You are on page 1of 28

Okyna Rempah Bali Agro

Br. Kayuambua, Bangli, Bali - Indonesia


Phone: +62 878 6204 4578
E-Mail: wayan@baliokinastone.com Web: www.kopiluwakbaliagro.com

Executive Summary
Okyna Rempah Bali Agro prepares Luwak coffee beans grown in Kayuambua
Bangli for exportation and also sells to domestic market. We will expand
production capacity from 139,000/60kg bags per year to 120-160,000/60kg
per year. Our coffee stands out from that of the competition. We prepare the
top five percent, in terms of quality standards, of all Luwak coffee beans on
the market. Our customers seek this product as it provides them with a point
of differentiation to specialty roasters. In the past six years, demand for our
coffee has exceeded the amount we are able to supply and we have been
forced to refuse requests for larger shipments.
We predict growth of thirty percent in the first year with sales exceeding (US
$) expectations. In year three the plant will run at maximum capacity and
based on the current price of coffee we expect excellent profits (US $). We
have positive indicators from current importers that the additional amount of
beans will be sold.
Our keys to success are:
1. Establishing and maintaining working relationships and contractual
agreements with all importers and Indonesian coffee brokers and wholesalers.
2. Bringing the facility to maximum production within three years of operation.
3. Increasing our profit margin with the use of improved technology in the
current facility.
4. Effectively communicating to current and potential customers, through
targeted efforts, our position as a differentiated provider of the highest
quality Luwak coffee in the world.

1.1 Objectives
The objectives of Okyna Rempah Bali Agro:

Increase production and sale from 78,000/60kg bags per year to


approximately 100,000/60kg bags per year in the first year of operation at
the proposed facility and reach maximum capacity of 120,000/60kg bags per
year by year three.
Increase sales substantially in the first full year of operation.
Increase gross margins in the next three years.

1.2 Mission
Okyna Rempah Bali Agro seeks to serve coffee importers and enthusiasts by
exceeding minimum acceptable quality standards and by providing the
highest quality product at the lowest possible price. We value our

relationships with current and future customers and hope to communicate our
appreciation to them through our outstanding, guaranteed product quality,
personal service, and efficient delivery. Our commitment to our customers
and the country of Indonesia will be reflected through honest and responsible
business.

1.3 Keys to Success


The keys to success for Okyna Rempah Bali Agro are:

Establishing and maintaining working relationships and contractual


agreements with importers and Indonesian coffee brokers and wholesalers.
Bringing the new facility to maximum production within three years of
operation.
Increasing our profit margin with the use of improved technology in the new
facility.
Effectively communicating, to current and potential customers, our position as
a differentiated provider of the highest quality Luwak coffee in the world.

Company Summary
Okyna Rempah Bali Agro prepares raw coffee in parchment (pergamino), or
coffee since planting stage. The finished product, Luwak coffee beans are
packaged in 60kg sacks and sold on international and Indonesian market. Our
customers are importers and Indonesian wholesalers who provide high-quality
beans to the specialty roasting market.

2.1 Company Ownership


Okyna Rempah Bali Agro is a private, family owned preparer and exporter of
Bali-grown, Luwak coffee beans. It is owned and operated by Wayan Widana.

2.2 Company History


Okyna Rempah Bali Agro is in its seventh year of operation. The plant has
been arranged and maintained for maximum production and sales. It is
currently operating at maximum capacity.

Past Performance
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000

Sales

$10,000,000

Gross
Net

$8,000,000
$6,000,000
$4,000,000
$2,000,000
$2011

2012

2013

2011

2012

2013

$16,262,532

$17,304,066

$18,345,600

$2,439,380

$2,630,218

$2,814,215

15.00%

15.20%

15.34%

Operating Expenses

$12,196,899

$12,631,968

$13,346,424

Inventory Turnover

12.00

12.00

12.00

2011

2012

2013

Cash

$0

$0

$994,260

Inventory

$0

$0

$355,200

Other Current Assets

$0

$0

$243,936

Total Current Assets

$0

$0

$1,593,396

Past Performance

Sales
Gross Margin
Gross Margin %

Balance Sheet

Current Assets

Long-term Assets

Long-term Assets

$0

$0

$521,650

Accumulated Depreciation

$0

$0

$100,000

Total Long-term Assets

$0

$0

$421,650

Total Assets

$0

$0

$2,015,046

Accounts Payable

$0

$0

$8,435

Current Borrowing

$0

$0

$58,000

Other Current Liabilities (interest free)

