Help for finance……..

The project is about 7  inch tablet, I have to find sales volumes for 5 years….  and also needs What if- Analysis done……. I have attached the document once you open it, the info will help you do the sales volume and what if analysis…. MSRP-$179.99 OEM-$154.99. Projected annual units sold-6,230,000 (research online showed 2013 annual tablet units sold of all tablet brands was 62,300,000 in 2013) we plan to gain 10% market share….

Sheet1

Analysis

sold per period

Sales price per unit $ 179.99 $ 179.99 $ 179.99 $ 179.99

Amount

$ 72,000.00 $ 72,000.00 $ 72,000.00

0

$ – 0

$ 72,000.00

$ 72,000.00 $ 72,000.00

Total Sales 0

$ 359,980.00

$ 45.00

$ 90,000.00

Fixed costs per period

$ 10,000.00

$ 10,000.00

$ 72,000.00

Net Profit (loss)

Units

Breakeven

Sales Sales volume Analysis
Sales price per unit $ 179.99 Units 0 1000 2000 3000
Sales volume per period $ 2,000.00
Total Sales $ 359,980.00 Fixed costs per period $ 72,000.00
Variable Costs $ 45,000.00 $ – 0
Variable costs Total Costs $ 117,000.00
Total variable cost per unit $ 45.00 $ 179,990.00 $ 539,970.00
total variable cost per period $ 90,000.00 Net Profit (loss) $ (72,000.00) $ 62,990.00 $ 287,980.00 $ 467,970.00
Contribution per unit
Gross Margin
Management Salary $ 42,000.00
rent $ 10,000.00
Advertising
Insurance and Utilities
Total Fixed costs per period
$ 18,000.00
Breakeven Point 1600
Dollars $ 96,001.78

Sheet2

Sheet3

2

>Break

Even (SC

1

) BUSN-

4 6 0

-1

3

2

5

5

: FI

NA

NCE TEAM BREAK-EVEN ANALYSIS 1) BREAK-EVEN DEFINITION

http://www.forresidentialpros.com/article/103

48

913/break-even-sales-volume

If a company wants to stay in business, it must know and understand its break-even sales volume. This is the amount a company must produce and sell to cover its overhead. This is neither a profit or a loss, just the price of staying afloat. 2) BREAK-EVEN ANALYSIS 2.1)

Contribution

Margin The Contributions margin is the “selling price less the variable costs per unit.” In essence, it is the amount of money the sale of each unit or tablet will contribute to covering total fixed costs. To clarify variable costs, represents the amount it costs to buy or create the product that is being sold. Variable costs can include raw material costs, direct labor, sales commissions, freight costs, packaging and energy costs associated with producing the

AINO Tablet

. 2.2) Break even volume Now that the Contributions Margin is known, the break-even sales volume can be figured out. To calculate, we need the annual fixed costs. The fixed cost is the costs of being in business, namely the company’s overhead. These costs don’t vary with the level of output of a producing the tablet, and would be incurred if production were to cease. This includes rent, insurance, depreciation, salaries, property taxes and any other costs that aren’t directly associated with production of a project. BREAK-EVEN POINT

IN

UNITS

– VOLUME AINO
Production Activity Unit of Measure Qty/ Amount Schedule Sales discounts are not reported as an expense. Rather, sales discounts are reported as a reduction of gross sales. In other words, Sales or

Gross Sales

minus Sales Discounts and Sales Returns and Sales Allowances =

Net Sales

. Selling Price Per Unit $ 1

7

9

.00 Variable Overhead

Per Unit

$ 50

.00 Fixed Overhead

Per Unit

$ 80

.00 Fixed Overhead

Per

Year $ 72,000,000

.00 Fixed Selling and Administrative

Per Year

$ 14,129,100.00 SC2

: Discounts + Returns Units Produced

Per Year

900,000

SC2
Units in beginnig finished goods


Units Sold

Per Year

850,000 Selling Price

$ 179

.00 Variable cost (Per Unit) $ 50.00 Total

Fixed cost $

86,129,100

.00 Contribution Margin (Per Unit) $ 129 Break-even point 667,667 Total fixed costs+Target profit/Contribution Margin per Unit Identify in Month BREAK-EVEN POINT IN SALES – DOLLARS

AINO
Production Activity Unit of Measure Qty/ Amount Schedule

Selling Price Per Unit $ 179.00
Variable Overhead Per Unit $ 50.00
Fixed Overhead Per Unit $ 80.00
Fixed Overhead Per Year $ 72,000,000.00
Fixed Selling and Administrative Per Year $ 14,129,100.00

SC2: Discounts + Returns

Units Produced Per Year 900,000 SC2
Units in beginnig finished goods –
Units Sold Per Year 850,000

