September 2001

This sample plan was created for a hypothetical investment

company that buys other companies as investments. The focus of
this sample plan is to show the financials for this type of company.
Brief descriptions can be found in the topics associated with key
tables.

This sample business plan has been made available to users of Business Plan Pro, business
planning software published by Palo Alto Software. Names, locations and numbers may have
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Copyright Palo Alto Software, Inc., 1995-2002

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by _______________ in

this business plan is confidential; therefore, reader agrees not to disclose it without the
express written permission of _______________.
It is acknowledged by reader that information to be furnished in this business plan is in all
respects confidential in nature, other than information which is in the public domain through
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Upon request, this document is to be immediately returned to _______________.
___________________
Signature
___________________
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___________________
Date
This is a business plan. It does not imply an offering of securities.

Table of Contents
1.0

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0

Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

5.0

Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5.5.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

6.0

Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.4
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

7.0

Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.7
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.8
Long-term Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
6
6
8
10
10
12

Investment Company
1.0 Executive Summary
This sample plan was created for a hypothetical investment company that buys other
companies as investments. In this sample, the hypothetical Venture Capital firm starts with
$20M as an initial investment fund. In its early months of existence, it invests $5 million each
in four companies. It receives a management fee of two percent (2%) of the fund value, paid
quarterly. It pays salaries to its partners and other employees, and office expenses, from the
management fee.
The investments show up in the Cash Flow table as the purchase of long-term assets, which
also puts them into the balance sheet as long-term assets. You can see them in this sample
plan, in the first few months.
In the third year, one of the target companies fails, so $5 million is written off as failure. You'll
see how that looks as a $5 million sale of long-term assets in the cash flow, and a balancing
entry of $5 million in
costs of sales in the profit and loss, making for a loss and write-off that year. The result is a
tax loss, and the balance of investments goes to $15 Million.
In the fifth year, one of the target companies is transacted at $50 million. You'll see in the
sample how that shows up as a $45 million equity appreciation in the sales forecast, plus a $5
million sale of long-term assets in the cash flow. At that point there's been a $45 million profit,
and the balance of long-term assets goes down to $10 million.
This is a simplified example. The business model holds long-term assets and waits for them to
appreciate. It doesn't show appreciation of assets until they are finally sold, and it doesn't
show write-down of assets until they fail. Sales and cost of sales are the appreciation and
write-down of assets, plus the management fees.
The explanation above has been broken down and copied into key topics in the outline that are
linked to corresponding tables. These topics are:

2.2
5.5.1
6.4
7.4
7.5
7.6

Start-up Summary
Sales Forecast
Personnel
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet

Page 1

Investment Company
2.0 Company Summary

2.2 Start-up Summary

This hypothetical VC firm starts with $20M as an initial investment fund. The venture capital
partners invest $100,000 as working capital needed to balance the cash flow from quarter to
quarter.

Start-up

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$0
Expenses

Assets

Investment

Loans

Page 2

Investment Company
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Insurance
Rent
Research and Development
Expensed Equipment
Other
Total Start-up Expense

$0
$0
$0
$0
$0
$0
$0
$0
$0
$0

Start-up Assets Needed

Cash Balance on Starting Date
Other Short-term Assets
Total Short-term Assets

$20,100,000
$0
$20,100,000

Long-term Assets
Total Assets
Total Requirements

$0
$20,100,000
$20,100,000

Funding
Investment
Investor 1
Investor 2
Other
Total Investment

$20,000,000
$100,000
$0
$20,100,000

Short-term Liabilities
Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities

