2,200,286
9,339,286

10,990,000
3,043,143
14,033,143

160,000
389,667
549,667

840,000
1,035,900
1,875,900

1,560,000
1,738,057
3,298,057

2,600,000
2,744,933
5,344,933

4,160,000
4,039,467
8,199,467

889,750
777,381
1,667,131

3,290,450
2,117,614
5,408,064

5,682,000
3,315,485
8,997,485

9,739,000
4,945,219
14,684,219

15,150,000
7,082,610
22,232,610

0.89

0.63

0.58

0.60

0.58

7,051,076

5,673,484

7,946,406

12,342,161

16,972,152

Operating Expenses
Variable
Fixed
Total
Total Costs & Expenses
Variable
Fixed
Total
Variable Costs/Revenue Ratio
Break-Even Point Revenues

4/15/2014
7:00 AM

XYZ Company
Income Statement
Year 1 by Months
Month 1

Month 7

Month 8

Month 9

Month 10

NET REVENUES

50,000

80,000

100,000

100,000

120,000

150,000

120,000

130,000

150,000

1,000,000

1,000,000

COST OF REVENUE

55,873

89,397

111,746

111,746

134,096

167,620

134,096

145,270

167,620

1,117,464

1,117,464

GROSS PROFIT

(5,873)

(9,397)

(11,746)

(11,746)

(14,096)

(17,620)

(14,096)

(15,270)

(17,620)

(117,464)

(117,464)

OPERATING EXPENSES
Sales & Marketing
Research & Development
General and Administration
Total Operating Expenses

0
0
0
0

0
0
0
0

0
0
0
0

11,450
7,450
8,583
27,483

18,320
11,920
13,733
43,973

22,900
14,900
17,167
54,967

22,900
14,900
17,167
54,967

27,480
17,880
20,600
65,960

34,350
22,350
25,750
82,450

27,480
17,880
20,600
65,960

29,770
19,370
22,317
71,457

34,350
22,350
25,750
82,450

229,000
149,000
171,667
549,667

229,000
149,000
171,667
549,667

(33,357)

(53,370)

(66,713)

(66,713)

(80,056)

(100,070)

(80,056)

(86,727)

(100,070)

(667,131)

(667,131)

EARNINGS FROM OPERATIONS

Month 2

Month 3

EXTRAORDINARY INCOME / (EXPENSE)

(25,000)

(20,000)

EARNINGS BEFORE INTEREST & TAXES

(25,000)

(20,000)

INTEREST INCOME / (EXPENSE)


NET EARNINGS BEFORE TAXES
TAXES
NET EARNINGS

0
(25,000)
0
(25,000)

0
(20,000)
0
(20,000)

0
0
0
0

Month 4

0
(33,357)
0
(33,357)
0
(33,357)

Month 5

0
(53,370)
0
(53,370)
0
(53,370)

Month 6

Year 1
Total
Annual
Month 11 Month 12 12 Months Projection

0
(66,713)
0
(66,713)
0
(66,713)

0
(66,713)
0
(66,713)
0
(66,713)

0
(80,056)
0
(80,056)
0
(80,056)

0
(100,070)
0
(100,070)
0
(100,070)

0
(80,056)
0
(80,056)
0
(80,056)

0
(86,727)
0
(86,727)
0
(86,727)

0
(100,070)
0
(100,070)
0
(100,070)

(45,000)

(45,000)

(712,131)

(712,131)

0
(712,131)
0
(712,131)

0
(712,131)
0
(712,131)

XYZ Company
Income Statement
Year 2 by Months
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Year 2
Total
Annual
Month 11 Month 12 12 Months Projection

NET REVENUES

262,500

262,500

367,500

315,000

367,500

367,500

420,000

525,000

525,000

577,500

630,000

630,000

5,250,000

5,250,000

COST OF REVENUE

176,608

176,608

247,252

211,930

247,252

247,252

282,573

353,216

353,216

388,538

423,860

423,860

3,532,164

3,532,164

GROSS PROFIT

85,892

85,892

120,249

103,070

120,249

120,249

137,427

171,784

171,784

188,962

206,140

206,140

1,717,836

1,717,836

OPERATING EXPENSES
Sales & Marketing
Research & Development
General and Administration
Total Operating Expenses