Selling Price $ 179 Contribution
Variable cost (Per Unit) $ 50

34% 146 $ 33 Total Fixed cost (Per Unit) $ 96 66%

Contribution Margin (Per Unit) $ 129

Contribution Margin Ratio 0.72 Total Fixed Cost

(Fixed cost * Units Produced)

86,129,100
Break-even Point $ 119,512,472 Total fixed costs+Target profit/Contribution Margin Ratio Identify in Months BREAK-EVEN POINT

AINO
Production Activity Unit of Measure Qty/ Amount Schedule

Selling Price Per Unit $ 179.00
Variable Overhead Per Unit $ 50.00
Fixed Overhead Per Unit $ 80.00
Fixed Overhead Per Year $ 72,000,000.00

Discounts & Returns

Per Year $ 14,129,100.00 SC2

Units Produced Per Year 900,000 SC2
Units in beginnig finished goods –
Units Sold Per Year 850,000
Selling Price $ 179 Contribution

Variable cost (Per Unit) $ 50 34% 146
Total Fixed costs $ 86,129,100

66%

Total Fixed cost (Per Unit) $ 96 66%
Contribution Margin (Per Unit) $ 129
Break-even point 667,667 Total fixed costs+Target profit/Contribution Margin per Unit
Contribution Margin Ratio 0.72
Total Fixed Cost (Fixed cost * Units Produced) 86,129,100
Break-even Point $ 119,512,472 Total fixed costs+Target profit/Contribution Margin Ratio

Identify in Months
Sales Volume Net Income Y1 Y2 900000 $ 151,247,372 M1 75,000 $ 12,603,948 M2 150,000 $ 25,207,895 M3 225,000 $ 37,811,843 M4 300,000 $ 50,

41

5,791 M5 375,000 $ 63,019,738 M6 450

,000 $ 75,

62

3,686 M7 525,000 $ 88,227,633 M8 600,000 $ 100,831,581 M9 675

,000 $ 113,435,529 M10 750,000 $ 126,039,476 M11 825,000 $ 138,643,424 M12

900,000 $ 151,247,372
M13 M14 M15 M16

http://www.forresidentialpros.com/article/10348913/break-even-sales-volume

SalesBudget (SC2)

BUSN-460-13255: FINANCE TEAM: SALES BUDGET 1.Sales Analysis using Market Growth, Direct, Indirect Sales & Discounts $ 20.59

$ 20.59 $ 20.59 $ 20.59 $ 20.59
Factors

Schedule

Year 1 Year 2 Year 3 Year 4 Year 5 Tablet

Marketing & Sales –

Tablet Price

1 $ 179 $ 179 $ 179 $ 179 $ 179

USING INFORMATION FROM SALES TEAM Marketing & Sales Dept Projected Sales

Growth per year 20% 25%

20% 20%

Confirm with Sales team Marketing & Sales Dept Projected Sales 1 900,000

1,080,000 1,350,000 1,620,000 1,944,000 Indirect Sales % from Total Production 70% 65% 60%

60% 60%

The goal is to reduce indirect sales Indirect Sales Price ( Discount Applied – Retail Discount) 11.5% $ 158.42

$ 158.42 $ 158.42 $ 158.42 $ 158.42
Indirect Sales Projected Units 630,000 702,000 810

,000 972

,000 1,166,400 Indirect Sales Projected Sales $ 99,801,450 $ 111,207,330 $ 128,316,150 $ 153,979,380 $ 184,775,256 Direct Sales % from Total Production 30% 35% 40%

40% 40%
Direct Sales Price

$ 179.00 $ 179.00 $ 179.00 $ 179.00 $ 179.00
Direct Sales Projected Units 270,000 378,000 540

,000 648,000 777,600 Direct Sales Discount (Free Shipping) $ 4.00 $ 1,080,000 $ 1,512,000 $ 2,160,000 $ 2,592,000 $ 3,110,400 Direct Sales Projected Sales $ 47,250,000 $ 66,150,000 $

94,500

,000 $ 11

3,400,000 $ 136,080,000 Projected Sales Return Units 0.05%

450 540 675 810 972
Project Sales Return Amount $ 80,550 $ 96,660 $ 120,825 $ 144,990 $ 173,988 (+) Total Projected Gross Sales: Tablet $ 161,100,000 $ 193,320,000 $ 241,650,000 $ 289,980,000 $ 347,976,000 (-) Total Projected Discounts – Indirect Sales: Tablet $ 12,968,550 $ 14,450,670 $ 16,673,850 $ 20,008,620 $ 24,010,344 (-) Total Projected Discounts – Direct Sales: Tablet

$ 1,080,000 $ 1,512,000 $ 2,160,000 $ 2,592,000 $ 3,110,400
(-) Total Projected Sales Returns: Tablet

$ 80,550 $ 96,660 $ 120,825 $ 144,990 $ 173,988
(=) Net Sales (Tablet) $ 146,970,900 $ 177,260,670 $ 222,695,325 $ 267,234,390 $ 320,681,268 Peripherals Peripherals package Price $ 30