$0
$0
$0
$0

Long-term Liabilities
Total Liabilities

$0
$0

Loss at Start-up
Total Capital
Total Capital and Liabilities

$0
$20,100,000
$20,100,000

Page 3

Investment Company
5.0 Strategy and Implementation Summary

5.5.1 Sales Forecast

The company invests $5 million each in four companies. A two percent (2%) management fee
is paid quarterly. One of the $5 million investments is sold for $50 million in the last year. That
sale enters the accounting as a sale of $5 million worth of stock plus a gain of $45 million. The
sales forecast shows the gain of $45 million.
Table: Sales Forecast (Planned)
Sales Forecast
Sales
Management Fees
Equity appreciation
Total Sales
Direct Cost of Sales
Management Fees
Equity appreciation
Subtotal Direct Cost of Sales

2002
$400,000
$0
$400,000

2003
$400,000
$0
$400,000

2004
$400,000
$0
$400,000

2005
$400,000
$0
$400,000

2006
$400,000
$45,000,000
$45,400,000

2002
$0
$0
$0

2003
$0
$0
$0

2004
$0
$0
$0

2005
$0
$0
$0

2006
$0
$0
$0

Sales Monthly (Planned)

$100,000
$90,000
$80,000
$70,000
$60,000
$50,000

Management Fees

$40,000

Equity appreciation

$30,000
$20,000
$10,000
$0
Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Jul Aug

Page 4

Investment Company

Sales by Year (Planned)

$50,000,000
$45,000,000
$40,000,000
$35,000,000
$30,000,000
$25,000,000

Management Fees

$20,000,000

Equity appreciation

$15,000,000
$10,000,000
$5,000,000
$0
2002

2003

2004

2005

2006

6.0 Management Summary

6.4 Personnel Plan

This hypothetical company pays salaries to its partners and other employees, and office
expenses, from the management fee of two percent (2%)
Table: Personnel (Planned)
Personnel Plan
Partners
Other
Total Payroll

2002
$240,000
$60,000
$300,000

2003
$252,000
$63,000
$315,000

2004
$265,000
$66,000
$331,000

2005
$278,000
$69,000
$347,000

2006
$292,000
$72,000
$364,000

Total People
Payroll Burden
Total Payroll Expenditures

4
$45,000
$345,000

4
$47,250
$362,250

4
$49,650
$380,650

4
$52,050
$399,050

4
$54,600
$418,600

Page 5

Investment Company
7.0 Financial Plan

7.1 Important Assumptions

Table: General Assumptions
General Assumptions
Short-term Interest Rate %
Long-term Interest Rate %
Tax Rate %
Expenses in Cash %
Personnel Burden %

2002
10.00%
10.00%
20.00%
10.00%
15.00%

2003
10.00%
10.00%
20.00%
10.00%
15.00%

2004
10.00%
10.00%
20.00%
10.00%
15.00%

2005
10.00%
10.00%
20.00%
10.00%
15.00%

2006
10.00%
10.00%
20.00%
10.00%
15.00%

7.4 Projected Profit and Loss

Please note that in the third year one investment is written off as a failure, producing a $5
million cost which ends up showing a loss for the year of nearly $5 million. The sale of equity
at the end of the period enters the sales forecast and the profit and loss statement as a $45
million gain.
You will also note that there may be gains or losses in the value of the assets held as equity
investments, but these gains or losses don't enter the accounting until there is a transaction.
The accounting treatment is identical to what an individual investor does with stocks: changes
in the market price of a share of stock are irrelevant until that share is actually sold to
somebody else, or, if the company ceases to exist, that stock is written off as having no value.

Page 6

Investment Company
Table: Profit and Loss (Planned)
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Investment write-off
Total Cost of Sales
Gross Margin
Gross Margin %
Operating Expenses:
Advertising/Promotion
Travel
Payroll Expense
Payroll Burden
Depreciation
Leased Equipment
Utilities
Insurance
Rent
All other
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense Short-term
Interest Expense Long-term
Taxes Incurred
Extraordinary Items
Net Profit
Net Profit/Sales