$0

$0

$0

Total Current Liabilities

$0

$0

$66,435

Long-term Liabilities

$0

$0

$402,000

Total Liabilities

$0

$0

$468,435

Paid-in Capital

$0

$0

$525,000

Retained Earnings

$0

$0

$85,985

Earnings

$0

$0

$935,626

Total Capital

$0

$0

$1,546,611

Total Capital and Liabilities

$0

$0

$2,015,046

60

Current Liabilities

Other Inputs
Payment Days

2.3 Company Locations and Facilities


Okyna Rempah Bali Agros plant and office is located in Kayuambua - Bangli.
The warehouse has the capacity to prepare approximately 6,000 60kg bags of
exportable coffee beans. The facility is 1.000m2 and will have 30 selecting
machines with capacity to prepare 40,000 bags for exportation and 80,000
bags for storage. The proposed facility also handle shipping.

Products
Luwak coffee comes from Bali island - Indonesia, an area well known for its
excellent coffee. Also native to the area is a small civilize animal called a
Paroxurus. The locals call them luwaks. These little mammals live in trees and
one of their favorite foods is the red, ripe coffee cherry. They eat the cherries,

bean and all. While the bean is in the little guys stomach, it undergoes
chemical treatment and fermentation. The bean finishes it journey through
the digestive system, and exits.
The still intact beans are collected from the forest floor, and are cleaned, then
roasted and ground just like other coffee. The resulting coffee is said to be
like no other. It has a rich, heavy flavor with hint of caramel or chocolate.
Other terms used to describe it are earthly, musty and exotic. The body is
almost syrupy and its very smooth.

3.1 Competitive Comparison


In order to differentiate our product, coffee, which is a commodity, from the
product offering of competitors, all beans are guaranteed fresh and are
shipped within seven days of preparation. The beans shipped by Okyna
Rempah Bali Agro are therefore better than most and are guaranteed fresh.
In addition, all of the farms of Okyna Rempah Bali Agro adhere to
environmentally sound farming practices and avoid the use of pesticides and
chemicals in crop production.
There are approximately ten competitors who offer a product similar to ours.
Our research indicates that with our special treatment for the coffee, we
would become one of the top four, in terms of quality, providers. We also
have the advantage of established distribution channels and reputation. In
addition, improvements to our marketing efforts will further separate us from
the larger market and from our close competitors.

3.2 Sales Literature


Okyna Rempah Bali Agro currently works with importers who handle all of our
shipments. Likewise, we have dealt with the same Indonesian wholesalers, for
internal sales, each year. Sales to this point have been handled through
personal selling. Additional sales literature will include a website, and direct
mail to specialty roasters and importers.

3.3 Sourcing
The facility is ideally located in Kayuambua, Kintamani - Bangli. The beans
produced in the region are of the highest quality. With additional financing,
we want to make more volume the product.

Market Analysis Summary


Coffee is the second largest commodity market next to oil, and Luwak coffee
comes from Bali Island - Indonesia well known for its excellent coffee.
Imports of coffee in the United States have increased ninety-four percent in
the past five years and consumption of coffee within Indonesia has seen
similar increases. In addition, demand for Luwak coffee is above the market
clearing level, and market price and crop yield estimates are at an all time
high.
The increase in the number of independent specialty roasters in the United
States, Australia and others has contributed to and is an indicator of the
increased demand for coffee. Within the larger coffee market is our target
market is the specialty roaster. These discerning customers want the highest
quality coffee beans. They serve the growing "gourmet" coffee market and
are represented by thousands of specialty roasters. The Luwak coffee bean is
considered to be the best in the world and as such, the demand for Luwak
coffee is high on the specialty roaster market. Specialty roasters are willing to
pay more for Luwak coffee and attempt to distinguish themselves via the
characteristics of the bean they use i.e. the location in which it was grown,
farming methods, bean size, etc. The final consumer is relatively price
insensitive if the coffee is good, has won awards, or is compatible with a
popular trend. We estimate that specialty roasting in the U.S. alone is a
($USD) one-billion market.

4.1 Market Segmentation


The potential customer groups for Okyna Rempah Bali Agro are:

Market research suggests that there are approximately 100 importers of


Luwak coffee that would be able to handle the quantities of our shipments
and are in our target market .
Market serves as a safety valve for our export business. By maintaining
relationships with wholesalers we have an alternative market with established
distribution channels.
As we move towards maximum capacity we will plan to more aggressively
target this audience. We hope to eventually reduce transactions with
wholesalers and capture their value-added costs as profit. We anticipate that
this effort will begin approximately four years into operation of the facility.