$ 30 $ 30 $ 30 $ 30
Peripherals package Price for indirect distribution $ 4.58

$ 4.58 $ 4.58 $ 4.58 $ 4.58

85% Peripherals sales % for indirect distribution 50%

50%

45%

40% 40%
Peripherals units – Indirect distribution 315,000 351,000 364,500 388,800 466,560 Peripherals sales – Indirect distribution $ 1,442,700 $ 1,607,580 $ 1,669,410 $ 1,780,704 $ 2,136,845 Peripherals sales % for direct distribution

35% 35% 35% 35% 35%
Peripherals units – direct distribution

94,500

132,300 189,000 226,800 272,160 Peripherals sales – direct distribution $ 2,835,000 $ 3,969,000 $ 5,670,000 $ 6,804,000 $ 8,164,800 Projected Sales Return Units

0.01%

41 48 55 62

74 Project Sales Return Amount

$ 1,229 $ 1,450 $ 1,661 $ 1,847 $ 2,216 (+) Total Projected Gross Sales: Peripherals $ 12,285,000 $ 14,499,000 $ 16,605,000 $ 18,468,000 $ 22,161,600 (-) Total Projected Discounts – Indirect Sales: Peripherals $ 8,007,300 $ 8,922,420 $ 9,265,590 $ 9,883,296 $ 11,859,955 (-) Total Projected Sales Returns: Peripherals

$ 1,229 $ 1,450 $ 1,661 $ 1,847 $ 2,216
(=) Net Sales (Peripherals) $ 4,276,472 $ 5,575,130 $ 7,337,750 $ 8,582,857 $ 10,299,429 (=) TOTAL

NET SALES

$ 151,247,372

$ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697 2.Sales Forecast

NET SALES FORECAST

Item

Year 1 Year 2 Year 3 Year 4 Year 5
Tablet Sales 146970900 177260670 222695325 267234390 320681268 Peripherals Sales 4276471.5 5575130.1 7337749.5 8582857.2 10299428.64 Grand Total 151247371.5 182835800.1 230033074.5 275817247.2 330980696.6 GROSS SALES

FORECAST

Item Year 1 Year 2 Year 3 Year 4 Year 5

Tablet Sales

161100000 193320000 241650000 289980000 347976000 Peripherals Sales

12285000 14499000 16605000 18468000 22161600 Grand Total

173385000 207819000 258255000 308448000 370137600

NET SALES FORECAST
Tablet Sales Year 1 Year 2 Year 3 Year 4 Year 5 146970900 177260670 222695325 267234390 320681268 Peripherals Sales Year 1 Year 2 Year 3 Year 4 Year 5 4276471.5 5575130.0999999996 7337749.5 8582857.1999999993 10299428.640000001 Grand Total Year 1 Year 2 Year 3 Year 4 Year 5 151247371.5 182835800.09999999 230033074.5 275817247.19999999 330980696.63999999

Sales Amount

GROSS SALES FORECAST
Tablet Sales Year 1 Year 2 Year 3 Year 4 Year 5 161100000 193320000 241650000 289980000 347976000 Peripherals Sales Year 1 Year 2 Year 3 Year 4 Year 5 12285000 14499000 16605000 18468000 22161600 Grand Total Year 1 Year 2 Year 3 Year 4 Year 5 173385000 207819000 258255000 308448000 370137600 Sales Amount

StartUp (

SC3

)

BUSN-460-13255: FINANCE TEAM: STARTUP BUDGET 1) START-UP DEFINITION The initial start-up budget identified the required cash flows to enable the entrepreneur to open the business. 2) START-UP ANALYSIS Initial start-up Cash Budget Schedule/ Form Year 0 Comments / Supporting Link Start-up Costs: Application to reserve a name $ 300

http://www.cyberdriveillinois.com/publications/pdf_publications/llc115

Business License $ 500

http://www.cyberdriveillinois.com/publications/pdf_publications/llc455

Configuration of the facility $ 15,000,000 Given Cost General Business Insurance, estimated at $12,500 per year $ 125,000 http://www.localinsurance.com/illinois/ Start-up Inventory (Two months) SC 2 $ 5,250,000 Assuming $35 raw material per unit 1 month Rent and Deposit (includes Utilities) – $12.5 SF/Year – 50,230 SF $ 104,646

http://www.loopnet.com/Listing/16275927/5400-5420-Newport-Dr-Rolling-Meadows-IL/

Recruting costs Appendix $ 13,000 Provided by HR team Labor Cost (Two Months) $ 478,000 Operations & Logistics

