Protech Company Business - Essay Example

Zayed College of Business Sciences EMBA Program Business Plan for "PROTECH" Company Done by: Title: Academic Year: Index Index 2 History of the Firm 5 Market Assessment 8 Firm's performance after 3 quarters 9 Marketing Strategy 10 Manufacturing Strategy 10 Human Resources Strategy Plan 11 Financial Strategy 11 Tactical Plan 12 Requirements from Venture Capital 12 Annexure 1 Responsibilities 13 Annexure 2 (12-month potential demand) 13 Annexure 3 Specifications of Pro100 13 Annexure 4 Up to Date Financial Statements 14 Annexure 5 Balanced Score Cards 17 Annexure 6 Tactical Plan 22 Executive Summary "PROTECH" company was established in the first quarter targeting different PC market segments. Both web offices and block-and-mortal sales offices are used as the sales channels. The management structure is organized as follows: Responsibilities President-Overall Leadership VP-Marketing VP-Marketing Research VP-Sales Management VP-Accounting and Finance VP-Manufacturing VP-Human Resources Please see annexure 1 for the persons responsible for each function. Some of the on-going challenges that are facing Protech are the uncertain demand and the unpredictable strategies and plans of other competitors. Basically, Protech strives to achieve value for clients by customization. This is evident through our success in the "mercedes" segment for which pricing and brand perception have rated highly in market research. Management is looking at all aspects and important issues through different market research data and through Balanced Score Cards (which is considered as excellent metrics tool for measuring the overall performance) in order to make better decisions to enhance performance in the future. Please refer to annexure 4 for more details on the financial situation. Currently, Protech has 2 brands for different segments. The PC industry is at the stage where demand is expected to boom at an unprecedented rate. Market is very attractive because products are just being introduced. Furthermore, there are so many new technologies and the need for new PCs is always increasing. There are so many strengths that we need to leverage on, and so many opportunities that we can seize. At the same time weaknesses and threats are required also to be re-evaluated along with correction action plans. Management is thinking to create another brand for "travelers", enhancing the advertisements for Pro10, and hiring more sales force and factory workers. At this stage Image is in need for the following financing resources: 1. VC money as equity (4,000,000) which will be spent on marketing and human resources. 2. Bank loan (1,500,000) which will be used to repay our emergency loans. The benefit of the investment to VC will be in the form of return on investment. History of the Firm "Protech" Company was established in quarter 1 to introduce a new line of microcomputers into Asia, United States, Canada and Europe. Management team was established to perform different responsibilities. Please see annexure 1 for the vice presidents in charge of each function. The mission of Protech is to empower our clients to work effectively by innovation and building enhanced technologies tailored specifically to meet our customers' needs, with high realization gains to our shareholders and keeping in mind the community. Our target markets are smaller, high margin segment, i.e. Workhorse and Mercedes, in the largest and more expensive geographic markets. Its factory was built in the first quarter in Toronto and started with production capacity of 25 units per day. Two sales offices were established in the same quarter. One is an electronic web center and the other one was a brick-and-mortal sales office in New York. This city was chosen due to its relatively high potential demand compared with other cities based on our market research. Please see annexure 2 for 12 month potential demand in different cities. One of the most important decisions in 1st quarter was brand design that will attract the target customers. Pro100 was designed. Please refer to annexure 3 for its specifications. In quarter 2, the firm has been organized and the business is in full swing. The management team makes the following decisions: A compensation package more attractive than that of the industry was designed to attract sales force and factory workers as market research indicated that both our target markets value competent human sales representative support and "mercedes" values performance and technology. World Market, our online web business, was listed with the major search engines. A toll-free phone number was set up to advise customers in the decision making process and for handling service calls. Investments were also made on World Market to continuously improve its content, visual appeal, and navigation. The margin for "mercedes" is set at 12% while that for "workhorse" is set at 17%. An advertisement for each brand was developed