Executive Summary

Victorian Renovations (VR) is a start-up company that is being formed to meet the growing
need for unique restored vintage homes in downtown Portland, Oregon. The company is
initially focused on one building, located on Fifth and Pearl, which it is in the process of
purchasing. The house will be renovated by the two owners of the business, Doug Machen
and Sarah Renner, both of whom are experienced in house renovation and both of whom have
graduated from the MBA program at the University of Portland. External contractors will
also be used for the larger jobs, but most of the work will be completed by Doug and Sarah.

After completion, the house will be rented out, and the income stream will be used to pay the
mortgage on the house and to finance the purchase of another property in downtown
Portland. Due to the rising demand of unique homes in this area, it is believed that the
property at Fifth and Pearl will be rented out for a high price and will produce substantial
cash flow to finance future projects.

1.1 Mission

The mission of VR is to develop rundown houses in the Portland area, to improve the look
and financial viability of downtown Portland, and rent those properties out to provide a
stream of income for future investments. The company will develop unique homes targeting
the discriminating renter who is willing to pay more for a top quality home. VR seeks to be
viewed as a highly visible company in the property development market.

1.2 Objectives

The following are the main objectives for VR:

• To obtain investor funding to purchase and renovate a four bedroom residence on

Pearl and Fifth in the Hawthorne District of Portland, Oregon.
• To complete renovations on the four bedroom victorian residence, to convert it into
two 2-bedroom units by October 2001.
• To rent out that residence to provide an income stream enough to pay the mortgage
and provide additional income for future projects.
• To purchase another residence for renovation immediately thereafter.
1.3 Keys to Success

The keys to success for this project will be:

• To complete the renovation work within the scheduled time and within the budgeted
amount.
• To find rental occupants for the building before renovations are completed or as soon
as possible after completion.
• To maintain an average 80% occupancy rate each year.

Company Summary
Victorian Renovations is a vintage house renovator based in Portland, OR. We
purchase dilapidated buildings at low cost and renovate them in vintage Victorian style,
they are then rented to young families and couples. We are a privately-owned Oregon
corporation. We are relatively small, but have a good understanding of the market, a
background in this industry, and a great passion for our work.

2.1 Start-up Summary

The company was started when these two business colleagues realized the number of old
dilapidated homes in Portland in need of repair and correspondingly the growth in popularity
of older restored homes.

They have recently located the house on Pearl and Fifth and are in the process of obtaining a
loan. Each partner will contribute investment which will be used to cover the down payment
of 20%, the mortgage payments for the first six months while the house is being renovated,
and the materials and labor to develop the building. Much of the work will be done by Doug
and Sarah, since they are both owners of older homes and have completed much of the
renovation and repair to those homes themselves.
Other costs associated with start-up are the legal costs of incorporating the business and
building insurance.

Start-up

Requirements

Start-up Expenses
Legal $500
Insurance $250
Total Start-up Expenses $750

Start-up Assets
Cash Required $74,500
Other Current Assets $750
Long-term Assets $144,000
Total Assets $219,250

Total Requirements $220,000

Start-up Funding

Start-up Expenses to Fund $750

Start-up Assets to Fund $219,250
Total Funding Required $220,000

Assets
Non-cash Assets from Start-up $144,750
Cash Requirements from Start-up $74,500
Additional Cash Raised $0
Cash Balance on Starting Date $74,500
Total Assets $219,250

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $160,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $160,000

Capital

Planned Investment
Sarah Renner $30,000
Doug Machen $30,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $60,000

Loss at Start-up (Start-up Expenses) ($750)

Total Capital $59,250

Total Capital and Liabilities $219,250

Total Funding $220,000

2.2 Company Ownership

Victorian Renovations is a privately-held Oregon corporation. It is jointly owned by friends

and business partners, Sarah Renner and Doug Machen.

Services
Currently the company has just one product, which is the house on Pearl and Fifth.