Appendix

$ 206,000 Provided by Operation’s team Customer Support

Appendix

$ 152,000 Provided by Customer Support team HR + Finance + Sales

Appendix

$ 120,000 Provided by cross-functional Teams Project Planning

Appendix

$ 60,300 CONFIRM WITH CROSS-FUNCTIONAL TEAM ( HR = 14,400; CS= 9,900; FIN=12,000; PM=###; OPER=###) Advertising $ 750,000 Provided by Sales & Marketing — CONFIRM !! Total Cash budget $ 22,259,746

http://www.cyberdriveillinois.com/publications/pdf_publications/llc455
http://www.cyberdriveillinois.com/publications/pdf_publications/llc115
http://www.loopnet.com/Listing/16275927/5400-5420-Newport-Dr-Rolling-Meadows-IL/

Depreciation

(

SC4

)

Year

1

2 $ 1,800,000

3 $ 1,800,000

4 $ 1,800,000 $ 1,800,000
5 $ 1,800,000

Total $ 9,000,000

Equipment depreciation
Notes:

Equipment total is equal $ 9,000,000
Straight-Line Method
Year Annual Depreciation Year-End Book Value

1

2 $ 1,285,714

3 $ 1,285,714

4 $ 1,285,714

5 $ 1,285,714

6 $ 1,285,714 $ 1,285,714
7 $ 1,285,714 $ – 0

Total $ 9,000,000

BUSN-460-13255: FINANCE TEAM: DEPRECIATION
Equipment depreciation
Notes:
Equipment is depreciated on a straight-line basis over 5 years.
Equipment total is equal $ 9,000,000
Straight-Line Method
Annual Depreciation Year-End Book Value
$ 1,800,000 $ 7,200,000
$ 5,400,000
$ 3,600,000
$ – 0
Equipment is depreciated on a straight-line basis over 7 years.
$ 1,285,714 $ 7,714,286
$ 6,428,571
$ 5,142,857
$ 3,857,143
$ 2,571,429

CGS (

SC5

)

Schedule Year 1 Year 2 Year 3 Year 4 Year 5
Tablet

SC2 900,000 1,080,000 1,350,000 1,620,000 1,944,000

Total Fixed Cost $ 72,000,000

,840,000

$ 80.00 $ 80.00

0

.00

.00

SC1

,000,000

Variable Cost SC1 $ 50 $ 50 $ 50 $ 50 $ 50
Peripherals

SC2

Total Fixed Cost NA NA NA NA NA
Fixed Cost per Unit NA NA NA NA NA

SC1

Variable Cost SC2

$ 1.70 $ 1.70 $ 1.70 $ 1.70

$ 72,000,000 $ 86,400,000 $ 109,350,000 $ 132,840,000 $ 161,352,000

$ 696,150 $ 821,610 $ 940,950 $ 1,046,520 $ 1,255,824

.00

$ 130.00

.00

.00

$ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70

BUSN-460-13255: FINANCE TEAM: CGS BUDGET
1) CGS ANALYSIS
Production Units: Tablet
$ 86,400,000 $ 109,350,000 $ 132 $ 161,352,000
Fixed Cost per Unit SC1 $ 8

1.0 $ 82 $ 83
Total

Variable Cost $ 45,000,000 $ 54,000,000 $ 67,500,000 $ 81 $ 97,200,000
Production Units: Peripherals 409,500 483,300 553,500 615,600 738,720
Total Variable Cost $ 696,150 $ 821,610 $ 940,950 $ 1,046,520 $ 1,255,824
$ 1.70
(+) Total Fixed Cost
(+) Total Variable Cost $ 45,696,150 $ 54,821,610 $ 68,440,950 $ 82,046,520 $ 98,455,824
(+)

Cost of Good Sales: Tablet $ 117,000,000 $ 140,400,000 $ 176,850,000 $ 213,840,000 $ 258,552,000
(+)

Cost of Good Sales: Peripherals
(=) Cost of Good Sales $ 117,696,150 $ 141,221,610 $ 177,790,950 $ 214,886,520 $ 259,807,824
Cost of Good Sales Per Unit: Tablet $ 130 $ 131 $ 132.00 $ 133
Cost of Good Sales Per Unit: Peripherals

Expenses (

SC6

)

Schedule Year 1 Year 2 Year 3 Year 4 Year 5
Tablet Production Units: Tablet SC2 900,000 1,080,000 1,350,000 1,620,000 1,944,000

SC5 $ 117,000,000 $ 140,400,000 $ 176,850,000 $ 213,840,000 $ 258,552,000

Cost of Good Sales Per Unit: Tablet SC5 $ 130.00 $ 130.00 $ 131.00 $ 132.00 $ 133.00

SC5 $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00

38.5%

SC5 $ 45,000,000 $ 54,000,000 $ 67,500,000

$ 97,200,000

24.0%

7.0%

6.0%

$ 5.20

4.0% 4.0% 4.0% 4.0% 4.0%

$ 28.00 $ 28.00

100.00% 100.00% 100.00% 100.00%

: Tablet

$ 117,000,000 $ 140,400,000 $ 176,850,000 $ 213,840,000 $ 258,552,000

Peripherals

SC2 409,500 483,300 553,500 615,600 738,720

Total Fixed + Variable Expenses SC5

Cost of Good Sales Per Unit: Peripherals SC5 $ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70
Direct Expenses Cost per Unit $ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70
Direct Expenses %

