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3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Introduction
It is the mission of Marrowstone Advertising Consultants to provide comprehensive marketing
consultation and creation of advertising campaigns for the nonprofit industry. It is our long-
term goal to become THE preferred advertising agency for nonprofit institutions nationwide.
Our firm is not interested in simply producing a service for our clients. We believe in creating a
long-term relationship with them so that the delivery of their message becomes a seemless,
thought-provoking experience that engenders action.
The Company
Marrowstone Advertising Consultants will be a limited liability partnership registered in the
state of Delaware for tax purposes. Its founder is Mr. Curtiss Cole, a former marketing
executive with the Boy Scouts of America. Mr. Cole has brought together a highly respected
group of marketing, development, and graphic art specialists who, combined, have a total of
35 years of experience with nonprofit organizations.
The company has a limited number of private investors and does not plan to go public. The
company has its main offices in Reston, Virginia. The facilities include a design lab, conference
rooms and office spaces. The company expects to begin offering its services in January of
2003.
The Services
The firm offers a complete, custom advertising campaign that covers all audio-visual and
printed media. Examples include radio and television ads, billboards, building advertisements,
brochures, direct mailing, business cards, etc. Management has designed a proven and
effective seven step process to building a winning campaign.
The company's main clients will be small and start-up nonprofit institutions and local
governments. By focusing on institutions such as these that have special needs, we believe we
will be able to better serve our clients and produce a superior service that is more effective
that other advertising firms.
The Market
Marrowstone Advertising Consultants will be concentrating on three main types of nonprofits
who operate in the environmental, youth development, and cultural awareness fields. This is
because these types of organizations have the greatest needs and/or are the best capitalized
in the nonprofit industry.
Profitability and growth in this untapped market is expected to be strong, as evidenced by the
fact that over the past 15 years the U.S. has seen an explosion of nonprofits in new fields such
as environmental awareness. Furthermore with the greater capitalization of such agencies, we
are seeing a widening gap between these organizations needs and what conventional
advertising companies can provide.
Financial Considerations
Start-up assets required are $122,300. This includes $31,700 in expenses and the rest in cash
needed to support operations until revenues reach an acceptable level. Most of the company's
liabilities will come from outside private investors and management investment, however, we
have obtained $16,000 in current borrowing from Bank of America Commercial Investments,
the principal to be paid off in two years. A long-term loan of $45,000 through Charter Bank of
Richmond will be paid off in ten years.
The company expects to reach profitability in year 2 and does not anticipate any serious cash
flow problems. We conservatively believe that during the first three years, average profitability
per month per segment will be about $8,000. We expect that about three projects per month
will guarantee a break-even point.
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Marrowstone Advertising Consultants
Highlights
$500,000
$400,000
$300,000
Sales
$200,000 Gross Margin
Net Profit
$100,000
$0
($100,000)
2003 2004 2005
1.1 Objectives
The three year goals for Marrowstone Advertising are the following:
1.2 Mission
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Marrowstone Advertising Consultants
Differentiate our services to nonprofits so that our clients realize that we are able to
better serve their needs than a more generic competitor.
Keeping close contact with clients and establishing a well functioning long-term
relationship with them to generate repeat business and a top notch reputation.
Establish a comprehensive service experience for our clients that includes consultation,
analysis of nonprofit's goals and target markets. Creation of streamlined and custom
advertising campaigns based on needs, total design work of all audio-visual advertising
tools, implementation, and follow-up analysis.
The company has a limited number of private investors and does not plan to go public. The
company has its main offices in Reston, Virginia. The facilities include a design lab, conference
rooms and office spaces. The company expects to begin offering its services in January of
2003.
The company's main clients will be small and start-up nonprofit institutions and local
governments. By focusing on institutions such as these that have special needs, we believe we
will be able to better serve our clients and produce a superior service that is more effective
that other advertising firms.