49,888
20,650
23,258
93,795

49,888
20,650
23,258
93,795

69,843
28,910
32,561
131,313

59,865
24,780
27,909
112,554

69,843
28,910
32,561
131,313

69,843
28,910
32,561
131,313

79,820
33,040
37,212
150,072

99,775
41,300
46,515
187,590

99,775
41,300
46,515
187,590

109,753
45,430
51,167
206,349

119,730
49,560
55,818
225,108

119,730
49,560
55,818
225,108

997,750
413,000
465,150
1,875,900

997,750
413,000
465,150
1,875,900

EARNINGS FROM OPERATIONS

(7,903)

(7,903)

(11,065)

(11,065)

(11,065)

(12,645)

(15,806)

(15,806)

(17,387)

(18,968)

(18,968)

EXTRAORDINARY INCOME / (EXPENSE)


EARNINGS BEFORE INTEREST & TAXES

0
(7,903)

0
(7,903)

0
(11,065)

(9,484)
0
(9,484)

0
(11,065)

0
(11,065)

0
(12,645)

0
(15,806)

0
(15,806)

0
(17,387)

0
(18,968)

0
(18,968)

(158,064)
0
(158,064)

(158,064)
0
(158,064)

INTEREST INCOME / (EXPENSE)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(5,000)

(60,000)

(60,000)

NET EARNINGS BEFORE TAXES

(12,903)

(12,903)

(16,065)

(14,484)

(16,065)

(16,065)

(17,645)

(20,806)

(20,806)

(22,387)

(23,968)

(23,968)

(218,064)

(218,064)

TAXES
NET EARNINGS

0
(12,903)

0
(12,903)

0
(16,065)

0
(14,484)

0
(16,065)

0
(16,065)

0
(17,645)

0
(20,806)

0
(20,806)

0
(22,387)

0
(23,968)

0
(23,968)

0
(218,064)

0
(218,064)

4/15/2014
7:00 AM

XYZ Company
Income Statement
Years 3, 4 & 5 by Quarters
Year 3

Year 4

1st Qtr

2nd Qrtr

3rd Qrtr

4th Qrtr

Total

1st Qtr

2nd Qtr

NET REVENUES

2,000,000

2,500,000

2,500,000

2,750,000

COST OF REVENUE

1,169,114

1,461,392

1,461,392

GROSS PROFIT

830,886

1,038,608

OPERATING EXPENSES
Sales & Marketing
Research & Development
General and Administration
Total Operating Expenses

370,338
144,113
162,073
676,524

EARNINGS FROM OPERATIONS

3rd Qtr

9,750,000

3,000,000

4,000,000

4,500,000

1,607,531

5,699,429

1,724,176

2,298,901

1,038,608

1,142,469

4,050,571

1,275,824

462,923
180,141
202,591
845,656

462,923
180,141
202,591
845,656

509,215
198,155
222,851
930,221

1,805,400
702,550
790,107
3,298,057

Year 3
Annual
Projection

Year 5
4th Qtr

Year 4
Annual
Projection

Year 5
Annual
Projection

Total

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

4,750,000

16,250,000

5,000,000

6,000,000

7,000,000

8,000,000

26,000,000

Total

2,586,264

2,729,945

9,339,286

2,698,681

3,238,418

3,778,154

4,317,890

14,033,143

9,750,000
0
5,699,429

16,250,000
0
9,339,286

26,000,000
0
14,033,143

1,701,099

1,913,736

2,020,055

6,910,714

2,301,319

2,761,582

3,221,846

3,682,110

11,966,857

4,050,571

6,910,714

11,966,857

537,508
229,200
220,049
986,757

716,677
305,600
293,399
1,315,676

806,262
343,800
330,074
1,480,135

851,054
362,900
348,411
1,562,365

2,911,500
1,241,500
1,191,933
5,344,933

899,231
336,923
340,667
1,576,821

1,079,077
404,308
408,800
1,892,185

1,258,923
471,692
476,933
2,207,549

1,438,769
539,077
545,067
2,522,913

4,676,000
1,752,000
1,771,467
8,199,467

1,805,400
702,550
790,107
3,298,057

2,911,500
1,241,500
1,191,933
5,344,933

4,676,000
1,752,000
1,771,467
8,199,467
3,767,390

154,362

192,953

192,953

212,248

752,515

289,067

385,423

433,601

457,690

1,565,781

724,498

869,398

1,014,297

1,159,197

3,767,390

752,515

1,565,781

EXTRAORDINARY INCOME / (EXPENSE)

