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This sample plan was created for a hypothetical investment company that buys other companies as

investments. The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.
This sample plan has an abbreviated plan outline. With the exception of the Executive Summary,
only those topics linked to key tables have been used.
This sample business plan has been made available to users of Business Plan Pro, business planning
software published by Palo Alto Software, Inc. Names, loc ations and numbers may have been
changed, and substantial portions of the original plan text may have been omitted to preserve
confidentiality and proprietary information.
You are welcome to use this plan as a starting point to create your own, but you do not have
permission to resell, reproduce, publish, distribute or even c opy this plan as it exists here.
Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed
to the marketing department of Palo Alto Software at marketing@paloalto.com. For product
information visit our Website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.

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business plan is confidential; therefore, reader agrees not to disc lose it without the express
written permission of _______________.
It is ac knowledged by reader that information to be furnished in this business plan is in all respects
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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
Chart: Highlights ......................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Start-up Summary ......................................................................................................................2
Table: Start-up .........................................................................................................................3
Table: Start-up Funding ..........................................................................................................4
Chart: Start-up .........................................................................................................................5
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................5
5.0 Strategy and Implementation Summary ............................................................................................5
6.0 Sales Forecast ....................................................................................................................................6
Table: Sales Forecast ............................................................................................................6
Chart: Sales Monthly...............................................................................................................6
Chart: Sales by Year ...............................................................................................................7
7.0 Management Summary.......................................................................................................................7
7.1 Personnel Plan ...........................................................................................................................7
Table: Personnel .....................................................................................................................7
8.0 Financial Plan ......................................................................................................................................8
8.1 Projected Profit and Loss .........................................................................................................8
Chart: Profit Monthly................................................................................................................8
Chart: Profit Yearly ..................................................................................................................9
Chart: Gross Margin Monthly .................................................................................................9
Chart: Gross Margin Yearly..................................................................................................10
Table: Profit and Loss ..........................................................................................................10
8.2 Projected Cash Flow...............................................................................................................11
Chart: Cash ...........................................................................................................................11
Table: Cash Flow..................................................................................................................12
8.3 Projected Balance Sheet ........................................................................................................12
Table: Balance Sheet ...........................................................................................................13
8.4 Business Ratios .......................................................................................................................14
Table: Ratios .........................................................................................................................15
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

Page 1

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 $20 million as
an initial investment fund. In its early months of existence, it invests $5 million eac h 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 c osts 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 transac ted 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 writedown 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


Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.

2.1 Start-up Summary


This hypothetical Venture Capital firm starts with $20 million 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.

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 Expenses

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

Start-up Assets
Cash Required
Other Current Assets

$20,100,000
$0

Long-term Assets
Total Assets

$0
$20,100,000

Total Requirements

$20,100,000

Page 3

Investment Company
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

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

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

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

Liabilities and Capital


Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)

$0
$0
$0

Other Current Liabilities (interest-free)


Total Liabilities

$0
$0

Capital
Planned Investment
Investor 1
Investor 2
Other
Additional Investment Requirement
Total Planned Investment

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

Loss at Start-up (Start-up Expenses)


Total Capital

$0
$20,100,000

Total Capital and Liabilities

$20,100,000

Total Funding

$20,100,000

Page 4

Investment Company

3.0 Services
Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.

4.0 Market Analysis Summary


Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.

5.0 Strategy and Implementation Summary


Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
Page 5

Investment Company
descriptions can be found in the topics assoc iated with key tables.

6.0 Sales Forecast


The company invests $5 million eac h 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 ac counting as a sale of $5 million worth of stoc k plus a gain of $45 million.
The sales forecast shows the gain of $45 million.

Table: Sales Forecast


Sales Forecast
Year 1

Year 2

Year 3

Year 4

Sales
Management Fees

$400,000

$400,000

$400,000

$400,000

$400,000

Equity appreciation
Total Sales

$0
$400,000

$0
$400,000

$0
$400,000

$0
$400,000

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

Year 1
$0
$0
$0

Year 2
$0
$0
$0

Year 3
$0
$0
$0

Year 4
$0
$0
$0

Year 5
$0
$0
$0

Direct Cost of Sales


Management Fees
Equity appreciation
Subtotal Direct Cost of Sales

Year 5

Page 6

Investment Company

7.0 Management Summary


Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.

7.1 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
Personnel Plan
Year 1
$240,000
$60,000

Year 2
$252,000
$63,000

Year 3
$265,000
$66,000

Year 4
$278,000
$69,000

Year 5
$292,000
$72,000

Total People

Total Payroll

$300,000

$315,000

$331,000

$347,000

$364,000

Partners
Other

Page 7

Investment Company
8.0 Financial Plan
Content has been omitted from this sample plan topic, and following sub-topics. This sample
plan has an abbreviated plan outline. With the exception of the Executive Summary, only
those topics linked to key tables have been used.
The foc us of this sample plan is to show the financials for this type of company. Brief
descriptions can be found in the topics assoc iated with key tables.