2002
$400,000
$0
$0
-----------$0
$400,000
100.00%

2003
$400,000
$0
$0
-----------$0
$400,000
100.00%

2004
$400,000
$0
$5,000,000
-----------$5,000,000
($4,600,000)
-1150.00%

2005
$400,000
$0
$0
-----------$0
$400,000
100.00%

2006
$45,400,000
$0
$0
-----------$0
$45,400,000
100.00%

$1,200
$6,000
$300,000
$45,000
$0
$2,400
$1,200
$2,400
$36,000
$6,000
-----------$400,200
($200)
$0
$0
$0
$0
($200)
-0.05%

$1,300
$6,300
$315,000
$47,250
$0
$2,500
$1,300
$2,500
$37,800
$6,300
-----------$420,250
($20,250)
$0
$0
$0
$0
($20,250)
-5.06%

$1,400
$6,600
$331,000
$49,650
$0
$2,600
$1,400
$2,600
$39,700
$6,600
-----------$441,550
($5,041,550)
$0
$0
$0
$0
($5,041,550)
-1260.39%

$1,500
$6,900
$347,000
$52,050
$0
$2,700
$1,500
$2,700
$41,700
$6,900
-----------$462,950
($62,950)
$0
$0
$0
$0
($62,950)
-15.74%

$1,600
$7,200
$364,000
$54,600
$0
$2,800
$1,600
$2,800
$43,800
$7,200
-----------$485,600
$44,914,400
$0
$0
$8,982,880
$0
$35,931,520
79.14%

Profit Monthly (Planned)

$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Jul Aug

Page 7

Investment Company

Profit Yearly (Planned)

$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
($5,000,000)
($10,000,000)
2002

2003

2004

2005

2006

7.5 Projected Cash Flow

The Cash Flow shows four $5 million investments made in the first few months of the plan.
In the third year, one of the target companies fails, so $5 million is written off as failure. You'll
see that shows as a $5 million sale of long-term assets in the cash flow, and a balancing entry
of $5 million in costs of sales in the profit and loss, making for a loss and write-off that year.
The result is a tax loss, and the balance of investments goes to $15 Million.
In the fifth year, another investment is transacted at $50 million. This shows up as a $5 million
equity appreciation in the Sales Forecast, plus a $5 million sale of long-term assets in the Cash
Flow. At that point there's been a $45 million profit and the balance of long-term assets goes
down to $10 million.
The partners invest an additional $100,000 in the fourth year as additional working capital to
balance the cash flow of the company.
_______________________________
IMPORTANT: The Cash Flow table may not show correctly if opened using an earlier version of
Business Plan Pro. Please be sure you have the latest version (BPP 2002, Revision 1c or
higher), by checking Help > About Business Plan Pro.
If you have an earlier version than 1c, please use the Tools > Update Product menu to
download the latest version.

Page 8

Investment Company
Table: Cash Flow (Planned)
Pro Forma Cash Flow

2002

2003

2004

2005

2006

Cash Received
Cash from Operations:
Cash Sales
From Receivables
Subtotal Cash from Operations

$400,000
$0
$400,000

$400,000
$0
$400,000

$400,000
$0
$400,000

$400,000
$0
$400,000

$45,400,000
$0
$45,400,000

Additional Cash Received

Extraordinary Items
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of other Short-term Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$0
$0
$0
$0
$0
$0
$0
$400,000