The company will have a number of outside private investors who will own 27% of the
company's shares. The rest will be owned by the senior management including Mr. Curtis Cole,
(25%), Ms. Jennie Marks (20%), Mr. David Danielson, (20%), and Mr. Milo Winn (8%). All
other financing will come from loans.
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Marrowstone Advertising Consultants
Start-up assets required are $122,300. This includes $31,700 in expenses and the rest in cash
needed to support operations until revenues reach an acceptable level. Most of the company's
liabilities will come from outside private investors and management investment, however, we
have obtained $16,000 in current borrowing from Bank of America Commercial Investments,
the principal to be paid off in two years. A long-term loan of $45,000 through Charter Bank of
Richmond will be paid off in ten years.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $2,000
Insurance $1,000
Utilities $200
Rent $2,000
Accounting and bookkeeping fees $2,000
Expensed equipment $10,000
Advertising $6,500
Other $8,000
Total Start-up Expenses $31,700
Funding
Investment
Mr. Curtis Cole $25,000
Ms. Jennie Marks $20,000
Mr. David Danielson $20,000
Mr. Milo Winn $8,000
Others $27,000
Total Investment $100,000
Current Liabilities
Accounts Payable $3,000
Current Borrowing $16,000
Other Current Liabilities $0
Current Liabilities $19,000
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Marrowstone Advertising Consultants
Start-up
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses Assets Investment Loans
3.0 Services
Initial consultation.
Analysis of nonprofit's goals and target market demographics.
Planning.
Creation of streamlined and custom advertising campaigns based on needs.
Total design work of all audio-visual/printed advertising tools.
Implementation (usually through subcontractors).
Follow-up analysis.
Each project is customized to our client and its scope, length, depth, reach, and cost are
unique.
Profitability and growth in this little tapped market is expected to be strong, as evidenced by
the fact that over the past 15 years the U.S. has seen an explosion of nonprofits in new fields
such as environmental awareness. Furthermore with the greater capitalization of such
agencies, we are seeing a widening gap between these organizations needs and what
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Marrowstone Advertising Consultants
conventional advertising companies can provide.
An analysis of the market using the five forces of profitability indicates that there will be a
short time where growth of market share and profitability will be extremely high while demand
outstrips supply. As new entrants move into the market this opportunity will disappear. This is
the time for Marrowstone to create its reputation and niche in the industry.
There are various nonprofit institutions nationwide that concentrate on various public issues.
Marrowstone will be focusing on the following groups of clients:
We are concentrating on these specific market segments for a variety of reasons. The
environmental segment which includes organizations such as the Sierra Club and the Nature
Conservancy is the fastest growing segment at the moment, and Marrowstone's management
concludes that in the near future, they will also include some of the largest nonprofits in the
nation. Youth development nonprofits such as the Boy Scouts, Camp Fire girls, 4-F, and The
Boys and Girls Club includes some of the largest and most well capitalized nonprofit
organizations in the country. Finally, although they tend to be small in size, there are a huge
number of cultural nonprofits such as museums.
The market analysis table and graph which follows shows the number of each type of
organization in the greater Washington D.C. area. This will be our initial geographical focus for
the first three to four years of our company's existance. Later, as we expand to a nationwide
scope, our future business plans will include all our potential clients across the country.
Environmental nonprofits
Youth development nonprofits
Cultural nonprofits
Other
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Marrowstone Advertising Consultants
Market Analysis
Potential Customers Growth 2003 2004 2005 2006 2007 CAGR
Environmental nonprofits 8% 34 37 40 43 46 7.85%
Youth development 4% 44 46 48 50 52 4.26%
nonprofits
Cultural nonprofits 4% 128 133 138 144 150 4.04%
Other 5% 72 76 80 84 88 5.14%
Total 4.85% 278 292 306 321 336 4.85%
The advertising industry for nonprofits is at the moment, an unfulfilled market with demand
greater than supply. Many nonprofit organizations have found that only the largest and most
expensive advertising agencies will enter into contracts with nonprofits and this leaves a great
void which must be filled by in-house advertising.