EARNINGS BEFORE INTEREST & TAXES

154,362

192,953

192,953

212,248

752,515

289,067

385,423

433,601

457,690

1,565,781

724,498

869,398

1,014,297

1,159,197

3,767,390

752,515

1,565,781

3,767,390

INTEREST INCOME / (EXPENSE)

(12,000)

(12,000)

(12,000)

(12,000)

(48,000)

(11,250)

(11,250)

(11,250)

(11,250)

NET EARNINGS BEFORE TAXES

142,362

180,953

180,953

200,248

704,515

277,817

374,173

422,351

446,440

(94,636)

(127,459)

(143,870)

(152,076)

183,181

246,714

278,481

294,364

TAXES
NET EARNINGS

142,362

180,953

180,953

200,248

704,515

(45,000)
1,520,781
(518,040)
1,002,741

(3,500)

(3,500)

(3,500)
1,010,797

(3,500)
1,155,697

(14,000)

720,998

865,898

3,753,390

(288,399)

(346,359)

(404,319)

(462,279)

(1,501,356)

432,599

519,539

606,478

693,418

2,252,034

(48,000)
704,515
0
704,515

(45,000)
1,520,781
(518,040)
1,002,741

(14,000)
3,753,390
(1,501,356)
2,252,034

4/15/2014
7:00 AM

XYZ Company
Cash Flow Statement
Year 1 by Months
Month 1
OPERATING ACTIVITIES
Net Earnings
Depreciation
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(Increase)/Decrease Inventories
(Increase)/Decrease Other Current Assets
Increase/(Decrease) Accts Pay & Accrd Expenses
Increase/(Decrease) Other Current Liab
Net Cash Provided/(Used) by Operating Activities
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

(25,000)
3,615

(20,000)
3,615

0
3,615

(33,357)
3,615

(53,370)
3,615

(66,713)
3,615

(66,713)
3,615

(80,056)
3,615

(100,070)
3,615

(80,056)
3,615

(86,727)
3,615

(100,070)
3,615

(712,131)
43,381

(712,131)
43,381

0
0
0
0
0
(21,385)

0
0
0
0
0
(16,385)

0
0
0
31
0
3,646

(49,800)
(49,800)
(6,000)
49,969
6,000
(79,373)

(29,880)
(29,880)
(3,600)
32,200
3,600
(77,315)

(19,920)
(19,920)
(2,400)
21,320
2,400
(81,618)

0
0
0
880
0
(62,218)

(19,920)
(19,920)
(2,400)
20,000
2,400
(96,281)

(29,880)
(29,880)
(3,600)
30,880
3,600
(125,335)

29,880
29,880
3,600
(28,680)
(3,600)
(45,361)

(9,960)
(9,960)
(1,200)
8,680
1,200
(94,352)

(19,920)
(19,920)
(2,400)
20,440
2,400
(115,855)

(149,400)
(149,400)
(18,000)
155,720
18,000
(811,830)

(149,400)
(149,400)
(18,000)
155,720
18,000
(811,830)

(50,000)

(100,000)

(50,000)

(40,000)

(40,000)

(50,000)

(100,000)

(50,000)

(40,000)

(40,000)

(280,000)
0
(280,000)

(280,000)
0
(280,000)

0
0
0
0
0
0
0

FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing

0
0
0
0
0
0

INCREASE/(DECREASE) IN CASH

(71,385)

CASH AT BEGINNING OF PERIOD


CASH AT END OF PERIOD

Estimated
Year 1

Month 12

Year 1
Annual
Projection

1,500,000
1,428,615

0
(116,385)
1,428,615
1,312,230

0
(46,354)
1,312,230
1,265,877

0
(119,373)
1,265,877
1,146,504

0
(77,315)
1,146,504
1,069,188

0
(81,618)
1,069,188
987,570

(102,218)

(96,281)

(125,335)

(45,361)

(94,352)

(115,855)

987,570
885,352

885,352
789,072

789,072
663,737

663,737
618,376

618,376
524,024

524,024
408,170

0
0
0
0
0
0
0
(1,091,830)

