7. Financial Plan
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7. Financial Plan |
7.1 Highlights of results
7.1.1. Income statement
| Year | 2000 | 2001 | 2002 | 2003 | 2004 |
| Net Sales | 935,476 | 7,115,474 | 5,870,898 | 7,776,928 | 12,470,861 |
| Cost of Goods | 412,661 | 1,421,619 | 1,286,864 | 1,754,950 | 2,320,684 |
| Gross margin % | 55.98 | 80.02 | 78.08 | 77.43 | 81.39 |
| Net income after tax | 40,651 | 2,902,627 | 2,430,598 | 3,280,708 | 5,949,583 |
| Net income % of sales | 4.35 | 40.79 | 41.4 | 42.19 | 47.71 |
7.1.2. Balance Sheet
| Year | 2000 | 2001 | 2002 | 2003 | 2004 |
| Current Assets | 391,319 | 2,084,052 | 1,996,374 | 1,274,252 | 12,143,432 |
| Fixed Assets | 513,625 | 756,254 | 1,105,168 | 1,719,225 | 1,074,940 |
| Total Assets | 1,004,944 | 2,940,306 | 3,201,543 | 3,093,477 | 3,318,372 |
| Total Liabilities | 64,472 | 234,446 | 174,564 | 207,553 | 284,459 |
| Net worth | 940,472 | 2,705,859 | 3,026,978 | 2,885,924 | 3,033,913 |
7.1.3. Cashflow
| Year | 2000 | 2001 | 2002 | 2003 | 2004 |
| Cash from Operations | 2,04,283 | 3,165,687 | 844,515 | 3,949,482 | 6,593,869 |
| Net Cashflow | 242,447 | 1,301,507 | 1,357,439 | 449,269 | 830,039 |
| Dividends | - | 1,137,239 | 2,109,479 | 3,421,762 | 5,801,595 |
7.2 Key assumptions
Inflation
We have not attempted to incorporate inflation 'in our projections. Although there will undoubtedly be inflation in Thailand, it will not have any major or predictable impact on our business. All costs are shown in real 1999 amounts.
Currency
Our working financial plans were produced 'in US dollars, the currency in which most revenues will occur and many costs will occur. Capital equipment costs will be 'incurred in baht, affected by any change in the baht : dollar exchange rate. We have assumed a conservative rate of 3 5 : 1, which applied for most of the first quarter of 1999.
Personnel Costs
All personnel costs show a real increase of 8% per year, reflecting our need to reward our workers exceptionally well in order to keep their performance at levels that will hold waste and defects to absolute minimums. This again is the highest expense that can reasonably be projected.
Key Equipment Costs
All KS loom models will be made in Thailand. As the installed base grows, we expect a decrease in unit cost ultimately reaching 20%.
Capacity Utilization
As operation of a KS loom is essentially similar to running a large production loom, we anticipate no learning delays wherever experienced skilled labor is concerned. There is practically no need to allow for downtime, so the only important consideration 'in capacity planning is the uncertainty of order flow. For our Bangkok sample center, we have planned a two-shift operation, with 30% excess capacity; this would be able to handle 195% of forecast volume on a three-shift basis. For licensees, we have projected capacity enough to meet forecast requirements plus 30% on a single shift. We will be able to confirm whether or not these allowances are enough to meet our service standards during the period when we are selling only in Thailand, with capacity for the US launch already installed.
7.3 Sources and uses of funds
| YEAR | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 |
| Sources of Funds | ||||||
| Initial capital - founders | 510,000 | 0 | 0 | 0 | 0 | 0 |
| Investors | 0 | 490,000 | 0 | 0 | 0 | 0 |
| TOTAL | 510,000 | 490,000 | 0 | 0 | 0 | 0 |
| Uses of Funds | ||||||
| Deposit for buildings | 14,286 | 0 | 0 | 0 | 0 | 0 |
| Machinery | 91,429 | 502,857 | 497,143 | 754,286 | 1,274,286 | 0 |
| Factory Equipment | 37,143 | 14,286 | 0 | 0 | 0 | 0 |
| Patents | 100,000 | 0 | 0 | 0 | 0 | 0 |
| Office Furniture | 28,571 | 4,571 | 0 | 0 | 0 | 0 |
| Vehicles | 33,714 | 12,857 | 0 | 0 | 0 | 0 |
| Pre-operating Expenses | 42,730 | 0 | 0 | 0 | 0 | 0 |
| TOTAL | 347,873 | 534,571 | 497,143 | 754,286 | 1,274,286 | 0 |
7.4 Performance and Sensitivity Analysis
7.4.1 Ratios
| Ratio | 2000 | 2001 | 2002 | 2003 | 2004 |
| Current Ratio | 6.07 | 8.89 | 11.44 | 6.14 | 7.54 |
| Debt: Equity | 0.07 | 0.09 | 0.06 | 0.07 | 0.09 |
| Return on Equity % | 4.32 | 107.27 | 80.3 | 113.68 | 196.1 |
7.4.2 NPV Sensitivity Analysis (US$)
| NPV | IRR | |||
| CASES | Revenue | Expenses | Revenue | Expenses |
| 15% increase | 5,170,743 | 3,847,627 | 201.15 | 159.57 |
| 10% increase | 4,868,618 | 3,989,980 | 193.18 | 165.39 |
| 5% increase | 4,566,241 | 4,128,479 | 184.73 | 170.90 |
| Base Case | 4,263,865 | 4,263,865 | 176.14 | 176.14 |
| 5% decrease | 3,961488 | 4,399,250 | 167.42 | 181.42 |
| 10% decrease | 3,657,146 | 4,530,055 | 158.36 | 186.73 |
| 15% decrease | 3,348,376 | 4,669,486 | 148.73 | 192.08 |
| 20% decrease | 3,039606 | 4,804,292 | 138.96 | 197.46 |
Sensitivity Analysis
Change
| Fabrica Co., Ltd. | ||
| Table of Contents | Appendices | |
|
0. Executive Summary 1. Company 2. People 3. Product 4. Market 5. Marketing Strategy 6. Operations Strategy 7. Financial Plan 8. The Deal |
Sample Production Costs Glossary of Terms Patentable Features Sample Order Flow Financial Assumptions Investment Structure Yearly Income Statement Yearly Cash Flow Yearly Balance Sheet Monthly & Quarterly | |
| Proprietary to Fabrica Co., Ltd. | ||