Marrowstone believes that the greatest threat at the moment is in new entrants to the market
who will also perceive this opportunity. The most likely entrants will be pre-existing advertising
agencies wishing to horizontally integrate and enter new sub-markets. However, the one
major disadvantage to new entrants is that all firms engaged in contracting to advertising
agencies face significant switching costs when bringing on a new advertising partner.
Furthermore, Marrowstone understands that in this industry there is a significant learning
curve that creates declining "unit" costs as a firm gains more cumulative experience in the
field itself and with long-term clients specifically.
Rivalry among different advertising agencies as stated before is quite intense. The advertising
market as a whole is mature with low growth. Most of the largest agencies are mutually
dependent when it comes to jockeying for position and market share. The fact that there are
so many diverse and seemingly "generic" or general advertising agencies makes this a
cutthroat industry.
The threat of clients backwardly integrating so as to have all their advertising done in-house is
one of the major factors that buyers use to indirectly control price in this industry, and
increase competition among firms. This must always be foremost in the minds of
Marrowstone's management when offering services and setting prices.
Competition
Competition includes all potential advertising agencies that are willing to accept nonprofit
contracts and nonprofit organizations that handle all their advertising in-house. Practically
speaking, this means the largest advertising agencies such as Werner & Voss, Price,
Waterhouse, & Cooper, and other large, nationwide agencies that hold significant market
share. The advertising agency industry is highly fragmented, with a large number of small
companies that mainly cater to small firms and a few large companies that seek the largest
contracts from companies such as McDonalds, GM, etc. This makes competition within the
industry very intense. Through our niche strategy we intend to avoid such a debilitating
environment and avoid its drawbacks such as price wars, etc.
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Marrowstone Advertising Consultants
Price and scope are also important reasons for accepting contracts, especially if the company
is small.
nonprofit organizations have very different needs that other firms. Companies offering a
product or service need to inform the public about the benefits of their product/service and
then inspire them to purchase by leading them through an implicit or explicit cost-benefit
analysis. On the other hand, nonprofits must appeal to a person's higher sense of community
duty in order to obtain contributions. Advertisements must be a thought-provoking experience
that engenders action. This is a far more difficult task to achieve than ordinary marketing and
usually requires more resources and time than product/service marketing. Many advertising
agencies do not desire to accept these types of contracts and leave it to the nonprofit
organizations to create their own marketing. This leads to higher costs, more emphasis on
obtaining contributions, and less effective management of the organization's goals.
In order to attract clients, Marrowstone will begin to contact promising organizations and offer
free consultations, and an initial contract at reduced prices. These promotions will allow us to
begin to make our reputation. In addition, Mr. Cole and Mrs. Marks will be traveling to six
conventions across the Eastern part of the country during the first year of operations where
we will have booths to advertise our services. Finally we will be setting up cold calls to
potential clients and have half and full page advertisements in various publications catering to
nonprofit organization's needs.
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Marrowstone Advertising Consultants
Sales are based on the various contract projects we anticipate acquiring in the various market
segments. Revenues are based on average costs per project based on estimated time and
complexity of project plus and undisclosed profit margin. The company does not have any
significant direct costs of sales.
Sales Forecast
Sales 2003 2004 2005
Environmental nonprofits $93,000 $145,000 $224,000
Youth development nonprofits $33,000 $56,000 $98,000
Cultural nonprofits $69,000 $110,000 $93,000
Other $36,000 $45,000 $45,000
Total Sales $231,000 $356,000 $460,000
Sales Monthly
$45,000
$40,000
$35,000
$30,000
Environmental nonprofits
$25,000
Youth development nonprofits
$20,000
Cultural nonprofits
$15,000
Other
$10,000
$5,000
$0
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Marrowstone Advertising Consultants
The company will have four officers including our president, Mr. Curtiss Cole. Our head of
operations will be Mr. David Danielson, plus two advertising consultants, and a graphic artist.
Mr. Winn will handle all of our audio-visual design work and he will eventually have a staff of
graphic artists working under him. Finances and general admin will be handled by Mrs. Marks.