0
0
0
0
0
0
0
(1,091,830)
1,500,000
408,170

XYZ Company
Cash Flow Statement
Year 2 by Months
Month 1
OPERATING ACTIVITIES
Net Earnings
Depreciation
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(Increase)/Decrease Inventories
(Increase)/Decrease Other Current Assets
Increase/(Decrease) Accts Pay & Accrd Expenses
Increase/(Decrease) Other Current Liab
Net Cash Provided/(Used) by Operating Activities
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Estimated
Year 2

Month 12

(12,903)
10,976

(12,903)
10,976

(16,065)
10,976

(14,484)
10,976

(16,065)
10,976

(16,065)
10,976

(17,645)
10,976

(20,806)
10,976

(20,806)
10,976

(22,387)
10,976

(23,968)
10,976

(23,968)
10,976

(218,064)
131,714

(112,050)
(112,050)
(13,500)
(149,120)
13,500
(375,147)

0
0
0
(6,600)
0
(8,527)

(104,580)
(104,580)
(12,600)
31
12,600
(214,217)

52,290
52,290
6,300
331,139
(6,300)
432,211

(52,290)
(52,290)
(6,300)
50,190
6,300
(59,478)

0
0
0
2,310
0
(2,778)

(52,290)
(52,290)
(6,300)
52,500
6,300
(58,749)

(104,580)
(104,580)
(12,600)
107,310
12,600
(111,680)

0
0
0
4,620
0
(5,210)

(52,290)
(52,290)
(6,300)
52,500
6,300
(63,491)

(52,290)
(52,290)
(6,300)
54,810
6,300
(62,762)

0
0
0
2,310
0
(10,682)

(478,080)
(478,080)
(57,600)
502,000
57,600
(540,510)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(100,000)

(500,000)
0
(500,000)

0
100,000
400,000
0
500,000
1,000,000

INCREASE/(DECREASE) IN CASH

524,853

(108,527)

(214,217)

CASH AT BEGINNING OF PERIOD


CASH AT END OF PERIOD

408,170
933,023

933,023
824,496

824,496
610,279

0
432,211
610,279
1,042,490

0
(59,478)
1,042,490
983,012

0
0
0
0
0
0
0

(102,778)

(58,749)

(111,680)

(105,210)

(63,491)

(62,762)

(110,682)

983,012
880,233

880,233
821,484

821,484
709,804

709,804
604,594

604,594
541,103

541,103
478,341

478,341
367,660

0
100,000
400,000
0
500,000
0
1,000,000
(40,510)

Year 2
Annual
Projection
(218,064)
131,714
0
(478,080)
(478,080)
(57,600)
502,000
57,600
(540,510)
0
0
(500,000)
0
(500,000)
0
0
0
100,000
400,000
0
500,000
0
1,000,000
0
(40,510)
408,170
367,660

4/15/2014
7:00 AM

XYZ Company
Cash Flow Statement
Years 3, 4 & 5 by Quarters
Year 3
1st Qtr
OPERATING ACTIVITIES
Net Earnings
142,362
Depreciation
61,024
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(36,520)
(Increase)/Decrease Inventories
91,480
(Increase)/Decrease Other Current Assets
(4,400)
Increase/(Decrease) Accts Pay & Accrd Expenses
38,280
Increase/(Decrease) Other Current Liab
4,400
Net Cash Provided/(Used) by Operating Activities 296,626
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing

2nd Qrtr

Year 4

3rd Qrtr

180,953
61,024

4th Qrtr

180,953
61,024

200,248
61,024

(166,000)

(83,000)

(134,000)
(20,000)
174,000
20,000
115,976

0
0
0
0
241,976

(67,000)
(10,000)
87,000
10,000
198,272

(100,000)

(200,000)

(100,000)

(150,000)

(100,000)

(200,000)

(100,000)

(150,000)

Total
704,515
244,095

(332,000)

(166,000)

(83,000)

(268,000)
(40,000)
348,000
40,000
88,119

(134,000)
(20,000)
174,000
20,000
245,886

(67,000)
(10,000)
87,000
10,000
324,769

(550,000)
0
(550,000)

(200,000)

(200,000)

(100,000)

(150,000)

(200,000)

(200,000)

(100,000)

(150,000)

100,000
0
0
0
0

(100,000)

100,000
0
(100,000)
0
0
0
0

113,586

(111,881)

145,886

74,769

222,360

570,510
684,096

684,096
572,215

572,215
718,101

718,101
792,870

(100,000)