8.1 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 ac counting until there is a
transaction. The ac counting treatment is identical to what an individual investor does with
stoc ks: changes in the market price of a share of stoc k are irrelevant until that share is
ac tually sold to somebody else, or, if the company ceases to exist, that stoc k is written off as
having no value.

Page 8

Investment Company

Page 9

Investment Company

Table: Profit and Loss


Pro Forma Profit and Loss
Sales
Direct Cost of Sales

Year 1
$400,000
$0

Year 2
$400,000
$0

Year 3
$400,000
$0

Year 4
$400,000
$0

Year 5
$45,400,000
$0

Investment write-off
Total Cost of Sales

$0
$0

$0
$0

$5,000,000
$5,000,000

$0
$0

$0
$0

Gross Margin
Gross Margin %

$400,000
100.00%

$400,000
100.00%

($4,600,000)
-1150.00%

$400,000
100.00%

$45,400,000
100.00%

Expenses
Payroll

$300,000

$315,000

$331,000

$347,000

$364,000

Sales and Marketing and Other Expenses


Depreciation
Leased Equipment
Utilities
Insurance
Rent

$13,200
$0
$2,400
$1,200
$2,400
$36,000

$13,900
$0
$2,500
$1,300
$2,500
$37,800

$14,600
$0
$2,600
$1,400
$2,600
$39,700

$15,300
$0
$2,700
$1,500
$2,700
$41,700

$16,000
$0
$2,800
$1,600
$2,800
$43,800

Payroll Taxes
Other

$45,000
$0

$47,250
$0

$49,650
$0

$52,050
$0

$54,600
$0

$400,200

$420,250

$441,550

$462,950

$485,600

Profit Before Interest and Taxes


EBITDA
Interest Expense
Taxes Incurred

($200)
($200)
$0
$0

($20,250)
($20,250)
$0
$0

($5,041,550)
($5,041,550)
$0
$0

($62,950)
($62,950)
$0
$0

$44,914,400
$44,914,400
$0
$8,982,880

Net Profit
Net Profit/Sales

($200)
-0.05%

($20,250)
-5.06%

($5,041,550)
-1260.39%

($62,950)
-15.74%

$35,931,520
79.14%

Total Operating Expenses

Page 10

Investment Company
8.2 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 c osts 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.

Page 11

Investment Company
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

Year 4

Year 5

$400,000
$400,000

$400,000
$400,000

$400,000
$400,000

$400,000
$400,000

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

$0

$0

$0

$0

$0

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

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

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

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

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

Year 1

Year 2

Year 3

Year 4

Year 5

$300,000
$92,128
$392,128

$315,000
$104,671
$419,671

$331,000
$4,699,155
$5,030,155

$347,000
$526,465
$873,465

$364,000
$8,365,697
$8,729,697

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Other Liabilities Principal Repayment


Long-term Liabilities Principal Repayment
Purchase Other Current Assets

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$20,000,000
$0
$20,392,128

$0
$0
$419,671

$0
$0
$5,030,155

$0
$0
$873,465

$0
$0
$8,729,697

($19,992,128)
$107,872

($19,671)
$88,201

$369,845
$458,045

($373,465)
$84,580

$41,670,303
$41,754,883

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

Purchase Long-term Assets


Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

8.3 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.