$0
$0
$0
$0
$0
$0
$0
$0
$400,000

$0
$0
$0
$0
$0
$0
$5,000,000
$0
$5,400,000

$0
$0
$0
$0
$0
$0
$0
$100,000
$500,000

$0
$0
$0
$0
$0
$0
$5,000,000
$0
$50,400,000

2002

2003

2004

2005

2006

$5,520
$345,000
$45,678
$396,198

$5,800
$362,250
$51,997
$420,047

$5,000,000
$380,650
$60,199
$5,440,849

$6,390
$399,050
$57,783
$463,223

$904,988
$418,600
$7,493,408
$8,816,996

$0
$0
$0
$0
$0
$20,000,000
$0
$0
$20,396,198

$0
$0
$0
$0
$0
$0
$0
$0
$420,047

$0
$0
$0
$0
$0
$0
$0
$0
$5,440,849

$0
$0
$0
$0
$0
$0
$0
$0
$463,223

$0
$0
$0
$0
$0
$0
$0
$0
$8,816,996

($19,996,198)
$103,802

($20,047)
$83,755

($40,849)
$42,906

$36,777
$79,683

$41,583,004
$41,662,686

Expenditures
Expenditures from Operations:
Cash Spent on Costs and Expenses
Wages, Salaries, Payroll Taxes, etc.
Payment of Accounts Payable
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 Short-term Assets
Purchase Long-term Assets
Dividends
Adjustment for Assets Purchased on Credit
Subtotal Cash Spent
Net Cash Flow
Cash Balance

Cash (Planned)
$20,000,000
$15,000,000
$10,000,000

Cash Flow

$5,000,000

Cash Balance
$0
($5,000,000)
($10,000,000)
Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Jul Aug

Page 9

Investment Company
7.6 Projected Balance Sheet
You can see in the balance sheet how the ending balances for long-term assets were not revalued. They remain at the original purchase price until they are sold, or written off as a
complete loss. There is a $5 million write-off in the third year, and a sale of $5 million worth of
assets in the last year. That sale of $5 million in assets produces the $5 million sale at book
value plus the $45 million gain in the sales forecast and profit and loss table.
Table: Balance Sheet (Planned)
Pro Forma Balance Sheet
Assets
Short-term Assets
Cash
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

2002
$103,802
$0
$103,802

2003
$83,755
$0
$83,755

2004
$42,906
$0
$42,906

2005
$79,683
$0
$79,683

2006
$41,662,686
$0
$41,662,686

$20,000,000
$0
$20,000,000
$20,103,802

$20,000,000
$0
$20,000,000
$20,083,755

$15,000,000
$0
$15,000,000
$15,042,906

$15,000,000
$0
$15,000,000
$15,079,683

$10,000,000
$0
$10,000,000
$51,662,686

Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities

2002
$4,002
$0
$0
$4,002

2003
$4,205
$0
$0
$4,205

2004
$4,906
$0
$0
$4,906

2005
$4,633
$0
$0
$4,633

2006
$656,116
$0
$0
$656,116

Long-term Liabilities
Total Liabilities

$0
$4,002

$0
$4,205

$0
$4,906

$0
$4,633

$0
$656,116

$20,100,000
$0
($200)
$20,099,800
$20,103,802
$20,099,800

$20,100,000
($200)
($20,250)
$20,079,550
$20,083,755
$20,079,550

$20,100,000
($20,450)
($5,041,550)
$15,038,000
$15,042,906
$15,038,000

$20,200,000
($5,062,000)
($62,950)
$15,075,050
$15,079,683
$15,075,050

$20,200,000
($5,124,950)
$35,931,520
$51,006,570
$51,662,686
$51,006,570

Liabilities and Capital

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

7.7 Business Ratios

The Standard Industry Code (SIC) for this type of business is 7389, Business Services. The
Industry Data is provided in the final column of the Ratios table.

Page 10

Investment Company
Table: Ratios (Planned)
Ratio Analysis
Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Total Assets
Other Short-term Liabilities
Subtotal Short-term Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Business Vitality Profile
Sales per Employee
Survival Rate
Additional Ratios
Net Profit Margin
Return on Equity
Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Short-term Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