(84,024)

141,976

(51,728)

202,850

CASH AT BEGINNING OF PERIOD


CASH AT END OF PERIOD

367,660
564,286

564,286
480,262

480,262
622,238

622,238
570,510

100,000

294,364
93,405

Total

(67,000)
(10,000)
87,000
10,000
213,586

196,626

Year 5
4th Qtr

(83,000)

INCREASE/(DECREASE) IN CASH

0
0
(100,000)
0
0
0

3rd Qtr
278,481
93,405

(285,520)
(109,520)
(34,400)
299,280
34,400
852,850

183,181
93,405

2nd Qtr
246,714
93,405

0
0
(100,000)
0
0
0
(100,000)

0
0
0
0
0

1st Qtr

0
0
(100,000)
0
0
0
0

Year 3
Annual
Projection

1,002,741
373,619
(664,000)
(536,000)
(80,000)
696,000
80,000
872,360

(650,000)
0
(650,000)

1st Qtr

2nd Qtr

432,599
127,452

3rd Qtr

4th Qtr

Year 4
Annual
Projection

Year 5
Annual
Projection

Total

519,539
127,452

606,478
127,452

693,418
127,452

2,252,034
509,810

704,515
244,095

(83,000)

(332,000)

(332,000)

(332,000)

(67,000)
(10,000)
87,000
10,000
497,051

(268,000)
(40,000)
348,000
40,000
394,991

(268,000)
(40,000)
348,000
40,000
481,931

(268,000)
(40,000)
348,000
40,000
568,871

(1,079,000)
(871,000)
(130,000)
1,131,000
130,000
1,942,844

(285,520)
(109,520)
(34,400)
299,280
34,400
852,850

(664,000)
(536,000)
(80,000)
696,000
80,000
872,360

(1,079,000)
(871,000)
(130,000)
1,131,000
130,000
1,942,844

(200,000)

(200,000)

(200,000)

(150,000)

(750,000)

(200,000)

(200,000)

(200,000)

(150,000)

(750,000)

(550,000)
0
(550,000)

(650,000)
0
(650,000)

(750,000)
0
(750,000)

(100,000)
0
(100,000)
0
0
(50,000)

0
0
(100,000)
0
0
0
(100,000)

100,000
0
(100,000)
0
0
0
0

(100,000)
0
(100,000)
0
0
(50,000)
(250,000)

202,850

222,360

942,844

367,660
570,510

570,510
792,870

792,870
1,735,714

(250,000)

(100,000)
0
(100,000)
0
0
(50,000)
(250,000)

297,051

194,991

281,931

168,871

942,844

792,870
1,089,921

1,089,921
1,284,912

1,284,912
1,566,843

1,566,843
1,735,714

0
0
0
0
0

1,002,741
373,619

2,252,034
509,810

4/15/2014
7:00 AM

XYZ Company
Summary
Years 1 to 5
Year 1

Year 2

Year 3

Year 4

Year 5

1,000,000
(117,464)
(712,131)
(668,750)
(712,131)
(811,830)
280,000
0
0
408,170
(212,131)
0

5,250,000
1,717,836
(158,064)
(26,350)
(218,064)
(540,510)
500,000
(60,000)
0
367,660
(430,195)
500,000

9,750,000
4,050,571
752,515
996,610
704,515
852,850
550,000
(48,000)
0
570,510
274,319
400,000

16,250,000
6,910,714
1,565,781
1,939,400
1,002,741
872,360
650,000
(45,000)
0
792,870
1,277,060
300,000

26,000,000
11,966,857
3,767,390
4,277,200
2,252,034
1,942,844
750,000
(14,000)
50,000
1,735,714
3,479,094
200,000

425%
Nil

86%
Nil

67%
42.3%

60%
124.6%

4.2
0.0

2.0
0.3

2.0
0.2

1.9
0.1

2.1
0.0

Profitability
Gross Profit %
Operating Expenses %
Net Earnings %

-11.7%
55.0%
-71.2%

32.7%
35.7%
-4.2%

41.5%
33.8%
7.2%

42.5%
32.9%
6.2%

46.0%
31.5%
8.7%

Returns
Return on Assets
Return on Equity
Return on Capital (LT Debt + Equity)