Market Analysis
2009
Potential
Customers

2010

2011

2012

2013

Growth

CAGR

U.S. Importers
(60kg bags)

26%

70,140

88,376

111,354

140,306

176,786

26.00%

Australian
Importers (60kg
bags)

26%

30,060

37,876

47,724

60,132

75,766

26.00%

26.00%

100,200

126,252

159,078

200,438

252,552

26.00%

Total

4.2 Strategy and Implementation Summary


Okyna Rempah Bali Agro strategy is to expand production capabilities in order
to fulfill the requests of importers with whom we currently deal for larger
orders which we are unable to currently fulfill. We intend to first maximize
quantity of coffee sold within existing channels and second, establish
additional accounts through targeted marketing efforts.

Marketing Strategy
Okyna Rempah Bali Agro marketing strategy will include the use of targeted
print media advertising and direct selling to importers who provide Luwak
coffee to specialty roasters. We will capitalize on existing relationships with
importers who have stated their willingness to contact affiliates and
recommend Okyna Rempah Bali Agro coffee. We have positioned ourselves as
a differentiated provider of the highest quality Luwak coffee. The primary goal
of all marketing efforts will be to communicate this to existing and potential
customers.

5.1 Distribution Strategy


Distribution is one of the greatest challenges faced by Okyna Rempah Bali
Agro. The distribution system of Indonesia is largely outdated and inefficient.
Moreover, taxes, specifically excise taxes are high. Distribution costs for
internal sales are absorbed by the customer but distribution costs for exports
are absorbed by us. Increasing the volume of our exports makes us eligible to

receive reduced fees and helps ensure that trucks and rail cars are running at
maximum capacity.

5.2 Marketing Programs


Our most important marketing program is an increase in personal selling
combined with targeted direct mail and print advertising. The program is
intended to establish contractual agreements with 10 additional importers,
increase brand awareness of our product, and communicate our position as a
provider of the highest quality Luwak coffee on the market.
Another key marketing program is the development of a sophisticated
Website. The goal of this program is to increase our presence on the world
wide web and provide additional means of communication and customer data
collection.

5.3 Pricing Strategy


Because Okyna Rempah Bali Agro adheres to higher quality standards, the
price of our coffee is slightly higher (four to nine percent) than the market
average. Beans that do not meet Okyna Rempah Bali Agro quality standards
are resold on the Indonesian market at the current market price. Luwak
coffee, on the import market, now sells for US$ 213.56/60kg bag. According
to Okyna Rempah Bali Agro pricing strategy, Okyna Rempah Bali Agro coffee
would sell for approximately US$ 224/60kg bag. Importers have to this point
been willing to pay the additional cost.

5.4 Sales Strategy


Okyna Rempah Bali Agro strategy focuses first on meeting the increased
demand from importers with whom we have established relationships for
larger orders. These importers are critical to our ability to acquire additional
accounts without having to spend a great deal on sales efforts. Secondly we
will focus on increasing the volume, while maintaining the percentage of
sales, of beans sold to the internal Indonesian market. When we have
reached maximum sales to existing channels we can then shift the majority of
our focus to securing additional import accounts.

5.4.1 Sales Forecast


The following chart and table show our present sales forecast. We project
healthy growth in sales in 2011, a slightly smaller increase again in 2012, and

reach maximum for production capacity in 2013 representing a large growth


over the previous year.

Sales by year
$50,000,000
$45,000,000
$40,000,000
$35,000,000
$30,000,000

Other

$25,000,000

Export

$20,000,000
$15,000,000
$10,000,000
$5,000,000
$2011

2012

2013

Sales Forecast
2011

2012

2013

100,200

120,000

160,000

100,200

120,000

160,000

2011

2012

2013

$262.08

$275.18

$288.29

$0.00

$0.00

$0.00

$26,260,416

$33,021,600

$46,126,400

$0

$0

$0

$26,260,416

$33,021,600

$46,126,400

Direct Unit Costs

2011

2012

2013

Import and Export

$212.00

$222.60

$233.20

$0.00

$0.00

$0.00

$21,242,400

$26,712,000

$37,312,000

$0

$0

$0

$21,242,400

$26,712,000

$37,312,000

Unit Sales
Import and Export
Other
Total Unit Sales
Unit Prices
Import and Export
Other
Sales
Import and Export
Other
Total Sales

Other
Direct Cost of Sales
Import and Export
Other
Subtotal Direct Cost of Sales

Management Summary
Okyna Rempah Bali Agro management consists of four full-time employees.
Additional assistance is acquired on a part-time basis and/or through the use of
consultants, specifically in legal matters. Detailed descriptions are found in the
following section.