The company plans to hire additional advertising consultants, graphic artists and
administrative personnel as we begin to get large numbers of contracts.
6.1 Personnel
Mr. Curtis Cole is a former marketing executive with the Land Trust Alliance and has many
years of experience working with nonprofits in the environmental field. Previous companies Mr.
Cole has worked for include the Sierra Club and the Audubon Society. Mr. Cole has successfully
launched numerous advertising and public awareness campaigns with these organizations
including efforts to preserve the orca population in the Puget Sound region and to reduce the
pollution levels in Denver, CO. Mr. Cole has an MBA in marketing and a BS in international
relations.
Mr. David Danielson graduated from Penn State University with a bachelors degree in
marketing in 1975. From 1978-1988 Mr. Danielson worked for Ford Motor Company as an
advertising executive. In 1989 he went to work for Anderson Consulting in their marketing and
advertising division. Four years later, Mr. Danielson went to work as the Boy Scouts of
America's chief marketing executive.
Table: Personnel
Personnel Plan
2003 2004 2005
Mr. Curtis Cole- president $36,000 $36,000 $60,000
Mrs. Jennie Marks - CFO $36,000 $36,000 $60,000
Mr. David Danielson - projects manager $36,000 $36,000 $45,000
Mr. Milo Winn - audio-visual director $36,000 $36,000 $36,000
Advertising consultant $36,000 $36,000 $36,000
Advertising consultant $0 $36,000 $36,000
Graphic artist $0 $0 $21,000
Total People 5 6 7
Total Payroll $180,000 $216,000 $294,000
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Marrowstone Advertising Consultants
Our financial plan anticipates one year of negative profits as we gain sales volume. We have
budgeted enough investment to cover these losses and have an additional credit line of
$60,000 available if sales do not match predictions.
We are assuming approximately 75% sales on credit and average interest rates of 10%. These
are considered to be conservative in case our predictions are erroneous.
General Assumptions
2003 2004 2005
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Sales on Credit % 75.00% 75.00% 75.00%
Other 0.00% 0.00% 0.00%
Calculated Totals
Payroll Expense $180,000 $216,000 $294,000
Sales on Credit $173,250 $267,000 $345,000
New Accounts Payable $101,917 $116,616 $133,096
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Marrowstone Advertising Consultants
Our Break-even Analysis is based on the assumptions that our gross margin is 100%. In other
words, we will have insignificant direct cost of sales. Since each project will be of different
scope, length, and complexity, it is difficult to assign an average per unit revenue figure.
However, it is conservatively believed that during the first three years, average profitability
per month per segment will be about $8,000. This is because we will be dealing with smaller
companies at first that have smaller projects. We expect that about three projects per month
will guarantee a break-even point.
Break-even Analysis:
Monthly Units Break-even 3
Monthly Revenue Break-even $22,583
Assumptions:
Average Per-Unit Revenue $8,000.00
Average Per-Unit Variable Cost $0.00
Estimated Monthly Fixed Cost $22,583
Break-even Analysis
$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
$0 $16,000 $32,000 $48,000 $64,000 $80,000
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Marrowstone Advertising Consultants
The following table itemizes our revenues and associated costs. We expect to be paying higher
costs in marketing and advertising than other companies as we attempt to build sales volume.
As the reader can see, we expect monthly profits to begin in August 2003 and yearly profits to
occur in 2004. The charts following the table give a visual respresentation.
Profit Monthly
$20,000
$15,000
$10,000
$5,000
$0
($5,000)
($10,000)
($15,000)
($20,000)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Marrowstone Advertising Consultants
Profit Yearly
$40,000
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
($40,000)
($50,000)
($60,000)
2003 2004 2005
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Marrowstone Advertising Consultants
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2003 2004 2005
The following is our Cash Flow table and chart. We do not expect to have any short-term cash
flow problems even though we will be operating at a loss for the first year. Our short-term
loan of $16,000 will be repaid in two equal payments in 2004-2005. Our $45,000 long-term
loan will be paid off in ten years.