100% 100% 100% 100%

Direct Expenses Total $ 696,150 $ 821,610 $ 940,950 $ 1,046,520 $ 1,255,824

$ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70

$ 696,150 $ 821,610.00 $ 940,950.00 $ 1,046,520.00 $ 1,255,824.00

$ 45,696,150 $ 54,821,610 $ 68,440,950 $ 82,046,520 $ 98,455,824

$ 24,570,000 $ 30,888,000 $ 40,675,500 $ 51,321,600 $ 62,052,480

$ 14,040,000 $ 17,128,800 $ 21,752,550 $ 26,730,000 $ 32,577,552

$ 9,360,000 $ 9,828,000 $ 12,379,500 $ 12,830,400 $ 15,513,120

$ 4,680,000 $ 5,616,000 $ 7,074,000 $ 8,553,600 $ 10,342,080

$ 19,350,000 $ 22,939,200 $ 27,468,450 $ 33,404,400 $ 40,866,768

Total Expenses $ 117,696,150 $ 141,221,610 $ 177,790,950 $ 214,886,520 $ 259,807,824

$ 117,696,150 $ 141,221,610 $ 177,790,950 $ 214,886,520 $ 259,807,824

BUSN-460-13255: FINANCE TEAM: EXPENSES
1) EXPENSES ANALYSIS
Total Fixed + Variable Expenses
Direct Expenses Cost per Unit
Direct Expenses % 38.5% 38.2% 37.9% 37.6%
Direct Expenses Total $ 81,000,000
Operating Expenses Cost per Unit $ 27.30 $ 28.60 $ 30.13 $ 31.68 $ 31.92
Operating Expenses % 21.0% 22.0% 23.0% 2

4.0%
Operating Expenses Total $ 24,570,000 $ 30,888,000 $ 40,675,500 $ 51,321,600 $ 62,052,480
Selling and Distribution Expenses Cost per Unit $ 15.60 $ 15.86 $ 16.11 $ 16.50 $ 16.76
Selling and Distribution Expenses % 12.0% 12.2% 12.3% 12.5% 12.6%
Selling and Distribution Expenses Total $ 14,040,000 $ 17,128,800 $ 21,752,550 $ 26,730,000 $ 32,577,552
Marketing Expenses Cost per Unit $ 10.40 $ 9.10 $ 9.17 $ 7.92 $ 7.98
Marketing Expenses % 8.0% 7.0% 6.0%
Marketing Expenses Total $ 9,360,000 $ 9,828,000 $ 12,379,500 $ 12,830,400 $ 15,513,120
R&D Expenses Cost per Unit $ 5.20 $ 5.24 $ 5.28 $ 5.32
R&D Expenses %
R&D Expenses Total $ 4,680,000 $ 5,616,000 $ 7,074,000 $ 8,553,600 $ 10,342,080
Salaries and Wages Expenses Cost per Unit $ 21.50 $ 27.50 $ 28.00
Salaries and Wages Expenses % 16.54% 16.34% 15.53% 15.62% 15.81%
Salaries and Wages Expenses Total $ 19,350,000 $ 22,939,200 $ 27,468,450 $ 33,404,400 $ 40,866,768
Fully loaded Expenses % 100.00%
Total Expenses
Production Units: Peripherials
$ 696,150.00 $ 821,610.00 $ 940,950.00 $ 1,046,520.00 $ 1,255,824.00
100%
Selling and Distribution Cost per Unit
Selling and Distribution Exp %
Selling and Distribution Exp Total
Fully loaded Cost : Peripherials
Total Expenses: Peripherals
Totals Total Direct Expenses
Total Operating Expenses
Total Selling and Distribution Expenses
Total Marketing Expenses
Total R&D Expenses
Total Salaries and Wages
CGS- Validation

Taxes (

SC7

)

15%

34%

+

Of the amount over 100,000

22,250 39%

+ 34% Of the amount over 335,000

113,900 34%

3,400,000 35%

+

Of the amount over 15,000,000

5,150,000 38%

35% 35%

Schedule Year 1 Year 2 Year 3 Year 4 Year 5

SC2 $ 151,247,372 $ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697

SC6 $ 4,680,000 $ 5,616,000 $ 7,074,000 $ 8,553,600 $ 10,342,080

Taxable Income ($) 18,333,333 and up 18,333,333 and up 18,333,333 and up 18,333,333 and up 18,333,333 and up

35% 35% 35% 35% 35%

$ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505

BUSN-460-13255: FINANCE TEAM: TAXES
Taxable Income ($) Tax Rate[21]
0 to 50,000 15%
75,000 to 100,000 $13,750 + 34% Of the amount over 75,000 $ 13,750
100,000 to 335,000 $