along with media choice. Production of the brands was planned. Test market results from quarter 2 indicated that Protech's market shares are 15% and 4% respectively for "workhorse" and "mercedes". Though the market share for our target markets are low, interestingly, the test market results reveal the emergence of a new market, "travelers". Protech comes in second in the market share for "travelers" at 27%. Due to our strategy of product differentiation and high margin, Protech generated revenue of 450,500 in quarter 2. However, due to the setup costs of the business, the firm went into the red for net profit. Please see annexure 4 for detailed financial results. Please also see annexure 5 for details of the Balanced Score Cards that reveals the total business performance. However, all required attention in advertisement, brand selection, workers compensation, etc. was given in preparation for the next test market. The second test market from quarter 3 revealed the following: The market share for Protech in the "workhorse" segment declined from 15% to 6% The market share for Protech in the "mercedes" segment increased from 4% to 8% The market share for Protech in the "travelers" segment sharply falls from 27% to 1%. Please refer to annexure 7 for the latest Balanced Score Cards that show below average financial performance due to investment in the future, such as sales office and web center expenses. No lost customers for unmet demand (no ill will). We are in quarter 4, which is very strong in terms of high competition and requires critical decisions. From the assessment of the last quarter and forecasting of the next quarters the firm has much to improve on and now is the best opportunity for the firm to make a comeback. Though we have weak cash flow, the management team is confident of its abilities to turn around the situation after assessing our strengths, weaknesses, opportunities, and threats. Therefore, we are in the process of preparing our business plan to obtain 4,000,000 as capital from the venture capitalist along with any loans that might be required in the future. Market Assessment In order to have in-depth market assessment, the following SWOT analysis was carried out: Strengths: Strong human resource management. Pro100X ranked second in brand judgement for the "workhorse segment". Pro10 has received excellent price judgment from the "workhorse" segment and the "traveler" segment. Weaknesses: Weak financial performance. Lowest activity ratios in the industry. Highest leverage ratios in the industry, including an emergency loan. Negative net profit. Weak market demand. Lowest market share in quarter 3 for all 3 segments. Marketing effectiveness. No marketing appeal. Pro10 suffers poor ranking in brand judgement in all 3 sectors. Pro100X has obtained poor price judgment in the "workhorse" segment. Investment in future. Wealth. Asset management. Opportunities: The demand for the "workhorse" and "mercedes" segments more than triples from quarter 2 to quarter 3. The demand for "travelers" has increased more than 4 times from 141 in quarter 2 to 733 in quarter. However, its market demand is still lacking behind that of "mercedes" segment though it has a larger market. Therefore, we expect "travelers" to boom in the coming quarters. Only ePower is operating in the Tokyo market. Only micro-x is operating in the Toronto market. Threats: Competitive market in New York, as all 5 competitors are operating in the same market. Short life cycle of PCs, that will lead to stock obsolescence The mentioned-above SWOT analysis gives a good assessment for firm and market. Firm's performance after 3 quarters Market performance: Demand and market share: We have the lowest market share in the industry for all 3 sectors. However, our marketing research shows that market share does not equal profitability. Customer satisfaction: 1. Pro100X is ranked second in brand judgement for the "workhorse" segment. Pro10 suffers poor ranking in brand judgement in all three segments 2. Pro10 has received excellent price judgment from the "workhorse" segment and the "traveler" segment. Pro100X has poor price judgement in the "workhorse" segment. 3. No customers are lost due to product stock out. This shows the reliability of our products. Financial performance: Although we had revenue of 1,187,608 in the last quarter, but due to sales office and web center expenses, we ended with no balance cash at this quarter. Besides, there is a need to improve sales so as to improve our financials. Marketing Strategy In order to enhance, improve and enter new marketing horizons, the following strategy will be considered and implemented: Features of the product will be streamlined to better suit the target segment "workhorse". In the previous quarters, we have invested in R&D for a number of "traveler" features. So we shall design a new brand ProLight for this segment. Advertisement for Pro10 targeted at the "workhorse" will be