Page 12

Investment Company
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1

Year 2

Year 3

Year 4

Year 5

$107,872
$0
$107,872

$88,201
$0
$88,201

$458,045
$0
$458,045

$84,580
$0
$84,580

$41,754,883
$0
$41,754,883

$20,000,000
$0
$20,000,000
$20,107,872

$20,000,000
$0
$20,000,000
$20,088,201

$15,000,000
$0
$15,000,000
$15,458,045

$15,000,000
$0
$15,000,000
$15,084,580

$10,000,000
$0
$10,000,000
$51,754,883

Liabilities and Capital

Year 1

Year 2

Year 3

Year 4

Year 5

Current Liabilities
Accounts Payable

$8,072

$8,651

$420,045

$9,530

$748,313

Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$8,072

$0
$0
$8,651

$0
$0
$420,045

$0
$0
$9,530

$0
$0
$748,313

Long-term Liabilities
Total Liabilities

$0
$8,072

$0
$8,651

$0
$420,045

$0
$9,530

$0
$748,313

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

$20,100,000
$0
($200)
$20,099,800
$20,107,872

$20,100,000
($200)
($20,250)
$20,079,550
$20,088,201

$20,100,000
($20,450)
($5,041,550)
$15,038,000
$15,458,045

$20,200,000
($5,062,000)
($62,950)
$15,075,050
$15,084,580

$20,200,000
($5,124,950)
$35,931,520
$51,006,570
$51,754,883

Net Worth

$20,099,800

$20,079,550

$15,038,000

$15,075,050

$51,006,570

Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

Page 13

Investment Company
8.4 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 14

Investment Company
Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
0.00%

Year 3
0.00%

Year 4
0.00%

0.00%
0.54%
99.46%
100.00%

0.00%
0.44%
99.56%
100.00%

0.00%
2.96%
97.04%
100.00%

0.00%
0.56%
99.44%
100.00%

0.00%
80.68%
19.32%
100.00%

44.20%
74.30%
25.70%
100.00%

0.04%
0.00%
0.04%
99.96%

0.04%
0.00%
0.04%
99.96%

2.72%
0.00%
2.72%
97.28%

0.06%
0.00%
0.06%
99.94%

1.45%
0.00%
1.45%
98.55%

49.00%
13.80%
62.80%
37.20%

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%

13.36
13.36
0.04%
0.00%
0.00%

10.20
10.20
0.04%
-0.10%
-0.10%

1.09
1.09
2.72%
-33.53%
-32.61%

8.88
8.88
0.06%
-0.42%
-0.42%

55.80
55.80
1.45%
88.06%
86.78%

1.49
1.17
62.80%
4.20%
11.30%

Additional Ratios
Net Profit Margin

Year 1
-0.05%

Year 2
-5.06%

Year 3
-1260.39%

Year 4
-15.74%

Year 5
79.14%

n.a

Return on Equity

0.00%

-0.10%

-33.53%

-0.42%

70.44%

n.a

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover

12.41
27
0.02

12.17
29
0.02

12.17
15
0.03

12.17
676
0.03

12.17
15
0.88

n.a
n.a
n.a

0.00
1.00

0.00
1.00

0.03
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

50.27
0%
13.36
0.02
0.00

50.22
0%
10.20
0.02
0.00

38.65
3%
1.09
0.03
0.00

37.71
0%
8.88
0.03
0.00

1.14
1%
55.80
0.89
0.00

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

Sales Growth
Percent of Total Assets
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current 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

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

Year 5 Industry Profile


11250.00%
8.20%

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 15

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

2%

$0

$0

$100,000

$0

$0

$100,000

$0

$0

$100,000

$0

$0

$100,000

0%

$0
$0

$0
$0

$0
$100,000

$0
$0

$0
$0

$0
$100,000

$0
$0

$0
$0

$0
$100,000

$0
$0

$0
$0

$0
$100,000

Month 1
$0
$0
$0

Month 2
$0
$0
$0

Month 3
$0
$0
$0

Month 4
$0
$0
$0

Month 5
$0
$0
$0

Month 6
$0
$0
$0

Month 7
$0
$0
$0

Month 8
$0
$0
$0

Month 9
$0
$0
$0

Month 10
$0
$0
$0

Month 11
$0
$0
$0

Month 12
$0
$0
$0

Page 1

Appendix
Table: Personnel
Personnel Plan
Month 1
$20,000
$5,000

Month 2
$20,000
$5,000

Month 3
$20,000
$5,000

Month 4
$20,000
$5,000

Month 5
$20,000
$5,000

Month 6
$20,000
$5,000

Month 7
$20,000
$5,000

Month 8
$20,000
$5,000

Month 9
$20,000
$5,000

Month 10
$20,000
$5,000

Month 11
$20,000
$5,000

Month 12
$20,000
$5,000

Total People

Total Payroll

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

Partners
Other

0%
0%

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate

Month 1
1
10.00%

Month 2
2
10.00%

Month 3
3
10.00%

Month 4
4
10.00%

Month 5
5
10.00%

Month 6
6
10.00%

Month 7
7
10.00%

Month 8
8
10.00%

Month 9
9
10.00%

Month 10
10
10.00%

Month 11
11
10.00%

Month 12
12
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
Other

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

20.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales

Month 1
$0
$0

Month 2
$0
$0

Month 3
$100,000
$0

Month 4
$0
$0

Month 5
$0
$0

Month 6
$100,000
$0

Month 7
$0
$0

Month 8
$0
$0

Month 9
$100,000
$0

Month 10
$0
$0

Month 11
$0
$0

Month 12
$100,000
$0

Investment write-off

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
0.00%

$0
0.00%

$100,000
100.00%

$0
0.00%

$0
0.00%

$100,000
100.00%

$0
0.00%

$0
0.00%

$100,000
100.00%

$0
0.00%

$0
0.00%

$100,000
100.00%

Gross Margin
Gross Margin %

Expenses
Payroll

$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 and Marketing and Other


Expenses
Depreciation
Leased Equipment

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$1,100

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

Utilities
Insurance
Rent

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$100
$200
$3,000

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$3,750

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

Profit Before Interest and Taxes

($33,350)