6.1 Management Team


Okyna Rempah Bali Agro is organized into three functional areas: product
sourcing, sales, and marketing; production and shipping; and finance and
administration.
I Wayan Widana S.Sos., President in charge of finance and administration, 41,
has worked in the coffee export business for 10 years. Before starting Okyna
Rempah Bali Agro he is also President of Bali Okina carving stone in Bali Island
Indonesia. He began Bali Okina Carving Stone 15 years .
Thea Kustiati in charge of product sourcing, sales, and marketing. Completed her
MBA at Calstate University of Northridge and owned Company for 15 years on
Aviation Industry and commodities market as a broker. Her later took a position
as an International Sales and Marketing Representative for a major agricultural
brokerage and supply firm .
I Putu Resika in charge of production and shipping. Worked as a for the
Indonesian government . He is responsible for the supervision of all plant
employees.
Additional Management:
Pandu Prasnaditya as a Quality Control and IT Manager
Ni Ketut Darmayanti as a Financial Manager

Financial Plan
We want to finance growth through a combination of long-term debt and cash
flow. Purchase of the larger facility and equipment will require approximately
eighty percent debt financing. Additional technology will be primarily financed
with cash-flow. Inventory turnover must remain at or above four or we run the
risk of backing up orders and jeopardizing our freshness guarantees. We have
had no problems with accounts receivable and we expect to maintain our
collection days at 30 with thirty percent of sales on credit.
In addition, we must achieve gross margins of thirty-five percent and hold
operating costs no more than sixty-five percent of sales.

7.1 Break-even Analysis

The break-even analysis shows that Okyna Rempah Bali Agro has sufficient sales
strength to remain viable. Our per month break-even point projections are
detailed in the following table and chart.

Break-even Analysis
Monthly Units Break-even
Monthly Revenue Break-even

2,049
$537,078

Assumptions:
Average Per-Unit Revenue

$262.08

Average Per-Unit Variable Cost

$212.00

Estimated Monthly Fixed Cost

7.2 Important Assumptions

$102,629

Important assumptions for this plan are found in the following table. These
assumptions largely determine the financial plan and require that we secure
additional financing.

General Assumptions
2011

2012

2013

14.00%

14.00%

14.00%

9.00%

9.00%

9.00%

47.00%

47.00%

47.00%

Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

7.3 Key Financial Indicators


The most important factor to Okyna Rempah Bali Agro anticipated growth is the
procurement of necessary financing. The size of the orders currently requested by
importers are larger than what can be produced given our present plant capacity.
The following chart shows changes in key financial indicators: sales, gross
margin, operating expenses, collection days, and inventory turnover. The growth
in sales goes above thirty percent in the first year, twenty percent in second, and
back to thirty percent in year three after which it will settle. We expect to
increase gross margin but our projections show a decline in the first two years
following the purchase of the new facility. This is due to the facilities not being
run at maximum capacity. The projections for collection days and inventory
turnover show that we expect a decline in these indicators.

Benchmark
3
2.5
2
2011

1.5

2012
2013

1
0.5
0
Sales

Gross Margin %

Operating
Expenses

Inventory
Turnover

7.4 Projected Profit and Loss


We expect to close the first year of production in the new facility with quite
exempary ($USD) sales and to increase our sales in the second and third years.
Net earnings will be above industry average ($USD).

Gross Margin Yearly


$9,000,000.00
$8,000,000.00
$7,000,000.00
$6,000,000.00
$5,000,000.00
$4,000,000.00
$3,000,000.00
$2,000,000.00
$1,000,000.00
$2011

2012

2013

Profit Yearly
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$2011

2012

2013

Pro Forma Profit and Loss

Sales

2011

2012

2013

$26,260,416

$33,021,600

$46,126,400

Direct Cost of Sales

$21,242,400

$26,712,000

$37,312,000

Production Payroll

$300,396

$316,884

$331,912

Other Costs of Sales

$300,000

$345,000

$410,000

Total Cost of Sales

$21,842,796

$27,373,884

$38,053,912

$4,417,620

$5,647,716

$8,072,488

16.82%

17.10%

17.50%

Sales and Marketing Payroll

$225,492

$128,150

$136,521

Advertising/Promotion

$144,000

$165,000

$165,000

Travel

$21,000

$22,500

$24,000

Other Sales and Marketing Expenses

$24,000

$26,500

$28,500

$414,492

$342,150

$354,021

1.58%

1.04%

0.77%

$119,400

$130,228

$173,377

$0

$0

$0

$216,000

$216,000

$216,000

Leased Equipment

$50,400

$50,400

$50,400

Utilities

$36,000

$36,000

$36,000

Insurance

$72,000

$75,000

$78,000

$305,250

$300,000

$300,000

Payroll Taxes

$0

$0

$0

Other General and Administrative


Expenses

$0

$0

$0

$799,050

$807,628

$853,777

3.04%

2.45%

1.85%

$0

$0

$0

Gross Margin
Gross Margin %
Operating Expenses
Sales and Marketing Expenses

Total Sales and Marketing Expenses


Sales and Marketing %
General and Administrative Expenses
General and Administrative Payroll
Marketing/Promotion
Depreciation