22,250 39%
335,000 to 10,000,000 $

113,900
10,000,000 to 15,000,000 $3,400,000 + 35% Of the amount over 10,000,000
15,000,000 to 18,333,333 $

5,150,000 38%
18,333,333 and up
(+) Net Sales
(-) Total Cost of Sales Proforma $ 114,816,150 $ 137,405,610 $ 172,516,950 $ 208,132,920 $ 251,265,744
(-) R&D
(=) EBIT $ 31,751,222 $ 39,814,190 $ 50,442,125 $ 59,130,727 $ 69,372,873
Tax Bracket
Tax %
Tax Amount1 $ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505
Income Tax Expense

ProForma

BUSN-460-13255: FINANCE TEAM: PRO-FORMA STATEMENTS Pro forma Income Statement

Schedule Year 1 Year 2 Year 3 Year 4 Year 5

Revenue Gross Sales SC2

$ 173,385,000 $ 207,819,000 $ 258,255,000 $ 308,448,000 $ 370,137,600 (-) Sales Discounts

SC2

$ 22,055,850 $ 24,885,090 $ 28,099,440 $ 32,483,916 $ 38,980,699 (-) Sales Returns

SC2

$ 81,779 $ 98,110 $ 122,486 $ 146,837 $ 176,204 Net Sales $ 151,247,372 $ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697
(-) Cost of Sale

s (-)Variable overhead

SC5 $ 45,696,150 $ 54,821,610 $ 68,440,950 $ 82,046,520 $ 98,455,824
(-) Marketing Expenses

SC6 $ 9,360,000 $ 9,828,000 $ 12,379,500 $ 12,830,400 $ 15,513,120
(-) Selling and Admin

SC6 $ 14,040,000 $ 17,128,800 $ 21,752,550 $ 26,730,000 $ 32,577,552
(-) Operating Expenses

SC6 $ 24,570,000 $ 30,888,000 $ 40,675,500 $ 51,321,600 $ 62,052,480
(-) Salaries and Wages

SC6 $ 19,350,000 $ 22,939,200 $ 27,468,450 $ 33,404,400 $ 40,866,768
(-) Depreciation

SC4 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000
Total Cost Of Sales

$ 114,816,150 $ 137,405,610 $ 172,516,950 $ 208,132,920 $ 251,265,744
Gross Profit $ 36,431,222 $ 45,430,190 $ 57,516,125 $ 67,684,327 $ 79,714,953 (-) R&D SC6 $ 4,680,000 $ 5,616,000 $ 7,074,000 $ 8,553,600 $ 10,342,080
(=) EBIT $ 31,751,222 $ 39,814,190 $ 50,442,125 $ 59,130,727 $ 69,372,873
(-) Income Tax expense

SC7 $ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505
(=) Net Income $ 20,638,294 $ 25,879,224 $ 32,787,381 $ 38,434,973 $ 45,092,367 Pro Forma Projected Cash flows – Indirect view Schedule Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Investment

SC3 $ 22,259,746

(+) Sales

SC2 $ 151,247,372 $ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697
(-) CGS

SC5 $ 117,696,150 $ 141,221,610 $ 177,790,950 $ 214,886,520 $ 259,807,824
(-) Tax Expense

SC7 $ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505
(=) Net Income

$ 22,438,294 $ 27,679,224 $ 34,587,381 $ 40,234,973 $ 46,892,367 (+) Depreciation

SC4 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000
(=) Net Cash Flow $ (22,259,746) $ 24,238,294 $ 29,479,224 $ 36,387,381 $ 42,034,973 $ 48,692,367

Investment

) to evaluate its business strategy and potential success.

Year Investment (+) Sales (-) CGS (-) Tax Expense

(+) Depreciation

0

$ (22,259,746)

1 $ 151,247,372 $ 117,696,150 $ 11,112,928 $ 22,438,294 $ 1,800,000 $ 24,238,294
2 $ 182,835,800 $ 141,221,610 $ 13,934,967 $ 27,679,224 $ 1,800,000 $ 29,479,224
3 $ 230,033,075 $ 177,790,950 $ 17,654,744 $ 34,587,381 $ 1,800,000 $ 36,387,381
4 $ 275,817,247 $ 214,886,520 $ 20,695,755 $ 40,234,973 $ 1,800,000 $ 42,034,973
5 $ 330,980,697 $ 259,807,824 $ 24,280,505 $ 46,892,367 $ 1,800,000 $ 48,692,367

(ARR)

Depreciation ARR

$ 22,259,746 $ 22,438,294 $ 1,800,000

IRR 35%
Year Investment Cash Flows

0

1 $ 24,238,294

2 $ 29,479,224

3 $ 36,387,381

4 $ 42,034,973

5 $ 48,692,367

$ (22,259,746)

Payback Period
Investment $22,259,746
Payback Period 1.0
Rate of Return

)