Market Analysis Summary

Housing exploded into the 21st century on a high note, breaking records for home sales,
home ownership rates, and the value of residential construction. Buoyed by the longest
economic expansion in history, these residential real estate indicators all set records in 1999.

While Portland is occasionally an enigma when stacked next to national trends--mostly

because its urban growth boundary demands greater infill development--a report released this
summer is nonetheless likely to raise some eyebrows.

"The State of the Nation's Housing: 2000," prepared by Harvard University's Joint Center for
Housing Studies and funded by the Ford Foundation, found that Portland's housing prices
leaped 44% over the past decade--and even rivaled its neighboring peers, Seattle and San
Francisco, by substantial percentage points.

This summer, metropolitan Portland's median sales price for homes rose above the $170,000
mark--and the Lake Oswego/West Linn market soared above the $290,000 mark--according
to the Residential Multiple Listing Service's Market Action.

Crunching numbers adjusted for inflation and factoring out rises in home size and quality, the
Harvard University report concluded that Portland had the third-largest leap in housing prices
out of 35 U.S. cities. The heftiest increases were tallied by Salt Lake City, with 60%, and
Denver, with 49%. One of the largest dips in housing prices affected another West Coast
neighbor, Los Angeles, which saw prices slump 18%. Metro Councilor Rod Park attributes
much of Portland's home-pricing increases to the influx of out-of-state workers. Intel
Corporation, for instance, recently announced plans to expand facilities in Hillsboro's high-
tech Sunset Corridor. Park said the global chip maker plans to fill many new jobs with out-of-
state employees.

The trend with Intel snagging local tax breaks and then bringing in workers from elsewhere
ought to raise the eyebrows of local officials, and especially local colleges and universities,
he added.

"What we view up here as expensive has a lot to do with people with more earning potential
coming in and bidding the prices up," Park said.

According to an affordability index prepared by the National Association of Home Builders,

Portland recently ranked as the 25th least affordable of 192 major U.S. cities.

(Source: The Portland Business Journal, Brian J. Back Business Journal Staff Writer.)

4.1 Market Segmentation

Victorian Renovations will be targeting upper income couples to rent its properties.
Currently, although the labor market is buoyant in Portland, there is some uncertainty ahead,
meaning that there are many people moving into the area who are unsure whether they will be
staying for more than a couple of years. In addition, there are a large number of people
moving to Portland from out of state who do not know the city as yet, so would rather rent a
home than commit to a purchase.

The largest population group in Portland is 20-44 year olds and VR will be targeting the 25 to
30 year olds within this group. They have been out of college for a few years and have
established careers, but may not be ready to settle down yet with a home purchase. In
addition, many of them are earning high wages with high tech companies. It is estimated that
this group makes up 5% of all people in the 20-44 year old age group in Portland.

Portland Community Age Groups

1970 1980 1990

Under 5 years 29,779 23,883 30,314
5-19 years 94,079 68,259 76,792
20-44 years 114,472 150,431 193,287
45-64 years 90,607 67,881 73,269
65+ years 56,682 55,929 63,657
Median Age 32 31 34

(Source: US Census. Median value is the middle value, not an average.)

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
20 - 44 year olds 14% 11,050 12,597 14,361 16,372 18,664 14.00%
Other 0% 0 0 0 0 0 0.00%
Total 14.00% 11,050 12,597 14,361 16,372 18,664 14.00%

4.2 Service Business Analysis

Below are the most recent figures we are able to find on the Portland housing market. If
trends in the housing market have remained similar, the vacancy rate of 5.59% looks very
promising for VR, since the target is to have the building occupied 80% of the year.

City of Portland 1990 Housing Breakout:

Vacancy Rate: 5.59%

Owner Occupied: 99,244
Renter Occupied: 87,980

(Source: US Census.)