Rent

Total General and Administrative


Expenses
General and Administrative %
Other Expenses:
Other Payroll

Consultants

$18,000

$24,000

$30,000

$0

$0

$0

$18,000

$24,000

$30,000

0.07%

0.07%

0.07%

$1,231,542

$1,173,778

$1,237,798

Profit Before Interest and Taxes

$3,186,078

$4,473,938

$6,834,690

EBITDA

$3,402,078

$4,689,938

$7,050,690

$269,166

$238,449

$225,191

$1,370,949

$1,990,680

$3,106,465

$1,545,964

$2,244,809

$3,503,035

5.89%

6.80%

7.59%

Other Expenses
Total Other Expenses
Other %
Total Operating Expenses

Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

7.5 Projected Cash Flow


Okyna Rempah Bali Agro expects to manage cash flow over the next three years
with the assistance of a loan supported by Private Loan Investor This financing
assistance is required to provide the working capital to meet the current needs
for the construction of the new production facility and additional personnel,
distribution costs, and other related expenses.

Pro Forma Cash Flow


2011

2012

2013

$26,260,416

$33,021,600

$46,126,400

$26,260,416

$33,021,600

$46,126,400

Sales Tax, VAT, HST/GST Received

$0

$0

$0

New Current Borrowing

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

$2,700,000

$0

$0

Sales of Other Current Assets

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

New Investment Received

$0

$650,000

$650,000

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received

New Long-term Liabilities

Subtotal Cash Received

$28,960,416

$33,671,600

$46,776,400

2011

2012

2013

$645,288

$575,262

$641,810

$23,678,478

$29,770,693

$41,735,934

$24,323,766

$30,345,955

$42,377,744

$0

$0

$0

$57,996

$0

$0

$0

$0

$0

$305,250

$294,636

$0

$60,000

$75,000

$85,000

$2,700,000

$0

$0

$0

$0

$0

$27,447,012

$30,715,591

$42,462,744

Net Cash Flow

$1,513,404

$2,956,009

$4,313,656

Cash Balance

$2,507,664

$5,463,673

$9,777,329

Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

7.6 Projected Balance Sheet


As shown in the balance sheet in the following table, our net will grow quickly by
the end of 2013 and to continue steadily through the end of the plan period. The
monthly projections are in the appendix.

Pro Forma Balance Sheet


2011

2012

2013

Cash

$2,507,664

$5,463,673

$9,777,329

Inventory

$1,958,880

$2,463,262

$3,440,747

Assets
Current Assets

Other Current Assets

$303,936

$378,936

$463,936

$4,770,480

$8,305,872

$13,682,013

$3,221,650

$3,221,650

$3,221,650

$316,000

$532,000

$748,000

Total Long-term Assets

$2,905,650

$2,689,650

$2,473,650

Total Assets

$7,676,130

$10,995,522

$16,155,663

2011

2012

2013

$1,786,801

$2,506,020

$3,513,127

Current Borrowing

$4

$4

$4

Other Current Liabilities

$0

$0

$0

$1,786,805

$2,506,024

$3,513,131

$2,796,750

$2,502,114

$2,502,114

$4,583,555

$5,008,138

$6,015,245

$525,000

$1,175,000

$1,825,000

Retained Earnings

$1,021,611

$2,567,575

$4,812,383

Earnings

$1,545,964

$2,244,809

$3,503,035

Total Capital

$3,092,575

$5,987,383

$10,140,418

Total Liabilities and Capital

$7,676,130

$10,995,522

$16,155,663

Net Worth

$3,092,575

$5,987,383

$10,140,418

Total Current Assets


Long-term Assets
Long-term Assets
Accumulated Depreciation

Liabilities and Capital


Current Liabilities
Accounts Payable

Subtotal Current Liabilities


Long-term Liabilities
Total Liabilities
Paid-in Capital

7.7 Business Ratios


Standard business ratios are included in the following table. The ratios show an
aggressive plan for growth in order to reach maximum production within three
years. Return on investment increases each year as we bring the new facility to
maximum capacity and production. Return on sales and assets remain strong and
cost of goods decreases based upon efficiency projections.