-74.1%
-90.4%
-90.4%

-9.5%
-20.4%
-13.9%

21.7%
39.7%
32.4%

20.0%
36.1%
32.6%

27.2%
45.2%
43.5%

Summary Financials ($)


Revenue
Gross Profit
EBIT
EBITDA
Net Earnings
Net Cash from Operating Activities
Capital Expenditures
Interest Income/(Expense)
Dividends
Cash
Total Equity
Total Debt
Growth
Revenue Growth Rate - CAGR:
Net Earnings Growth Rate - CAGR:
Ratios
Current Ratio
Debt to Capital (LT Debt + Equity)

4/15/2014
7:00 AM

XYZ Company

Notes

Valuation
Venture Capital Method
Years 1 to 5
Assumptions:
Investor required IRR
P/E ratio at IPO or acquisition
Initial investment
REF
Valuation Calculation
Calculation
Liquidity Event in Year 1
Liquidity Event in Year 2
Liquidity Event in Year 3
Liquidity Event in Year 4
Liquidity Event in Year 5

60%
15
$1,500,000

REF
A
B
C

Year

Net Income
Income Stmt
(712,131)
(218,064)
704,515
1,002,741
2,252,034

1
2
3
4
5

FV(A,C)
F
Market
Capitalization
B*E
($10,681,967)
($3,270,964)
$10,567,721
$15,041,112
$33,780,514

G
Required Future
Value (Investor)
FV(F,D)
$2,400,000
$3,840,000
$6,144,000
$9,830,400
$15,728,640

Year
1
2
3
4
5

G/F
H
Investor's
Share
C/G
100.0%
100.0%
58.1%
65.4%
46.6%

IRR(D,G)
I
Investor's
Return
F*H
$0
$0
$6,144,000
$9,830,400
$15,728,640

J
Investor's
ROI
I/C
0%
0%
410%
655%
1049%

K
Investor's
IRR
IRR(I,C,D)
#N/A
#N/A
60%
60%
60%

Negotiation Workspace
Investor's
Investor's
Share
Return
25.0%
$0
25.0%
$0
25.0%
$2,641,930
25.0%
$3,760,278
40.0%
$13,512,206

Investor's
ROI
0%
0%
176%
251%
901%

Investor's
IRR
#N/A
#N/A
21%
26%
55%

IRR Calculation Workspace


Start
Year 1
($1,500,000)
$0
($1,500,000)
$0
($1,500,000)
$0
($1,500,000)
$0
($1,500,000)
$0

($1,500,000)
($1,500,000)
($1,500,000)
($1,500,000)
($1,500,000)

$0
$0
$0
$0
$0

Year 2

Year 3

Year 4

Year 5

$0
$0
$0
$0

$6,144,000
$0
$0

$9,830,400
$0

$15,728,640

$0
$0
$0
$0

$2,641,930
$0
$0

$3,760,278
$0

$13,512,206

4/15/2014
7:00 AM

XYZ Company
Valuation
Venture Capital Method
Years 1 to 5
Multiple Rounds
Assumptions
Month of IPO
Forecast annualized earnings at IPO
P/E ratio at IPO

60
$2,252,034
15

Investment Round
Month of Investment
Investor required IRR
Amount of Investment
Required Monthly IRR
Duration of Investment

First
0
60%
$1,500,000
5.00%
60

Calculations
Market Capitalization at IPO

$33,780,514

Ref
A
B
C
Second
24
50%
$500,000
4.17%
36

Calculation

Third

0.00%
60

C
D
E
F
G

D/12
A-C

B*C

Required FV for Investor at IPO


Individual Investor's Share
Individual Investor's ROI
Individual Investor's IRR

First
$15,728,640
46.6%
1049%
60%

Second
$1,687,500
5.0%
338%
50%

Third
$0
0.0%
#DIV/0!
#DIV/0!

I
J
K
L

E*(1+F)^G
I/H
I/E
(I/E)^(12/G)-1

Cumulative Investors' Share


Cumulative Founders' Share

46.6%
53.4%

51.6%
48.4%

51.6%
48.4%

M
N

sum(J)
1-M

First
15.0%
$5,067,077
338%
28%

Second
5.0%
$1,689,026
338%
50%

Third
3.0%
$1,013,415
#DIV/0!
#DIV/0!

Negotiations Round
Individual Investor's Share
FV for Investor at IPO
Individual Investor's ROI
Individual Investor's IRR