4.2.1 Competition and Buying Patterns

Competition comes in a number of forms in the portion of the housing market which VR will
target. There are a large number of housing options in the Portland market, however we
believe that there are very few houses that have been renovated in a unique Victorian style
that are for rent. For this reason, although this house will be converted into two 2-bedroom
apartments, we will be able to charge a premium price for rental. Where the average price for
a 2-bedroom apartment in downtown Portland is $850, we will charge $900 per unit. We
believe that there is room in the market for this vintage and quality of building in the rental
market.

Strategy and Implementation Summary

Our strategy is based on the fact that there is a large portion of people in the Portland area
who value comfortable, vintage living with all the modern conveniences. The homes that we
develop will be targeted towards people who are in the market for a rental property and are
willing to spend more on their homes to have authentic, classic surroundings. These people
are willing to pay more for this unique property.

5.1 Competitive Edge

The company's competitive edge is the expertise of the two owners in renovating and
restoring older homes. Both currently own vintage homs and have done much of the
renovation themselves, only bringing contractors in to do very large jobs. In addition, both
have strong business backgrounds, one in marketing and one in finance and accounting.

5.2 Marketing Strategy

The marketing for VR will be limited, since the company simply needs to rent out two
apartments for one year leases. A full color leaflet will be developed that will be posted
outside the property near the end of the restoring process. In addition, newspaper
advertisements will be placed in local newspapers and on rental websites.

5.3 Sales Strategy

Because these apartments will be high quality, VR will be choosy about who they will accept
as tenants. References and proof of employment or ability to pay the rent will be needed.
Also, one month's rent will be requested as a deposit on signing of the lease.

5.3.1 Sales Forecast

The following is the sales forecast for VR's first apartment building on Fifth and Pearl.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Rental Revenue $21,600 $23,760 $26,136
Other $0 $0 $0
Total Sales $21,600 $23,760 $26,136

Direct Cost of Sales Year 1 Year 2 Year 3

Rental Costs $2,160 $2,376 $2,614
Other $0 $0 $0
Subtotal Direct Cost of Sales $2,160 $2,376 $2,614

5.4 Milestones

The following Milestones table illustrate the key steps that Victorian Renovations must
achieve in order to ensure the success of this venture.

Milestones

Milestone Start Date End Date Budget Manager Department

Complete Sale on House 6/1/2001 6/15/2001 $2,000 Doug Machen Owner
Wall repairs 6/15/2001 6/30/2001 $3,000 Contractor Admin
Plumbing Repairs 6/15/2001 6/30/2001 $2,000 Doug Machen Owner
Floor Refinishing 6/30/2001 7/10/2001 $3,000 Renner/Machen Owners
Decorating 7/12/2001 8/30/2001 $5,000 Renner/Machen Owners
Advertise the House for Rent 8/25/2001 9/15/2001 $200 Sarah Renner Owner
Totals $15,200

Management Summary
Victorian Renovations will be wholly owned and managed by Doug Machen and Sarah
Renner. Both have MBA degrees from the University of Portland and both are experienced
home owners and renovators. Victorian Renovations will be a side business for them, since
they currently work time. They will be working on renovating the building on Fifth and
Pearl at night and on weekends.

Doug works for an accounting firm and deals with many real estate transactions for his
clients. This experience makes him perfect to negotiate the sales price and mortgage on the
house.

Sarah works as a marketing specialist for an interior design firm that focuses on high end
reproductions of antique era household items, such a victorian style sinks, taps, wall paper,
tiles, and furniture. Most of the products are sourced from overseas, so the company works
on big margins. As a result, employees can get good discounts on products from the
company. Sarah will be purchasing most products for the house renovation directly from her
work.

6.1 Personnel Plan

The owners will be working on this project alone, though they will be bringing in contractors
to do some of the heavier renovation work. For the first couple of years, neither will be
taking a salary. Instead, they will be plowing profits back into the business, with the aim of
buying other properties.