Ratio Analysis
2011

2012

2013

Industry
Profile

43.14%

25.75%

39.69%

5.50%

25.52%

22.40%

21.30%

12.43%

Other Current Assets

3.96%

3.45%

2.87%

27.50%

Total Current Assets

62.15%

75.54%

84.69%

60.13%

Long-term Assets

37.85%

24.46%

15.31%

39.87%

100.00%

100.00%

100.00%

100.00%

Current Liabilities

23.28%

22.79%

21.75%

8.46%

Long-term Liabilities

36.43%

22.76%

15.49%

16.54%

Total Liabilities

59.71%

45.55%

37.23%

25.00%

Net Worth

40.29%

54.45%

62.77%

75.00%

100.00%

100.00%

100.00%

100.00%

Gross Margin

16.82%

17.10%

17.50%

23.32%

Selling, General & Administrative


Expenses

10.94%

10.31%

9.91%

9.39%

0.55%

0.50%

0.36%

2.06%

12.13%

13.55%

14.82%

4.36%

Current

2.67

3.31

3.89

5.32

Quick

1.57

2.33

2.92

3.45

Total Debt to Total Assets

59.71%

45.55%

37.23%

27.13%

Pre-tax Return on Net Worth

94.32%

70.74%

65.18%

12.79%

Pre-tax Return on Assets

38.00%

38.52%

40.91%

17.55%

Additional Ratios

2011

2012

2013

Net Profit Margin

5.89%

6.80%

7.59%

n.a

Return on Equity

49.99%

37.49%

34.55%

n.a

Sales Growth
Percent of Total Assets
Inventory

Total Assets

Percent of Sales
Sales

Advertising Expenses
Profit Before Interest and Taxes
Main Ratios

Activity Ratios
Inventory Turnover

10.91

12.08

12.64

n.a

Accounts Payable Turnover

14.25

12.17

12.17

n.a

27

26

26

n.a

3.42

3.00

2.86

n.a

Debt to Net Worth

1.48

0.84

0.59

n.a

Current Liab. to Liab.

0.39

0.50

0.58

n.a

$2,983,675

$5,799,847

$10,168,882

n.a

11.84

18.76

30.35

n.a

Assets to Sales

0.29

0.33

0.35

n.a

Current Debt/Total Assets

23%

23%

22%

n.a

Acid Test

1.57

2.33

2.92

n.a

Sales/Net Worth

8.49

5.52

4.55

n.a

Dividend Payout

0.00

0.00

0.00

n.a

Payment Days
Total Asset Turnover
Debt Ratios

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios

Appendix

Sales Forecast

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Unit Sales

Import and Export

0%

8,700

8,200

8,800

8,300

8,450

8,050

8,000

8,200

8,050

8,000

9,050

8,400

Other

0%

8,700

8,200

8,800

8,300

8,450

8,050

8,000

8,200

8,050

8,000

9,050

8,400

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$262.08

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$2,280,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Unit Sales

Unit Prices

Import and Export

Other

Sales

Import and Export

Other

Total Sales

$2,280,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Direct Unit Costs

Import and Export

0.00%

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

$212.00

Other

0.00%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$1,844,400

$1,738,400

$1,865,600

$1,759,600

$1,791,400

$1,706,600

$1,696,000

$1,738,400

$1,706,600

$1,696,000

$1,918,600

$1,780,800

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,844,400

$1,738,400

$1,865,600

$1,759,600

$1,791,400

$1,706,600

$1,696,000

$1,738,400

$1,706,600

$1,696,000

$1,918,600

$1,780,800

Direct Cost of Sales

Import and Export

Other

Subtotal Direct Cost of Sales

Personnel Plan

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$3,200

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$18,333

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

Other

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

$15,041

Subtotal

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

Marco Slivera Sr, CEO

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

Ralph Henzo, CFO

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$3,500

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

$750

Other

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

Subtotal

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

Name or Title or Group

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Name or Title or Group

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Name or Title or Group

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total People

15

15

15

15

15

15

15

15

15

15

15

15

Total Payroll

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

Production Personnel

Antonio Silvera, VP Production

Plant Employees

Other

Subtotal

Sales and Marketing Personnel

Marco Silvera Jr, VP Sales/Mktg.