2001
0.00%

2002
0.00%

2003
0.00%

2004
0.00%

2005
11250.00%

Industry Profile
8.20%

0.00%
0.00%
0.00%
0.52%
99.48%
100.00%

0.00%
0.00%
0.00%
0.42%
99.58%
100.00%

0.00%
0.00%
0.00%
0.29%
99.71%
100.00%

0.00%
0.00%
0.00%
0.53%
99.47%
100.00%

0.00%
0.00%
0.00%
80.64%
19.36%
100.00%

26.30%
3.80%
44.20%
74.30%
25.70%
100.00%

0.00%
0.02%
0.00%
0.02%
99.98%

0.00%
0.02%
0.00%
0.02%
99.98%

0.00%
0.03%
0.00%
0.03%
99.97%

0.00%
0.03%
0.00%
0.03%
99.97%

0.00%
1.27%
0.00%
1.27%
98.73%

49.00%
38.30%
13.80%
101.10%
-1.10%

100.00%
100.00%
100.05%
0.30%
-0.05%

100.00%
100.00%
105.06%
0.33%
-5.06%

100.00%
-1150.00%
110.39%
0.35%
-1260.39%

100.00%
100.00%
115.74%
0.38%
-15.74%

100.00%
100.00%
20.86%
0.00%
98.93%

100.00%
0.00%
81.40%
1.70%
2.10%

25.94
25.94
0.02%
0.00%
0.00%

19.92
19.92
0.02%
-0.10%
-0.10%

8.75
8.75
0.03%
-33.53%
-33.51%

17.20
17.20
0.03%
-0.42%
-0.42%

63.50
63.50
1.27%
88.06%
86.94%

1.49
1.17
62.80%
4.20%
11.30%

2001
$100,000

2002
$100,000

2003
$100,000

2004
$100,000

2005
$11,350,000

Industry
$0
0.00%

2001
-0.05%
0.00%

2002
-5.06%
-0.10%

2003
-1260.39%
-33.53%

2004
-15.74%
-0.42%

2005
79.14%
70.44%

n.a
n.a

0.00
0
0.00
12.41
0.02

0.00
0
0.00
12.41
0.02

0.00
0
0.00
12.41
0.03

0.00
0
0.00
12.41
0.03

0.00
0
0.00
12.41
0.88

n.a
n.a
n.a
n.a
n.a

0.00
1.00

0.00
1.00

0.00
1.00

0.00
1.00

0.01
1.00

n.a
n.a

$99,800
0.00

$79,550
0.00

$38,000
0.00

$75,050
0.00

$41,006,570
0.00

n.a
n.a

50.26
0%
25.94
0.02
$0

50.21
0%
19.92
0.02
0.00

37.61
0%
8.75
0.03
0.00

37.70
0%
17.20
0.03
0.00

1.14
1%
63.50
0.89
0.00

n.a
n.a
n.a
n.a
n.a

Page 11

Investment Company
7.8 Long-term Plan
Table: Long-term
Long-term
Sales

2002
$400,000

2003
$400,000

2004
$400,000

2005
$400,000

Cost of Sales
Gross Margin

$0
$400,000

$0
$400,000

$0
$400,000

Gross Margin %
Operating Expenses
Operating Income

100.00%
$400,200
($200)

100.00%
$420,250
($20,250)

($200)

($20,250)

Short-term Assets

$103,802

$83,755

$5,000,000
($4,600,00
0)
-1150.00%
$441,550
($5,041,55
0)
($5,041,55
0)
$42,906

Long-term Assets

$20,000,00
0
$4,002
$0
$20,099,80
0

$20,000,00
0
$4,205
$0
$20,079,55
0

$15,000,00
0
$4,906
$0
$15,038,00
0

Net Income

Short-term Liabilities
Long-term Liabilities
Equity

100.00%
$462,950
($62,950)
($62,950)
$79,683
$15,000,00
0
$4,633
$0
$15,075,05
0

2006
$45,400,00
0
$0
$45,400,00
0
100.00%
$485,600
$44,914,40
0
$35,931,52
0
$41,662,68
6
$10,000,00
0
$656,116
$0
$51,006,57
0

2007
$0

2008
$0

2009
$0

2010
$0

2011
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

0.00%
$0
$0

0.00%
$0
$0

0.00%
$0
$0

0.00%
$0
$0

0.00%
$0
$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

Page 12

Appendix
Appendix Table: Sales Forecast (Planned)
Sales Forecast
Sales
Management Fees
Equity appreciation
Total Sales
Direct Cost of Sales
Management Fees
Equity appreciation
Subtotal Direct Cost of Sales