improved. Apparently, customers are satisfied with the price but not the brand. This is especially important in light of the importance of brand to "workhorse". Status quo for "mercedes", as it is performing up to par in terms of both pricing and brand. Pricing was based on cost of goods sold, expenses and 12% profit for "mercedes" and 17% for "workhorse". No changes will be done to the web productivity because the options chosen earlier represent the best options. Demand of the current quarter is estimated to be 825 for "workhorse", 1,900 for "mercedes", and 500 for "traveler". Manufacturing Strategy Based on forecasted demand for each brand on the market, available inventory and by adjusting the business strategy it was decided to implement the following production strategy: Inventory is targeted to be all the time at the minimum (zero if possible). Rebate to be utilized whenever is required. Workers packages will remain the same as our firm has one of the best in human resource management Demand forecast will be adjusted to meet the 75% productivity of the workers. Demand of the current quarter is estimated to be 825 for "workhorse", 1,900 for "mercedes", and 500 for "traveler". Production was adjusted to reflect that along with the current stock. We assumed that demand will boom to reflect the full market potential as reflected by our market research. Human Resources Strategy Plan Sales forces will be given the following compensations: Salary 40,000 Full health coverage 3 weeks of yearly vacations 5% contribution to the pension Factory workers will be given the following compensations: Salary 20,000 Full health coverage 3 weeks of yearly vacations 8% contribution to the pension Financial Strategy As part of improvement the following financing strategy is required to be implemented: Financing sources for this business plan is based on the following: 4,000,000 will be obtained from VC Tactical Plan Please refer to annexure 6 for the details of the tactical plan. It is clear that we are going to increase our production capacity along with the number of sales people. However, for planning purposes, the plant capacity will not be fully utilized. But if demand is expected to grow, then our plant will use the spare capacity. Requirements from Venture Capital In order to meet the profit in this business plan and also to the benefit of the VC, the VC is kindly requested to participate in financing Protech Company by 4,000,000. Annexure 1 Responsibilities Responsibilities Officer Name Primary Responsibility Secondary Responsibility May Al Badi VP-Marketing VP-Marketing Research Mubarak Almansoori VP-Human Resources VP-Sales Management Mohamed Al Hajeri VP-Accounting and Finance VP-Manufacturing Annexure 2 (12-month potential demand) 12 month potential demand Workhhorse Mercedes Total Paris 12,624 6,317 18,941 New York 11,205 8,413 19,618 Toronto 9,552 4,437 13,989 Tokyo 9,860 7,022 16,882 Annexure 3 Specifications of Pro100 Specifications Pro100 Base components X Rugged portable design X Digital video disk (DVD) drive X High capacity hard drive X Office software-word, spreadsheets X Presentation software X Database software X Bookkeeping, budgeting software X Engineering design tools X Manufacturing control tools X 13" flat screen for portable X High performance power/speed X Enhanced keyboard with hot keys X Local network/internet connection X 3-hour battery for portable X Windows for network/internet X Annexure 4 Up to Date Financial Statements Balance Sheet Quarter 1 Quarter 2 Quarter 3 Current Assets Cash 850,000 502,918 1 + 3 Month Certificate of Deposit 0 0 0 + Finished Goods Inventory 0 729,385 1,460,806 Long Term Assets + Net Fixed Assets 600,000 575,000 1,651,042 = Total 1,450,000 1,807,303 3,111,849 Debt Conventional Bank Loan 0 0 0 + Emergency Loan 0 0 1,239,705 Equity + Common Stock 2,000,000 3,000,000 4,000,000 + Retained Earnings -550,000 -1,192,697 -2,127,855 = Total 1,450,000 1,807,303 3,111,849 Income Statement Quarter 1 Quarter 2 Quarter 3 Gross Profit Revenues 0 450,500 1,187,608 - Rebates 0 4,920 4,095 - Cost of Goods Sold 0 180,417 707,359 = Gross Profit 0 265,163 476,154 Expenses Research and Development 60,000 60,000 60,000 + Advertising 0 156,176 264,015 + Sales Force Expense 0 217,551 176,242 + Sales Office and Web Center Expenses 490,000 290,000 670,000 + Marketing Research 0 15,000 15,000 + Shipping 0 8,194 14,016 + Inventory Holding Costs 0 72,939 146,081 + Depreciation 0 25,000 23,958 + Web Marketing Expenses 0 63,000 42,000 = Total Expenses 550,000 907,860 1,411,312 Operating Profit -55,000 -642,697 -935,158 Miscellaneous Income and Expenses + Licensing Income 0 0 0 - Licensing Fees 0 0 0 + Other Income 0 0 0 - Other Expenses 0 0 0 = Earnings Before Interest and Taxes -55,000 -642,697 -935,158 + Interest Income 0 0 0 - Interest Charges 0 0 0 = Income Before Taxes -55,000 -642,697 -935,158 - Loss Carry Forward 0 0 0 = Taxable Income 0 0 0 - Income Taxes 0 0 0 = Net Income -55,000 -642,697 -935,158 Earnings per Share -28 -21 -18 Cash Flow Quarter 1 Quarter 2 Quarter 3 Beginning Cash Balance 0 850,000 502,918 Receipts and Disbursements from Operating Activities Revenues 0 450,500 1,187,608 - Rebates 0 4,920 4,095 - Production 0 909,803 1,438,781 - Research and Development 60,000 60,000 60,000 - Advertising 0 156,176 264,015 - Sales Force Expense 0 217,551 176,242 - Sales Office and Web Center Expenses 490,000 290,000 670,000 - Marketing Research 0 15,000 15,000 - Shipping 0 8,194 14,016 - Inventory Holding Costs 0 72,939 146,081 - Web Marketing Expenses 0 63,000 42,000 - Income Taxes 0 0 0 + Interest Income 0 0 0 - Interest Charges 0 0 0 + Licensing Income 0 0 0 - Licensing Fees 0 0 0 + Other Income 0 0 0 - Other Expenses 0 0 0 = Net Operating Cash Flow -550,000 -1,347,083 -1,642,622 Investing Activities Fixed Plant Capacity 600,000 0 1,100,000 = Total Investing Activities 600,000 0 1,100,000 Financing Activities Increase in Common Stock 2,000,000 1,000,000 1,000,000 + Borrow Conventional Loan 0 0 0 - Repay Conventional Loan 0 0 0 + Borrow Emergency Loan 0 0 1,239,705 - Repay Emergency Loan 0 0 0 - Deposit 3 Month Certificate 0 0 0 + Withdraw 3 Month Certificate 0 0 0 = Total Financing Activities 2,000,000 1,000,000 2,239,705 Cash Balance, End of Period 850,000 502,918 1 Industry Financial Ratios Ratio Calculation Protech Highest Lowest Average Liquidity Ratios Current Liquidity Ratio (Cash + 3 Month Certificate of Deposit + Finished Goods Inventory) / Conventional Bank Loans Not Available Not Available Not Available Not Available Quick Liquidity Test Ratio (Cash + 3 Month Certificate of Deposit) / Conventional Bank Loans Not Available Not Available Not Available Not Available Activity Ratios Inventory Turnover Cost of Goods Sold / Finished Goods Inventory 0.5 5.8 0.5 2.8 Fixed Assets Turnover Revenues / Net Fixed Assets 0.7 3.5 0.7 2 Total Assets Turnover Revenues / Total Assets 0.4 1.2 0.4 0.9 Leverage Ratios Debt Ratio (Loans / Total Assets) * 100 39.8 39.8 0.0 15.7 Debt to Paid In Capital (Loans / (Commmon Stock + Preferred Stock + Retained Earnings) ) * 100 66.2 66.2 0.0 25.8 Profitability Ratios Gross Profit Margin (Gross Profit / Revenues) * 100 40.7 57.0 34.5 47.5 Net Profit Margin (Net Income / Revenues) * 100 -78.7 14.6 -78.7 -24.8 Return on Assets (Net Income / Total Assets) * 100 -30.1 17.2 -35.6 -16.0 Return on Paid In Capital (Net Income / (Commmon Stock + Preferred Stock + Retained Earnings) ) * 100 -50.0 17.2 -50.0 -23.5 Annexure 5 Balanced Score Cards Industry results for quarter : 2 Minimum Maximum Average Protech Total Overall 0.00 0.00 0.00 0.00 Financial Performance -19.42 -10.72 -15.11 -19.42 Market Performance 0.10 0.37 0.23 0.10 Marketing Effectiveness 0.48 0.68 0.61 0.48 Investment in Future 2.35 9.91 5.51 2.35 Wealth 0.39 0.61 0.54 0.60 Human Resource Management 0.60 0.81 0.68 0.76 Asset Management 0.01 0.21 0.09 0.05 Here are the results of your company's performance during the previous quarter. This scorecard will be used to measure your firm's performance in comparison to the other firms participating in the exercise. The final evaluation will be based upon your performance during the last four (4) quarter of play. First segment: Mercedes Second segment: Workhorse Total Business Performance = -19.42 * 0.10 * 0.48 * 2.35 * 0.60 * 0.76 * 0.05 = 0.00 Financial Performance = -19.42 Market Performance = 0.10 Marketing Effectiveness = 0.48 Investment in Future = 2.35 Wealth = 0.60 Human Resource Management = 0.76 Asset Management = 0.05 If one of the performance measures is less than zero, then the total overall performance measure will be zero. Total Business Performance. The Total Business Performance indicator is a quantitative measure of the executive team's ability to effectively manage the resources of the firm. It considers both the historical performance of the firm as well as how well the firm is positioned to compete in the future. As such, it measures the action potential of the firm. The index employs what is called a balanced scorecard to measure the executive team's performance. The most important measure is the team's financial performance, and thus its ability to create wealth for the investors. However, the focus on current profits has caused many executives to stress the present at the expense of the future. The long-term viability of the firm requires that the executive team be good at managing not only the firm's profitability, but also its marketing activities, production operations, human resources, cash, and financial resources. The management team must also invest in the future. These expenses might depress the current financial performance, but are vital to creating new products, markets, and manufacturing capabilities. In short, top managers must be good at managing all aspects of the firm. The balanced scorecard puts this perspective into practice. It focuses attention on multiple performance measures, and thus multiple decision