General and Administrative Personnel

Admin/Acctg. Staff

Other Personnel

Pro Forma Profit and Loss

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$2,280,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

Direct Cost of Sales

$1,844,400

$1,738,400

$1,865,600

$1,759,600

$1,791,400

$1,706,600

$1,696,000

$1,738,400

$1,706,600

$1,696,000

$1,918,600

$1,780,800

Production Payroll

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

$25,033

Other Costs of Sales

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

Sales

Total Cost of Sales

$1,894,433

$1,788,433

$1,915,633

$1,809,633

$1,841,433

$1,756,633

$1,746,033

$1,788,433

$1,756,633

$1,746,033

$1,968,633

$1,830,833

$385,663

$360,623

$390,671

$365,631

$373,143

$353,111

$350,607

$360,623

$353,111

$350,607

$403,191

$370,639

16.91%

16.78%

16.94%

16.81%

16.85%

16.74%

16.72%

16.78%

16.74%

16.72%

17.00%

16.84%

Sales and Marketing Payroll

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

$18,791

Advertising/Promotion

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

$12,000

Travel

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

$1,750

Other Sales and Marketing


Expenses

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

$34,541

1.51%

1.61%

1.50%

1.59%

1.56%

1.64%

1.65%

1.61%

1.64%

1.65%

1.46%

1.57%

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$9,950

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

$18,000

Leased Equipment

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

$4,200

Utilities

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Insurance

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$6,000

$0

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$41,150

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

$68,900

1.80%

3.21%

2.99%

3.17%

3.11%

3.27%

3.29%

3.21%

3.27%

3.29%

2.90%

3.13%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$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

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$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

0.07%

0.07%

0.07%

0.07%

0.07%

0.07%

0.07%

0.07%

0.07%

0.07%

0.06%

0.07%

Total Operating Expenses

$77,191

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

$104,941

Profit Before Interest and Taxes

$308,472

$255,682

$285,730

$260,690

$268,202

$248,170

$245,666

$255,682

$248,170

$245,666

$298,250

$265,698

EBITDA

$326,472

$273,682

$303,730

$278,690

$286,202

$266,170

$263,666

$273,682

$266,170

$263,666

$316,250

$283,698

$23,885

$23,621

$23,356

$23,092

$22,827

$22,563

$22,298

$22,034

$21,769

$21,505

$21,240

$20,976

Taxes Incurred

$133,756

$109,069

$123,316

$111,671

$115,326

$106,035

$104,983

$109,815

$106,408

$105,356

$130,195

$115,019

Net Profit

$150,831

$122,992

$139,058

$125,927

$130,049

$119,572

$118,385

$123,834

$119,992

$118,805

$146,815

$129,703

6.62%

5.72%

6.03%

5.79%

5.87%

5.67%

5.65%

5.76%

5.69%

5.67%

6.19%

5.89%

Nov

Dec

Gross Margin

Gross Margin %

Operating Expenses

Sales and Marketing Expenses

Total Sales and Marketing


Expenses

Sales and Marketing %

General and Administrative


Expenses

General and Administrative


Payroll

Marketing/Promotion

Depreciation

Rent

Payroll Taxes

Other General and


Administrative Expenses

Total General and


Administrative Expenses

General and Administrative %

9%

Other Expenses:

Other Payroll

Consultants

Other Expenses

Total Other Expenses

Other %

Interest Expense

Net Profit/Sales

Pro Forma Cash Flow

Jan

Cash Received

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Cash from Operations

Cash Sales

$2,280,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

$2,280,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

$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

$2,700,000

$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

$4,980,096

$2,149,056

$2,306,304

$2,175,264

$2,214,576

$2,109,744

$2,096,640

$2,149,056

$2,109,744

$2,096,640

$2,371,824

$2,201,472

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Cash Spending

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

$53,774

Bill Payments

$132,806

$3,668,016

$1,850,946

$2,222,911

$1,867,189

$2,040,313

$1,827,442

$1,898,330

$1,996,185

$1,883,378

$1,911,190

$2,379,772

Subtotal Spent on Operations

$186,580

$3,721,790

$1,904,720

$2,276,685

$1,920,963

$2,094,087

$1,881,216

$1,952,104

$2,049,959

$1,937,152

$1,964,964

$2,433,546

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

$4,833

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal


Repayment

$0

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

$27,750

Purchase Other Current Assets

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$225,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$421,413

$3,984,373

$2,167,303

$2,539,268

$2,183,546

$2,356,670

$2,143,799

$2,214,687

$2,312,542

$2,199,735

$2,227,547

$2,696,129

Net Cash Flow

$4,558,683

($1,835,317)

$139,001

($364,004)

$31,030

($246,926)

($47,159)

($65,631)

($202,798)

($103,095)

$144,277

($494,657)

Cash Balance

$5,552,943

$3,717,626

$3,856,626

$3,492,622

$3,523,653

$3,276,727

$3,229,568

$3,163,937

$2,961,139

$2,858,044

$3,002,321

$2,507,664

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Subtotal Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0.00%