$0

Sep
$0
$0
$0

Oct
$0
$0
$0

Nov
$100,000
$0
$100,000

Dec
$0
$0
$0

Jan
$0
$0
$0

Feb
$100,000
$0
$100,000

Mar
$0
$0
$0

Apr
$0
$0
$0

May
$100,000
$0
$100,000

Jun
$0
$0
$0

Jul
$0
$0
$0

Aug
$100,000
$0
$100,000

Sep
$0
$0
$0

Oct
$0
$0
$0

Nov
$0
$0
$0

Dec
$0
$0
$0

Jan
$0
$0
$0

Feb
$0
$0
$0

Mar
$0
$0
$0

Apr
$0
$0
$0

May
$0
$0
$0

Jun
$0
$0
$0

Jul
$0
$0
$0

Aug
$0
$0
$0

Page 1

Appendix
Appendix Table: Personnel (Planned)
Personnel Plan
Partners
Other
Total Payroll

Sep
$20,000
$5,000
$25,000

Oct
$20,000
$5,000
$25,000

Nov
$20,000
$5,000
$25,000

Dec
$20,000
$5,000
$25,000

Jan
$20,000
$5,000
$25,000

Feb
$20,000
$5,000
$25,000

Mar
$20,000
$5,000
$25,000

Apr
$20,000
$5,000
$25,000

May
$20,000
$5,000
$25,000

Jun
$20,000
$5,000
$25,000

Jul
$20,000
$5,000
$25,000

Aug
$20,000
$5,000
$25,000

Total People
Payroll Burden
Total Payroll Expenditures

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

4
$3,750
$28,750

Page 2

Appendix
Appendix Table: General Assumptions
General Assumptions
Short-term Interest Rate %
Long-term Interest Rate %
Tax Rate %
Expenses in Cash %
Personnel Burden %

Sep
10.00%
10.00%
20.00%
10.00%
15.00%

Oct
10.00%
10.00%
20.00%
10.00%
15.00%

Nov
10.00%
10.00%
20.00%
10.00%
15.00%

Dec
10.00%
10.00%
20.00%
10.00%
15.00%

Jan
10.00%
10.00%
20.00%
10.00%
15.00%

Feb
10.00%
10.00%
20.00%
10.00%
15.00%

Mar
10.00%
10.00%
20.00%
10.00%
15.00%

Apr
10.00%
10.00%
20.00%
10.00%
15.00%

May
10.00%
10.00%
20.00%
10.00%
15.00%

Jun
10.00%
10.00%
20.00%
10.00%
15.00%

Jul
10.00%
10.00%
20.00%
10.00%
15.00%

Aug
10.00%
10.00%
20.00%
10.00%
15.00%

Page 3

Appendix
Appendix Table: Profit and Loss (Planned)
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Investment write-off
Total Cost of Sales
Gross Margin
Gross Margin %
Operating Expenses:
Advertising/Promotion
Travel
Payroll Expense
Payroll Burden
Depreciation
Leased Equipment
Utilities
Insurance
Rent
All other
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense Short-term
Interest Expense Long-term
Taxes Incurred
Extraordinary Items
Net Profit
Net Profit/Sales