($33,350)

$66,650

($33,350)

($33,350)

$66,650

($33,350)

($33,350)

$66,650

($33,350)

($33,350)

$66,650

EBITDA
Interest Expense

($33,350)
$0

($33,350)
$0

$66,650
$0

($33,350)
$0

($33,350)
$0

$66,650
$0

($33,350)
$0

($33,350)
$0

$66,650
$0

($33,350)
$0

($33,350)
$0

$66,650
$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

($33,350)
0.00%

($33,350)
0.00%

$66,650
66.65%

($33,350)
0.00%

($33,350)
0.00%

$66,650
66.65%

($33,350)
0.00%

($33,350)
0.00%

$66,650
66.65%

($33,350)
0.00%

($33,350)
0.00%

$66,650
66.65%

Payroll Taxes
Other
Total Operating Expenses

Taxes Incurred
Net Profit
Net Profit/Sales

15%

Page 4

Appendix
Table: Cash Flow
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

$0
$0

$0
$0

$100,000
$100,000

$0
$0

$0
$0

$100,000
$100,000

$0
$0

$0
$0

$100,000
$100,000

$0
$0

$0
$0

$100,000
$100,000

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing


New Other Liabilities (interest-free)

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets


Sales of Long-term Assets
New Investment Received

$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
$0

$0
$0
$0

Subtotal Cash Received

$0

$0

$100,000

$0

$0

$100,000

$0

$0

$100,000

$0

$0

$100,000

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

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

Bill Payments
Subtotal Spent on Operations

$278
$25,278

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

$8,350
$33,350

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment


Purchase Other Current Assets

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$5,000,000

$5,000,000

$5,000,000

$5,000,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$5,025,278

$5,033,350

$5,033,350

$5,033,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

$33,350

Net Cash Flow

($5,025,278)

($5,033,350)

($4,933,350)

($5,033,350)

($33,350)

$66,650

($33,350)

($33,350)

$66,650

($33,350)

($33,350)

$66,650

Cash Balance

$15,074,722

$10,041,372

$5,108,022

$74,672

$41,322

$107,972

$74,622

$41,272

$107,922

$74,572

$41,222

$107,872

Purchase Long-term Assets


Dividends
Subtotal Cash Spent

0.00%

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Other Current Assets

$20,100,000
$0

$15,074,722
$0

$10,041,372
$0

$5,108,022
$0

$74,672
$0

$41,322
$0

$107,972
$0

$74,622
$0

$41,272
$0

$107,922
$0

$74,572
$0

$41,222
$0

$107,872
$0

Total Current Assets

$20,100,000

$15,074,722

$10,041,372

$5,108,022

$74,672

$41,322

$107,972

$74,622

$41,272

$107,922

$74,572

$41,222

$107,872

Long-term Assets

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

$20,000,000

Accumulated Depreciation
Total Long-term Assets

$0
$0

$0
$5,000,000

$0
$10,000,000

$0
$15,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$0
$20,000,000

$20,100,000

$20,074,722

$20,041,372

$20,108,022

$20,074,672

$20,041,322

$20,107,972

$20,074,622

$20,041,272

$20,107,922

$20,074,572

$20,041,222

$20,107,872

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Long-term Assets

Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable

$0

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$0
$0

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

$0
$0
$8,072

Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Liabilities

$0

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

$8,072

Paid-in Capital
Retained Earnings

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

$20,100,000
$0

Earnings
Total Capital

$0
$20,100,000

($33,350)
$20,066,650

($66,700)
$20,033,300

($50)
$20,099,950

($33,400)
$20,066,600

($66,750)
$20,033,250

($100)
$20,099,900

($33,450)
$20,066,550

($66,800)
$20,033,200

($150)
$20,099,850

($33,500)
$20,066,500

($66,850)
$20,033,150

($200)
$20,099,800

Total Liabilities and Capital

$20,100,000

$20,074,722

$20,041,372

$20,108,022

$20,074,672

$20,041,322

$20,107,972

$20,074,622

$20,041,272

$20,107,922

$20,074,572

$20,041,222

$20,107,872

Net Worth

$20,100,000

$20,066,650

$20,033,300

$20,099,950

$20,066,600

$20,033,250

$20,099,900

$20,066,550

$20,033,200

$20,099,850

$20,066,500

$20,033,150

$20,099,800

Page 6