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Marrowstone Advertising Consultants
Cash Received
Cash from Operations:
Cash Sales $57,750 $89,000 $115,000
Cash from Receivables $120,750 $238,591 $321,364
Subtotal Cash from Operations $178,500 $327,591 $436,364
Cash
$120,000
$100,000
$80,000
$60,000
$0
($20,000)
($40,000)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Marrowstone Advertising Consultants
The following table shows the Project Balance Sheet for Marrowstone Advertising.
Assets
Current Assets 2003 2004 2005
Cash $20,474 $13,635 $20,218
Accounts Receivable $52,500 $80,909 $104,545
Other Current Assets $5,000 $5,000 $5,000
Total Current Assets $77,974 $99,545 $129,764
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $2,000 $4,000 $6,000
Total Long-term Assets $8,000 $6,000 $4,000
Total Assets $85,974 $105,545 $133,764
We have included industry standard ratios from the advertising consultant industry to compare
with ours. As this is a new sub-market of the overall industry, we expect some significant
differences especially in sales growth, financing ratios, long-term asset investments and net
worth. However, our projections indicate a healthy company that will be able to obtain and
retain long-term profitability.
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Marrowstone Advertising Consultants
Table: Ratios
Ratio Analysis
2003 2004 2005 Industry Profile
Sales Growth 0.00% 54.11% 29.21% 7.51%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 96.97% 98.03% 98.48% 100.00%
Selling, General & Administrative Expenses 119.88% 92.03% 91.76% 84.13%
Advertising Expenses 0.00% 0.00% 0.00% 3.06%
Profit Before Interest and Taxes -20.35% 10.11% 10.63% 2.36%
Main Ratios
Current 3.45 4.02 4.97 1.76
Quick 3.45 4.02 4.97 1.49
Total Debt to Total Assets 78.62% 62.32% 47.17% 5.71%
Pre-tax Return on Net Worth -287.86% 76.82% 62.47% 55.31%
Pre-tax Return on Assets -61.55% 28.94% 33.01% 12.78%
Activity Ratios
Accounts Receivable Turnover 3.30 3.30 3.30 n.a
Collection Days 55 91 98 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 10.63 7.90 6.97 n.a
Payment Days 29 457 557
Total Asset Turnover 2.69 3.37 3.44 n.a
Debt Ratios
Debt to Net Worth 3.68 1.65 0.89 n.a
Current Liab. to Liab. 0.33 0.38 0.41 n.a
Liquidity Ratios
Net Working Capital $55,383 $74,767 $103,672 n.a
Interest Coverage -7.94 6.60 10.29 n.a
Additional Ratios
Assets to Sales 0.37 0.30 0.29 n.a
Current Debt/Total Assets 26% 23% 20% n.a
Acid Test 1.13 0.75 0.97 n.a
Sales/Net Worth 12.57 8.95 6.51 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 18
Appendix
Sales Forecast
Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Environmental nonprofits $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $9,000 $24,000
Youth development nonprofits $0 $0 $0 $0 $0 $2,000 $4,000 $4,000 $5,000 $5,000 $6,000 $7,000
Cultural nonprofits $0 $0 $0 $0 $7,000 $5,000 $3,000 $26,000 $4,000 $7,000 $10,000 $7,000
Other $0 $0 $0 $0 $0 $0 $7,000 $5,000 $12,000 $5,000 $2,000 $5,000
Total Sales $6,000 $6,000 $6,000 $6,000 $13,000 $13,000 $20,000 $41,000 $27,000 $23,000 $27,000 $43,000
Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Row 1 $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
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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Appendix
Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mr. Curtis Cole- president $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Mrs. Jennie Marks - CFO $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Mr. David Danielson - projects manager $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Mr. Milo Winn - audio-visual director $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Advertising consultant $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Advertising consultant $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Graphic artist $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5 5