Financial Plan
The following financial information shows the assumptions and outcomes of the purchase,
renovation, and rental of the first property on Fifth and Pearl. No attempt has been made to
discuss the implications of purchasing other buildings, since these will happen on a more ad
hoc basis.

7.1 Important Assumptions

The following are conservative assumptions that will influence our financial projections.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 6.75% 6.75% 6.75%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Break-even Analysis

The regular Break-even Analysis is not appropriate for this project, but the following text
explains the Break-even chart.

Investors will receive 66% of the rental income from the property. It is estimated that this
property will produce $2400 per month of rental. At maximum occupancy, the payout to
investors will be fixed monthly cost of $1,600. The remaining $800 per month will be kept
in a savings account to pay for general upkeep of the building and any unexpected repairs. It
is estimated that routine bills and maintenance will be no more than $400 per month.

Break-even Analysis

Monthly Revenue Break-even $1,417

Assumptions:
Average Percent Variable Cost 10%
Estimated Monthly Fixed Cost $1,275

7.3 Projected Profit and Loss

The following Profit and Loss table illustrates that VR will lose money in the first year, but in
the second year, on this single property, the company will make a healthy return of 10% in
2002 and 15% in 2003.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $21,600 $23,760 $26,136
Direct Cost of Sales $2,160 $2,376 $2,614
Other Production Expenses $18,000 $0 $0
Total Cost of Sales $20,160 $2,376 $2,614

Gross Margin $1,440 $21,384 $23,522

Gross Margin % 6.67% 90.00% 90.00%

Expenses
Payroll $0 $0 $0
Sales and Marketing and Other Expenses $9,500 $1,300 $1,400
Depreciation $3,200 $4,800 $4,800
Leased Equipment $0 $0 $0
Utilities $2,300 $1,200 $1,300
Insurance $300 $300 $350
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0

Total Operating Expenses $15,300 $7,600 $7,850

Profit Before Interest and Taxes ($13,860) $13,784 $15,672

EBITDA ($10,660) $18,584 $20,472
Interest Expense $10,668 $10,380 $10,061
Taxes Incurred $0 $1,021 $1,684

Net Profit ($24,528) $2,383 $3,928

Net Profit/Sales -113.56% 10.03% 15.03%

7.4 Projected Cash Flow

The following Balance Sheet shows healthy cash flow that will enable VR to maintain the
existing location at Fifth and Pearl and allow Doug and Sarah to purchase a second property
in Portland in year two of the operation.
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $21,600 $23,760 $26,136
Subtotal Cash from Operations $21,600 $23,760 $26,136

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $21,600 $23,760 $26,136

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $0 $0 $0
Bill Payments $41,654 $16,489 $17,339
Subtotal Spent on Operations $41,654 $16,489 $17,339

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $3,938 $4,572 $4,891
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $45,592 $21,061 $22,231

Net Cash Flow ($23,992) $2,699 $3,905

Cash Balance $50,508 $53,207 $57,112

7.5 Projected Balance Sheet

The Balance Sheet shows a healthy company with a positive net worth that will ensure future
financial stability and the ability to grow through investment in other properties in the future.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $50,508 $53,207 $57,112
Other Current Assets $750 $750 $750
Total Current Assets $51,258 $53,957 $57,862

Long-term Assets
Long-term Assets $144,000 $144,000 $144,000
Accumulated Depreciation $3,200 $8,000 $12,800
Total Long-term Assets $140,800 $136,000 $131,200
Total Assets $192,058 $189,957 $189,062

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $1,274 $1,363 $1,431
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,274 $1,363 $1,431

Long-term Liabilities $156,062 $151,490 $146,599

Total Liabilities $157,336 $152,853 $148,030

Paid-in Capital $60,000 $60,000 $60,000

Retained Earnings ($750) ($25,278) ($22,895)
Earnings ($24,528) $2,383 $3,928
Total Capital $34,722 $37,105 $41,033
Total Liabilities and Capital $192,058 $189,957 $189,062

