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
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
>Break Even (SC )
-1 2 5
: FI NCE TEAM BREAK-EVEN ANALYSIS
913/break-even-sales-volume
Margin
.
IN – VOLUME
minus Sales Discounts and Sales Returns and Sales Allowances = .
9
.00
Per Unit .00
Per Unit .00
.00
Per Year : Discounts + Returns
Per Year SC2 – Per Year .00
Fixed cost
.00
AINO Selling Price Per Unit $ 179.00 Units Produced Per Year 900,000 SC2 Contribution Margin (Per Unit) $ 129 (Fixed cost * Units Produced)
86,129,100 AINO Selling Price Per Unit $ 179.00 Per Year $ 14,129,100.00 SC2 Units Produced Per Year 900,000 SC2 66% Total Fixed cost (Per Unit) $ 96 66% 5,791
,000
3,686
,000
900,000 $ 151,247,372 http://www.forresidentialpros.com/article/10348913/break-even-sales-volume $ 20.59 $ 20.59 $ 20.59 $ 20.59 Schedule 1 $ 179 $ 179 $ 179 $ 179 $ 179 Growth per year
20% 20% 60% 60% $ 158.42 $ 158.42 $ 158.42 $ 158.42 ,000
,000
40% 40% $ 179.00 $ 179.00 $ 179.00 $ 179.00 $ 179.00 ,000
,000
450 540 675 810 972 $ 1,080,000 $ 1,512,000 $ 2,160,000 $ 2,592,000 $ 3,110,400 $ 80,550 $ 96,660 $ 120,825 $ 144,990 $ 173,988 $ 30 $ 30 $ 30 $ 30 $ 4.58 $ 4.58 $ 4.58 $ 4.58 50% 40% 40% 35% 35% 35% 35% 35% 94,500 41 48 55 62 $ 1,229 $ 1,450 $ 1,661 $ 1,847 $ 2,216 $ 151,247,372
2
–
1
BUSN-
4
6
0
3
5
NA
1) BREAK-EVEN DEFINITION
http://www.forresidentialpros.com/article/103
48
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
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
UNITS
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
Net Sales
Selling Price
Per Unit
$ 1
7
Variable Overhead
$ 50
Fixed Overhead
$ 80
Fixed Overhead
Per
Year
$ 72,000,000
Fixed Selling and Administrative
$ 14,129,100.00
SC2
Units Produced
900,000
Units in beginnig finished goods
Units Sold
850,000
Selling Price
$ 179
Variable cost (Per Unit)
$ 50.00
Total
$
86,129,100
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
Production Activity Unit of Measure Qty/ Amount Schedule
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 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 Ratio
0.72
Total Fixed Cost
Break-even Point
$ 119,512,472
Total fixed costs+Target profit/Contribution Margin Ratio
Identify in Months
BREAK-EVEN POINT
Production Activity Unit of Measure Qty/ Amount Schedule
Variable Overhead Per Unit $ 50.00
Fixed Overhead Per Unit $ 80.00
Fixed Overhead Per Year $ 72,000,000.00
Discounts & Returns
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
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
M5
375,000
$ 63,019,738
M6
450
$ 75,
62
M7
525,000
$ 88,227,633
M8
600,000
$ 100,831,581
M9
675
$ 113,435,529
M10
750,000
$ 126,039,476
M11
825,000
$ 138,643,424
M12
M13
M14
M15
M16
SalesBudget (SC2)
BUSN-460-13255: FINANCE TEAM: SALES BUDGET
1.Sales Analysis using Market Growth, Direct, Indirect Sales & Discounts
$ 20.59
Factors
Year 1
Year 2
Year 3
Year 4
Year 5
Tablet
Marketing & Sales –
Tablet Price
USING INFORMATION FROM SALES TEAM
Marketing & Sales Dept Projected Sales
20%
25%
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%
The goal is to reduce indirect sales
Indirect Sales Price ( Discount Applied – Retail Discount)
11.5%
$ 158.42
Indirect Sales Projected Units
630,000
702,000
810
972
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%
Direct Sales Price
Direct Sales Projected Units
270,000
378,000
540
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
$ 11
3,400,000
$ 136,080,000
Projected Sales Return Units
0.05%
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
(-) Total Projected Sales Returns: Tablet
(=) Net Sales (Tablet)
$ 146,970,900
$ 177,260,670
$ 222,695,325
$ 267,234,390
$ 320,681,268
Peripherals
Peripherals package Price
$ 30
Peripherals package Price for indirect distribution
$ 4.58
85%
Peripherals sales % for indirect distribution
50%
45%
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
Peripherals units – direct distribution
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%
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
(=) Net Sales (Peripherals)
$ 4,276,472
$ 5,575,130
$ 7,337,750
$ 8,582,857
$ 10,299,429
(=) TOTAL
NET SALES
$ 182,835,800
$ 230,033,075
$ 275,817,247
$ 330,980,697
2.Sales Forecast
NET SALES FORECAST
Year 1 Year 2 Year 3 Year 4 Year 5
FORECAST
Item Year 1 Year 2 Year 3 Year 4 Year 5
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
)
Appendix
Appendix
Appendix
Appendix
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
(
)
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
)
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
)
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
)
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
Schedule Year 1 Year 2 Year 3 Year 4 Year 5
SC2
SC2
s
SC5 $ 45,696,150 $ 54,821,610 $ 68,440,950 $ 82,046,520 $ 98,455,824
SC6 $ 9,360,000 $ 9,828,000 $ 12,379,500 $ 12,830,400 $ 15,513,120
SC6 $ 14,040,000 $ 17,128,800 $ 21,752,550 $ 26,730,000 $ 32,577,552
SC6 $ 24,570,000 $ 30,888,000 $ 40,675,500 $ 51,321,600 $ 62,052,480
SC6 $ 19,350,000 $ 22,939,200 $ 27,468,450 $ 33,404,400 $ 40,866,768
SC4 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000
$ 114,816,150 $ 137,405,610 $ 172,516,950 $ 208,132,920 $ 251,265,744
SC7 $ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505
Investment
SC3 $ 22,259,746
SC2 $ 151,247,372 $ 182,835,800 $ 230,033,075 $ 275,817,247 $ 330,980,697
SC5 $ 117,696,150 $ 141,221,610 $ 177,790,950 $ 214,886,520 $ 259,807,824
SC7 $ 11,112,928 $ 13,934,967 $ 17,654,744 $ 20,695,755 $ 24,280,505
SC4 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000 $ 1,800,000
Investment
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
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 |
> 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%
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 $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 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 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 % 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% 48 Month Sales Forecast
4
8
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
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Units
519,166
6,230,000
Total Sales
$93,444,688
$1,121,337,700
% of Total
8.33%
1 year
2015
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
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
Breakeven
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 1 2 3 4 5 6 7 8 9 10
11
2013 2014 2015
0000
Units 2,076,668 6,230,000 6,230,000
$0.00
Total Sales $373,779,473 $1,121,337,700 $1,121,337,700 $0.00
Units 2013 2014 2015 0 2076668 6230000 6230000 0 Total Sales 2013 2014 2015 0 373779473.31999999 1121337700.0000002 1121337700.0000002 0