PV Inflows $ 72,433,263

$ 22,259,746

PI

BUSN-460-13255: FINANCE TEAM: INVESTMENT ANALYSIS
1) Cashflow Analysis
The identified net cash flow from operations for AINO will be used as input to the financial methods (NVP,

IRR
Projected Net Cashflows from Operations
(=) NET Income (=) Net

Cash Flows
$22,259,746
2)

ARR
“The accounting rate of return (ARR) indicates the profitability of capital expenditures. “ (Shim, Jae K.) Based on this, projects or investments with higher rates of return are more attractive.
Accounting

Rate of Return
Initial Investment Cash inflows
93%
Appying the ARR formula to AINO business mode, we identified a 86% rate
3) NPV
The net present value (NPV) model uses management’s minimum desired rate-of-return, to compute the present value of all net cash inflows. If the result is positive ( the project meets the minimim desired rate of retun), it is eligible for further considerations. If the result is negative, the project is rejected. Thus, higher positive NVP’s are desired.
PV Cash Flows
-$22,259,746
$ 17,954,292
$ 16,175,157
$ 14,789,364
$ 12,655,395
$ 10,859,055
PV Inflows $ 72,433,263
Pv Outflows
Net Present Value $ 50,173,517
4)

Payback Period
The payback period identifies the amount of time it takes to recover the cost of the investment from the net cash flows produced by the business strategy. “This method can be particularly useful if a company has cash flow problems and needs to recover their investment in a relatively short period of time.” (Shim, Jae K.)
Annual Cash Flows (avg) $22,438,294
100.80%
6) Profitability Index
As an additional measurement to ensure that the investment identified will be profitable, a profitability index was completed, using the information compiled as part of the NVP as input to obtain present value of cash inflows and outflows.
Profitability Index (

PI The PI reflects an index of 2.99, which is greater than 1, validating that the investment will be profitable and should increase the value of the business.
PV Outflows
3.25

Payback Period = Initial Investment / Annual Cash Inflow
Payback Period = 1.1

What IF

Forecast NEW

Schedule Year 1 Year 2 Year 3 Year 4 Year 5

UNITS
Tablet Tablet Price SC2 $ 179 $ 179 $ 179 $ 179 $ 179

SC2 20% 25% 20% 20%

SC2 900,000 1,080,000 1,350,000 1,620,000 1,944,000

%

SC2 70% 65% 60% 60% 60%

%

SC2 30% 35% 40% 40% 40%

Peripherals

SC2

$ 30.00 $ 30.00 $ 30.00 $ 30.00

Projected units (Based on Expected Sales %) SC2 409,500 483,300 553,500 615,600 738,720
Units for Indirect Sales Distribution SC2 315,000 351,000 364,500 388,800 466,560
Units for Direct Sales Distribution SC2 94,500 132,300 189,000 226,800 272,160
GROSS SALES $ 173,385,000 $ 207,819,000 $ 258,255,000 $ 308,448,000 $ 370,137,600
Tablet

SC2 $ 161,100,000 $ 193,320,000 $ 241,650,000 $ 289,980,000 $ 347,976,000

$ 80,550 $ 96,660 $ 120,825 $ 144,990 $ 173,988

$ 146,970,900 $ 177,260,670 $ 222,695,325 $ 267,234,390 $ 320,681,268

Peripherals (+) Gross Sales SC2 $ 12,285,000 $ 14,499,000 $ 16,605,000 $ 18,468,000 $ 22,161,600
(-) Projected Discounts $ 8,007,300 $ 8,922,420 $ 9,265,590 $ 9,883,296 $ 11,859,955
(-) Projected Returns $ 1,229 $ 1,450 $ 1,661 $ 1,847 $ 2,216

$ 4,276,472 $ 5,575,130 $ 7,337,750 $ 8,582,857 $ 10,299,429

NET SALES $ 151,247,372 $ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697
(-) Cost of Sale
Tablet Total Fixed Cost

$ 24,570,000 $ 30,888,000 $ 40,675,500 $ 51,321,600 $ 62,052,480

$ 14,040,000 $ 17,128,800 $ 21,752,550 $ 26,730,000 $ 32,577,552

$ 9,360,000 $ 9,828,000 $ 12,379,500 $ 12,830,400 $ 15,513,120

$ 4,680,000 $ 5,616,000 $ 7,074,000 $ 8,553,600 $ 10,342,080

$ 19,350,000 $ 22,939,200 $ 27,468,450 $ 33,404,400 $ 40,866,768

(-) Depreciation $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000
Fixed Cost per Unit $ 80 $ 80 $ 81 $ 82 $ 83
Total Variable Cost $ 45,000,000 $ 54,000,000 $ 67,500,000 $ 81,000,000 $ 97,200,000
Variable Cost $ 50 $ 50 $ 50 $ 50 $ 50