Net Worth $34,722 $37,105 $41,033

7.6 Business Ratios

The following table contains important ratios for the Single-family housing construction
industry, as determined by the Standard Industry Classification (SIC) Index Number 1521.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 10.00% 10.00% 7.20%

Percent of Total Assets

Other Current Assets 0.39% 0.39% 0.40% 30.60%
Total Current Assets 26.69% 28.40% 30.60% 80.40%
Long-term Assets 73.31% 71.60% 69.40% 19.60%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 0.66% 0.72% 0.76% 44.20%

Long-term Liabilities 81.26% 79.75% 77.54% 11.50%
Total Liabilities 81.92% 80.47% 78.30% 55.70%
Net Worth 18.08% 19.53% 21.70% 44.30%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 6.67% 90.00% 90.00% 18.10%
Selling, General & Administrative Expenses 120.22% 79.97% 74.97% 7.00%
Advertising Expenses 1.39% 0.00% 0.00% 0.20%
Profit Before Interest and Taxes -64.17% 58.01% 59.96% 3.50%

Main Ratios
Current 40.24 39.60 40.44 1.83
Quick 40.24 39.60 40.44 0.86
Total Debt to Total Assets 81.92% 80.47% 78.30% 55.70%
Pre-tax Return on Net Worth -70.64% 9.17% 13.68% 5.40%
Pre-tax Return on Assets -12.77% 1.79% 2.97% 12.20%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -113.56% 10.03% 15.03% n.a
Return on Equity -70.64% 6.42% 9.57% n.a

Activity Ratios
Accounts Payable Turnover 33.70 12.17 12.17 n.a
Payment Days 27 29 29 n.a
Total Asset Turnover 0.11 0.13 0.14 n.a

Debt Ratios
Debt to Net Worth 4.53 4.12 3.61 n.a
Current Liab. to Liab. 0.01 0.01 0.01 n.a

Liquidity Ratios
Net Working Capital $49,984 $52,595 $56,432 n.a
Interest Coverage -1.30 1.33 1.56 n.a

Additional Ratios
Assets to Sales 8.89 7.99 7.23 n.a
Current Debt/Total Assets 1% 1% 1% n.a
Acid Test 40.24 39.60 40.44 n.a
Sales/Net Worth 0.62 0.64 0.64 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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
Rental Revenue 0% $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400

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
Rental Costs $0 $0 $0 $0 $480 $240 $240 $240 $240 $240 $240 $240
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $480 $240 $240 $240 $240 $240 $240 $240

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 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Long-term Interest Rate 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75% 6.75%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss

Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11
12
Sales $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Direct Cost of Sales $0 $0 $0 $0 $480 $240 $240 $240 $240 $240 $240 $240
Other Production
$3,000 $5,000 $5,000 $5,000 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Total Cost of Sales $3,000 $5,000 $5,000 $5,000 $480 $240 $240 $240 $240 $240 $240 $240

Gross Margin ($3,000) ($5,000) ($5,000) ($5,000) $4,320 $2,160 $2,160 $2,160 $2,160 $2,160 $2,160 $2,160
Gross Margin % 0.00% 0.00% 0.00% 0.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00%

Expenses
Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales and Marketing and
$2,100 $2,100 $2,100 $2,300 $200 $100 $100 $100 $100 $100 $100 $100
Other Expenses
Depreciation $0 $0 $0 $0 $400 $400 $400 $400 $400 $400 $400 $400
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $400 $400 $400 $300 $100 $100 $100 $100 $100 $100 $100 $100
Insurance $300 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $2,800 $2,500 $2,500 $2,600 $700 $600 $600 $600 $600 $600 $600 $600