Sep
$0
$0
$0
-----------$0
$0
0.00%

Oct
$0
$0
$0
-----------$0
$0
0.00%

Nov
$100,000
$0
$0
-----------$0
$100,000
100.00%

Dec
$0
$0
$0
-----------$0
$0
0.00%

Jan
$0
$0
$0
-----------$0
$0
0.00%

Feb
$100,000
$0
$0
-----------$0
$100,000
100.00%

Mar
$0
$0
$0
-----------$0
$0
0.00%

Apr
$0
$0
$0
-----------$0
$0
0.00%

May
$100,000
$0
$0
-----------$0
$100,000
100.00%

Jun
$0
$0
$0
-----------$0
$0
0.00%

Jul
$0
$0
$0
-----------$0
$0
0.00%

Aug
$100,000
$0
$0
-----------$0
$100,000
100.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
$66,650
$0
$0
$0
$0
$66,650
66.65%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
$66,650
$0
$0
$0
$0
$66,650
66.65%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
$66,650
$0
$0
$0
$0
$66,650
66.65%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
($33,350)
$0
$0
$0
$0
($33,350)
0.00%

$100
$500
$25,000
$3,750
$0
$200
$100
$200
$3,000
$500
-----------$33,350
$66,650
$0
$0
$0
$0
$66,650
66.65%

Page 4

Appendix
Appendix Table: Cash Flow (Planned)
Pro Forma Cash Flow
Cash Received
Cash from Operations:
Cash Sales
From Receivables
Subtotal Cash from Operations
Additional Cash Received
Extraordinary Items
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of other Short-term Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations:
Cash Spent on Costs and Expenses
Wages, Salaries, Payroll Taxes, etc.
Payment of Accounts Payable
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 Short-term Assets
Purchase Long-term Assets
Dividends
Adjustment for Assets Purchased on Credit
Subtotal Cash Spent
Net Cash Flow
Cash Balance

0.00%

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

$0
$0
$0

$0
$0
$0

$100,000
$0
$100,000

$0
$0
$0

$0
$0
$0

$100,000
$0
$100,000

$0
$0
$0

$0
$0
$0

$100,000
$0
$100,000

$0
$0
$0

$0
$0
$0

$100,000
$0
$100,000

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$100,000

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$100,000

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$100,000

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$0

$0
$0
$0
$0
$0
$0
$0
$0
$100,000

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

$460
$28,750
$138
$29,348

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$460
$28,750
$4,140
$33,350

$0
$0
$0
$0
$0
$5,000,000
$0
$0
$5,029,348

$0
$0
$0
$0
$0
$5,000,000
$0
$0
$5,033,350

$0
$0
$0
$0
$0
$5,000,000
$0
$0
$5,033,350

$0
$0
$0
$0
$0
$5,000,000
$0
$0
$5,033,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

$0
$0
$0
$0
$0
$0
$0
$0
$33,350

($5,029,348)
$15,070,652

($5,033,350)
$10,037,302

($4,933,350)
$5,103,952

($5,033,350)
$70,602

($33,350)
$37,252

$66,650
$103,902

($33,350)
$70,552

($33,350)
$37,202

$66,650
$103,852

($33,350)
$70,502

($33,350)
$37,152

$66,650
$103,802

Page 5

Appendix
Appendix Table: Balance Sheet (Planned)
Pro Forma Balance Sheet
Assets
Short-term Assets
Cash
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