$ 130 $ 130 $ 131 $ 132 $ 133

Cost of Good Sales: Tablet

Peripherals Total Variable Cost $ 696,150 $ 821,610 $ 940,950 $ 1,046,520 $ 1,255,824
Variable Cost $ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70
Cost of Good Sales per Unit $ 1.70 $ 1.70 $ 1.70 $ 1.70 $ 1.70
Cost of Good Sales: Peripherals $ 696,150 $ 821,610 $ 940,950 $ 1,046,520 $ 1,255,824

$ 31,751,222 $ 39,814,190 $ 50,442,125 $ 59,130,727 $ 69,372,873

$ 49.00

$ 28.30 $ 28.30 $ 28.30 $ 28.30

$ 20,638,294 $ 25,879,224 $ 32,787,381 $ 38,434,973 $ 45,092,367

BUSN-460-13255: FINANCE TEAM: FORECAST
Market Growth %
Projected units (Based on Expected Sales %)
Units for Indirect Sales Distribution
Units for Direct Sales Distribution
Peripherals Price $ 30.00
(+) REVENUE
(+) Gross Sales
(-) Projected Discounts $ 14,048,550 $ 15,962,670 $ 18,833,850 $ 22,600,620 $ 27,120,744
(-) Projected Returns
Net Sales: Tablet
Net Sales: Peripherals
$ 73,800,000 $ 88,200,000 $ 111,150,000 $ 134,640,000 $ 163,152,000
(-) Total Operating Expenses
(-) Total Selling and Distribution Expenses
(-) Total Marketing Expenses
(-) Total R&D Expenses
(-) Total Salaries and Wages
Cost of Good Sales per Unit
$ 118,800,000 $ 142,200,000 $ 178,650,000 $ 215,640,000 $ 260,352,000
TOTAL COST OF SALES $ 119,496,150 $ 143,021,610 $ 179,590,950 $ 216,686,520 $ 261,607,824
PROFIT MARGIN (BEFORE TAXES)
Profit margin: Tablet $ 28,170,900 $ 35,060,670 $ 44,045,325 $ 51,594,390 $ 60,329,268
Profit margin per unit: Tablet $ 49.00 $ 48.00 $ 47.00 $ 46.00
Profit margin: Peripherals $ 3,580,322 $ 4,753,520 $ 6,396,800 $ 7,536,337 $ 9,043,605
Profit margin per unit: Peripherals $ 28.30
Total Net Revenue $ 31,751,221.50 $ 39,814,190.10 $ 50,442,124.50 $ 59,130,727.20 $ 69,372,872.64
Estimated Tax $ 11,112,927.52 $ 13,934,966.53 $ 17,654,743.58 $ 20,695,754.52 $ 24,280,505.42
Net Profit
$ 17,243,805 $ 20,276,845 $ 23,445,626 $ 26,237,086 $ 29,321,121

2

>

4 8

Month Sales Forecast

48 Month Sales Forecast

” Tablet

8 Month Sales Forecast

1

Author: Enter Start Month Here.

0 0 0 0 0 0 0 0

1

,1

7

519,167 519,167 519,167

$179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99

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

$93,444,868 $93,444,868 $93,444,868

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

25.00% 25.00% 25.00%

0.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Units

519,167 519,166 519,166 519,166 519,167 519,167 519,167 519,167 519,167 519,167 519,167

Selling Price $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99

Total Sales

$93,444,868 $93,444,688 $93,444,688 $93,444,688 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868

% of Total

8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 100.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Units 519,166 519,166 519,166 519,166 519,167 519,167 519,167 519,167 519,167 519,167 519,167 519,167 6,230,000

Selling Price $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99 $179.99

Total Sales $93,444,688 $93,444,688 $93,444,688 $93,444,688 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $93,444,868 $1,121,337,700

% of Total 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 100.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 1 2 3 4 5 6 7 8 9 10

2013 2014 2015

Units 2,076,668 6,230,000 6,230,000

Total Sales $373,779,473 $1,121,337,700 $1,121,337,700 $0.00
7 1
Fiscal Year 1 2

0 3
Author: This spreadsheet forecasts 4 years of product sales.
The first two key data entries that you need to make are the first fiscal year and the first month of the forecast.
With the first year and month entered, the spreadsheet will automatically enter the remaining years and months. Your next step is to enter the number of units and selling price for each month.
2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Product Name Enter Product Name Here
Units 5 9 6 2,076,668
Selling Price $179.99
Total Sales $0 $93,444,868 $373,779,473
% of Total 0.00% 25.00% 10
market entry
2014
519,166 6,230,000
$93,444,688 $1,121,337,700
8.33%
1 year
2015
Breakeven
11
0000
$0.00

48 Month Sales Forecast
Units 2013 2014 2015 0 2076668 6230000 6230000 0 Total Sales 2013 2014 2015 0 373779473.31999999 1121337700.0000002 1121337700.0000002 0

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