Profit Before Interest and

($5,800) ($7,500) ($7,500) ($7,600) $3,620 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560
Taxes
EBITDA ($5,800) ($7,500) ($7,500) ($7,600) $4,020 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960 $1,960
Interest Expense $900 $898 $896 $894 $892 $890 $888 $886 $884 $882 $880 $878
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($6,700) ($8,398) ($8,396) ($8,494) $2,728 $670 $672 $674 $676 $678 $680 $682
Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 56.83% 27.91% 28.00% 28.08% 28.17% 28.25% 28.34% 28.42%

Pro Forma Cash Flow

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

Cash from Operations

Cash Sales $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Subtotal Cash from Operations $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400

Additional Cash Received

Sales Tax, VAT, HST/GST
0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)
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 $0 $0 $0 $0 $4,800 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400

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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Bill Payments $223 $6,757 $8,398 $8,399 $8,267 $1,661 $1,330 $1,328 $1,326 $1,324 $1,322 $1,320
Subtotal Spent on Operations $223 $6,757 $8,398 $8,399 $8,267 $1,661 $1,330 $1,328 $1,326 $1,324 $1,322 $1,320

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out
Principal Repayment of Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal
$0 $348 $350 $352 $354 $356 $358 $360 $362 $364 $366 $368
Repayment
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 $223 $7,105 $8,748 $8,751 $8,621 $2,017 $1,688 $1,688 $1,688 $1,688 $1,688 $1,688

Net Cash Flow ($223) ($7,105) ($8,748) ($8,751) ($3,821) $383 $712 $712 $712 $712 $712 $712
Cash Balance $74,277 $67,172 $58,424 $49,673 $45,852 $46,236 $46,948 $47,660 $48,372 $49,084 $49,796 $50,508

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 $74,500 $74,277 $67,172 $58,424 $49,673 $45,852 $46,236 $46,948 $47,660 $48,372 $49,084 $49,796 $50,508
Other Current Assets $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Total Current Assets $75,250 $75,027 $67,922 $59,174 $50,423 $46,602 $46,986 $47,698 $48,410 $49,122 $49,834 $50,546 $51,258

Long-term Assets
Long-term Assets $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000 $144,000
Accumulated Depreciation $0 $0 $0 $0 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200
Total Long-term Assets $144,000 $144,000 $144,000 $144,000 $144,000 $143,600 $143,200 $142,800 $142,400 $142,000 $141,600 $141,200 $140,800
Total Assets $219,250 $219,027 $211,922 $203,174 $194,423 $190,202 $190,186 $190,498 $190,810 $191,122 $191,434 $191,746 $192,058

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 $6,477 $8,118 $8,116 $8,211 $1,616 $1,286 $1,284 $1,282 $1,280 $1,278 $1,276 $1,274
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 $6,477 $8,118 $8,116 $8,211 $1,616 $1,286 $1,284 $1,282 $1,280 $1,278 $1,276 $1,274

Long-term Liabilities $160,000 $160,000 $159,652 $159,302 $158,950 $158,596 $158,240 $157,883 $157,523 $157,161 $156,797 $156,431 $156,062
Total Liabilities $160,000 $166,477 $167,770 $167,418 $167,161 $160,213 $159,526 $159,166 $158,804 $158,440 $158,074 $157,706 $157,336

Paid-in Capital $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000
Retained Earnings ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750) ($750)
Earnings $0 ($6,700) ($15,098) ($23,494) ($31,988) ($29,260) ($28,590) ($27,919) ($27,245) ($26,569) ($25,891) ($25,211) ($24,528)
Total Capital $59,250 $52,550 $44,152 $35,756 $27,262 $29,990 $30,660 $31,331 $32,005 $32,681 $33,359 $34,039 $34,722
Total Liabilities and Capital $219,250 $219,027 $211,922 $203,174 $194,423 $190,202 $190,186 $190,498 $190,810 $191,122 $191,434 $191,746 $192,058

Net Worth $59,250 $52,550 $44,152 $35,756 $27,262 $29,990 $30,660 $31,331 $32,005 $32,681 $33,359 $34,039 $34,722

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