Total Payroll $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Page 2
Appendix
General Assumptions
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Sales on Credit % 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
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%
Calculated Totals
Payroll Expense $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Sales on Credit $4,500 $4,500 $4,500 $4,500 $9,750 $9,750 $15,000 $30,750 $20,250 $17,250 $20,250 $32,250
New Accounts Payable $7,603 $9,397 $7,392 $8,386 $8,381 $9,375 $8,411 $7,606 $8,600 $9,595 $7,589 $9,583
Page 3
Appendix
Page 4
Appendix
Pro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received
Cash from Operations:
Cash Sales $1,500 $1,500 $1,500 $1,500 $3,250 $3,250 $5,000 $10,250 $6,750 $5,750 $6,750 $10,750
Cash from Receivables $0 $0 $4,500 $4,500 $4,500 $4,500 $9,750 $9,750 $15,000 $30,750 $20,250 $17,250
Subtotal Cash from Operations $1,500 $1,500 $6,000 $6,000 $7,750 $7,750 $14,750 $20,000 $21,750 $36,500 $27,000 $28,000
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations:
Cash Spending $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Payment of Accounts Payable $3,000 $7,603 $9,397 $7,392 $8,386 $8,381 $9,375 $8,411 $7,606 $8,600 $9,595 $7,589
Subtotal Spent on Operations $18,000 $22,603 $24,397 $22,392 $23,386 $23,381 $24,375 $23,411 $22,606 $23,600 $24,595 $22,589
Net Cash Flow ($17,166) ($21,769) ($19,063) ($17,058) ($16,302) ($16,297) ($3,791) ($2,577) ($1,522) $12,234 $1,740 $4,745
Cash Balance $100,134 $78,365 $59,302 $42,244 $25,942 $9,646 $5,855 $3,277 $1,756 $13,990 $15,729 $20,474
Page 5
Appendix
Assets
Current Assets Starting Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash $117,300 $100,134 $78,365 $59,302 $42,244 $25,942 $9,646 $5,855 $3,277 $1,756 $13,990 $15,729 $20,474
Accounts Receivable $0 $4,500 $9,000 $9,000 $9,000 $14,250 $19,500 $24,750 $45,750 $51,000 $37,500 $37,500 $52,500
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 $5,000
Total Current Assets $122,300 $109,634 $92,365 $73,302 $56,244 $45,192 $34,146 $35,605 $54,027 $57,756 $56,490 $58,229 $77,974
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Accumulated Depreciation $0 $166 $332 $498 $664 $830 $996 $1,162 $1,328 $1,494 $1,660 $1,826 $2,000
Total Long-term Assets $10,000 $9,834 $9,668 $9,502 $9,336 $9,170 $9,004 $8,838 $8,672 $8,506 $8,340 $8,174 $8,000
Total Assets $132,300 $119,468 $102,033 $82,804 $65,580 $54,362 $43,150 $44,443 $62,699 $66,262 $64,830 $66,403 $85,974
Long-term Liabilities $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000 $45,000
Total Liabilities $64,000 $67,937 $69,065 $66,394 $66,722 $66,051 $66,379 $69,749 $68,278 $68,606 $68,935 $66,263 $67,591
Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $101,500 $103,000 $103,000 $103,000 $103,000 $103,000
Retained Earnings ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700) ($31,700)
Earnings $0 ($16,769) ($35,332) ($51,890) ($69,442) ($79,988) ($91,529) ($95,107) ($76,878) ($73,644) ($75,405) ($71,160) ($52,917)
Total Capital $68,300 $51,531 $32,968 $16,410 ($1,142) ($11,688) ($23,229) ($25,307) ($5,578) ($2,344) ($4,105) $140 $18,383
Total Liabilities and Capital $132,300 $119,468 $102,033 $82,804 $65,580 $54,362 $43,150 $44,443 $62,699 $66,262 $64,830 $66,403 $85,974
Net Worth $68,300 $51,531 $32,968 $16,410 ($1,142) ($11,688) ($23,229) ($25,307) ($5,578) ($2,344) ($4,105) $140 $18,383
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