New Long-term Liabilities

Subtotal Cash Received

Expenditures

Expenditures from Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current


Borrowing

Purchase Long-term Assets

Dividends

Subtotal Cash Spent

Pro Forma Balance Sheet

Assets

Starting
Balances

Current Assets

Cash

$994,260

$5,552,943

$3,717,626

$3,856,626

$3,492,622

$3,523,653

$3,276,727

$3,229,568

$3,163,937

$2,961,139

$2,858,044

$3,002,321

$2,507,664

Inventory

$355,200

$2,028,840

$1,912,240

$2,052,160

$1,935,560

$1,970,540

$1,877,260

$1,865,600

$1,912,240

$1,877,260

$1,865,600

$2,110,460

$1,958,880

Other Current Assets

$243,936

$248,936

$253,936

$258,936

$263,936

$268,936

$273,936

$278,936

$283,936

$288,936

$293,936

$298,936

$303,936

$1,593,396

$7,830,719

$5,883,802

$6,167,722

$5,692,118

$5,763,129

$5,427,923

$5,374,104

$5,360,113

$5,127,335

$5,017,580

$5,411,717

$4,770,480

Long-term Assets

$521,650

$746,650

$971,650

$1,196,650

$1,421,650

$1,646,650

$1,871,650

$2,096,650

$2,321,650

$2,546,650

$2,771,650

$2,996,650

$3,221,650

Accumulated Depreciation

$100,000

$118,000

$136,000

$154,000

$172,000

$190,000

$208,000

$226,000

$244,000

$262,000

$280,000

$298,000

$316,000

Total Long-term Assets

$421,650

$628,650

$835,650

$1,042,650

$1,249,650

$1,456,650

$1,663,650

$1,870,650

$2,077,650

$2,284,650

$2,491,650

$2,698,650

$2,905,650

Total Current Assets

Long-term Assets

Total Assets

$2,015,046

$8,459,369

$6,719,452

$7,210,372

$6,941,768

$7,219,779

$7,091,573

$7,244,754

$7,437,763

$7,411,985

$7,509,230

$8,110,367

$7,676,130

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$8,435

$3,606,760

$1,776,433

$2,160,879

$1,798,931

$1,979,476

$1,764,281

$1,831,660

$1,933,419

$1,820,231

$1,831,254

$2,318,158

$1,786,801

$58,000

$53,167

$48,334

$43,501

$38,668

$33,835

$29,002

$24,169

$19,336

$14,503

$9,670

$4,837

$4

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Current Liabilities

$66,435

$3,659,927

$1,824,767

$2,204,380

$1,837,599

$2,013,311

$1,793,283

$1,855,829

$1,952,755

$1,834,734

$1,840,924

$2,322,995

$1,786,805

Long-term Liabilities

$402,000

$3,102,000

$3,074,250

$3,046,500

$3,018,750

$2,991,000

$2,963,250

$2,935,500

$2,907,750

$2,880,000

$2,852,250

$2,824,500

$2,796,750

Total Liabilities

$468,435

$6,761,927

$4,899,017

$5,250,880

$4,856,349

$5,004,311

$4,756,533

$4,791,329

$4,860,505

$4,714,734

$4,693,174

$5,147,495

$4,583,555

Paid-in Capital

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$525,000

$85,985

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$1,021,611

$935,626

$150,831

$273,823

$412,881

$538,809

$668,857

$788,429

$906,814

$1,030,648

$1,150,640

$1,269,445

$1,416,261

$1,545,964

Total Capital

$1,546,611

$1,697,442

$1,820,434

$1,959,492

$2,085,420

$2,215,468

$2,335,040

$2,453,425

$2,577,259

$2,697,251

$2,816,056

$2,962,872

$3,092,575

Total Liabilities and Capital

$2,015,046

$8,459,369

$6,719,452

$7,210,372

$6,941,768

$7,219,779

$7,091,573

$7,244,754

$7,437,763

$7,411,985

$7,509,230

$8,110,367

$7,676,130

Net Worth

$1,546,611

$1,697,442

$1,820,434

$1,959,492

$2,085,420

$2,215,468

$2,335,040

$2,453,425

$2,577,259

$2,697,251

$2,816,056

$2,962,872

$3,092,575

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

10

11

12

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

14.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

47.00%

Liabilities and Capital

Current Liabilities

Accounts Payable

Current Borrowing

Other Current Liabilities

Retained Earnings

Earnings

General Assumptions

Plan Month

Current Interest
Rate

Long-term Interest
Rate

Tax Rate

Other