7. Financial Plan
7.1 Highlights of results
7.1.1. Income statement
|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
|Cash from Operations||2,04,283||3,165,687||844,515||3,949,482||6,593,869|
7.2 Key assumptions
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.
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.
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%.
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
|Sources of Funds|
|Initial capital - founders||510,000||0||0||0||0||0|
|Uses of Funds|
|Deposit for buildings||14,286||0||0||0||0||0|
7.4 Performance and Sensitivity Analysis
|Return on Equity %||4.32||107.27||80.3||113.68||196.1|
7.4.2 NPV Sensitivity Analysis (US$)
|Fabrica Co., Ltd.|
|Table of Contents||Appendices|
0. Executive Summary|
5. Marketing Strategy
6. Operations Strategy
7. Financial Plan
8. The Deal
Sample Production Costs|
Glossary of Terms
Sample Order Flow
Yearly Income Statement
Yearly Cash Flow
Yearly Balance Sheet
Monthly & Quarterly
|Proprietary to Fabrica Co., Ltd.|