Starting Balances
$20,100,000
$0
$20,100,000

Sep
$15,070,652
$0
$15,070,652

Oct
$10,037,302
$0
$10,037,302

Nov
$5,103,952
$0
$5,103,952

Dec
$70,602
$0
$70,602

Jan
$37,252
$0
$37,252

Feb
$103,902
$0
$103,902

Mar
$70,552
$0
$70,552

Apr
$37,202
$0
$37,202

May
$103,852
$0
$103,852

Jun
$70,502
$0
$70,502

Jul
$37,152
$0
$37,152

Aug
$103,802
$0
$103,802

$0
$0
$0
$20,100,000

$5,000,000
$0
$5,000,000
$20,070,652

$10,000,000
$0
$10,000,000
$20,037,302

$15,000,000
$0
$15,000,000
$20,103,952

$20,000,000
$0
$20,000,000
$20,070,602

$20,000,000
$0
$20,000,000
$20,037,252

$20,000,000
$0
$20,000,000
$20,103,902

$20,000,000
$0
$20,000,000
$20,070,552

$20,000,000
$0
$20,000,000
$20,037,202

$20,000,000
$0
$20,000,000
$20,103,852

$20,000,000
$0
$20,000,000
$20,070,502

$20,000,000
$0
$20,000,000
$20,037,152

$20,000,000
$0
$20,000,000
$20,103,802

Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities

$0
$0
$0
$0

Sep
$4,002
$0
$0
$4,002

Oct
$4,002
$0
$0
$4,002

Nov
$4,002
$0
$0
$4,002

Dec
$4,002
$0
$0
$4,002

Jan
$4,002
$0
$0
$4,002

Feb
$4,002
$0
$0
$4,002

Mar
$4,002
$0
$0
$4,002

Apr
$4,002
$0
$0
$4,002

May
$4,002
$0
$0
$4,002

Jun
$4,002
$0
$0
$4,002

Jul
$4,002
$0
$0
$4,002

Aug
$4,002
$0
$0
$4,002

Long-term Liabilities
Total Liabilities

$0
$0

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$0
$4,002

$20,100,000
$0
$0
$20,100,000
$20,100,000
$20,100,000

$20,100,000
$0
($33,350)
$20,066,650
$20,070,652
$20,066,650

$20,100,000
$0
($66,700)
$20,033,300
$20,037,302
$20,033,300

$20,100,000
$0
($50)
$20,099,950
$20,103,952
$20,099,950

$20,100,000
$0
($33,400)
$20,066,600
$20,070,602
$20,066,600

$20,100,000
$0
($66,750)
$20,033,250
$20,037,252
$20,033,250

$20,100,000
$0
($100)
$20,099,900
$20,103,902
$20,099,900

$20,100,000
$0
($33,450)
$20,066,550
$20,070,552
$20,066,550

$20,100,000
$0
($66,800)
$20,033,200
$20,037,202
$20,033,200

$20,100,000
$0
($150)
$20,099,850
$20,103,852
$20,099,850

$20,100,000
$0
($33,500)
$20,066,500
$20,070,502
$20,066,500

$20,100,000
$0
($66,850)
$20,033,150
$20,037,152
$20,033,150

$20,100,000
$0
($200)
$20,099,800
$20,103,802
$20,099,800

Liabilities and Capital

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 6

Appendix
Appendix Table: Long-term
Long-term
Sales
Cost of Sales
Gross Margin
Gross Margin %
Operating Expenses
Operating Income
Net Income
Short-term Assets
Long-term Assets
Short-term Liabilities
Long-term Liabilities
Equity

2002
$400,000
$0
$400,000
100.00%
$400,200
($200)
($200)
$103,802
$20,000,000
$4,002
$0
$20,099,800

2003
$400,000
$0
$400,000
100.00%
$420,250
($20,250)
($20,250)
$83,755
$20,000,000
$4,205
$0
$20,079,550

2004
$400,000
$5,000,000
($4,600,000)
-1150.00%
$441,550
($5,041,550)
($5,041,550)
$42,906
$15,000,000
$4,906
$0
$15,038,000

2005
$400,000
$0
$400,000
100.00%
$462,950
($62,950)
($62,950)
$79,683
$15,000,000
$4,633
$0
$15,075,050

2006
$45,400,000
$0
$45,400,000
100.00%
$485,600
$44,914,400
$35,931,520
$41,662,686
$10,000,000
$656,116
$0
$51,006,570

2007
$0
$0
$0
0.00%
$0
$0
$0
$0
$0
$0
$0
$0

2008
$0
$0
$0
0.00%
$0
$0
$0
$0
$0
$0
$0
$0

2009
$0
$0
$0
0.00%
$0
$0
$0
$0
$0
$0
$0
$0

2010
$0
$0
$0
0.00%
$0
$0
$0
$0
$0
$0
$0
$0

2011
$0
$0
$0
0.00%
$0
$0
$0
$0
$0
$0
$0
$0

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