areas. None can be ignored or downplayed. The best managers will be strong in all areas measured. The Total Business Performance measure is computed by multiplying seven indicators of business performance. This model underscores the importance of all measures. This is because any strength or weakness will have a multiple effect on the final outcome, the Action Potential of the Firm. The following is a summary of the measure of the firm's Total Business Performance and its key performance indicators. The computational details follow. Financial Performance measures how well the executive team has been able to create profits for its shareholders. A positive number is always desired and the larger the better. It is computed in three steps. First, the net profit from operations is computed by taking the operating profit shown in the income statement and adding back investments in the future that are expensed in the current quarter. It measures how well the managers are able to create revenue from the current quarter's marketing, sales and manufacturing activities. Note that the income statement includes expenditures for R&D, new sales offices and quality control. However, this money is spent to create future business opportunities. Thus, these expenses are added back to the operating profit so that the financial performance measure is entirely focused on current quarter revenues and expenses. Second, the total number of shares of stock is computed by adding all forms of equity investment. If an emergency loan has been taken out, shares of stock will automatically be issued to the loan shark and they become a permanent part of the equity financing. Third, the net profit from current operations is divided by the number of shares of stock issued to determine the net profit from current operations per share of stock. financial performance = net profit from current operations / total shares issued = -582,697 / 30,000 = -19.42 net profit from current operations = operating profit + investments in firm's future = -642,697 + 60,000 = -582,697 operating profit: -642,697 investments in firm's future = 0 + 60,000 = 60,000 cost to open new sales offices and new web center: 0 R&D investment in new brand features and new brands: 60,000 total shares issued: 30,000 number of shares issued to executive team: 30,000 number of shares issued to venture capitalists: 0 number of shares issued to loan shark: 0 Market Performance is a measure of how well the managers are able to create demand in their primary and secondary segments. The firm's market share in two target segments is used to measure this demand creation ability. The market share score is adjusted downwards if there were any stock outs. This penalty for stock outs is to underscore two points. First, unnecessary resources have been spent to generate more demand than can be satisfied. Second, ill will has been created by having potential customers become frustrated when they do not find the products that they have been persuaded to buy. The score ranges from 0 to 1.0 and will depend upon the number of competitors. If there are 3 firms, a good score would be greater than 0.5. If there are 8 teams, a good score would be greater than 0.35. market performance = average market share in targeted segments/100 * percent of demand actually served/100 = (10/100) * (100/100) = 0.10 average market share in target segments = (4 + 15)/2 = 10 market share in first segment: 4 market share in second segment: 15 percent of demand actually served = ((137 - 0) / 137) * 100 = 100 total net demand after ill will: 137 number of stock outs: 0 Marketing Effectiveness is a measure of how well the managers have been able to satisfy the needs of the customers as measured by the quality of their brands and ads. Customer perceptions of the firm's brands and ads in its primary and secondary segments are used to measure customer satisfaction. The two scores are then averaged to obtain the indicator for marketing effectiveness. The score ranges from 0 to 1.0. A good score would be greater than 0.8 marketing effectiveness = [average brand judgment/100 + average ad judgment/100]/2 = [47/100 + 50/100]/2 = 0.48 average of best brand judgments in target segments = (38 + 55)/2 = 47 highest brand judgment in first segment: 38 highest brand judgment in second segment: 55 average of best ad judgments in target segments = (51 + 48)/2 = 50 highest ad judgment in first segment: 51 highest ad judgment in second segment: 48 Investments in the Firm's Future reflect the willingness of the executive team to spend current revenues on future business opportunities. They are necessary but risky. In the short-term, these expenditures can cause large negative profits on the income statement. As a result, the retained earnings may become highly negative, thus indicating that a substantial portion of the stockholder's investment has disappeared into the operations of the firm. In the long-term, these investments are absolutely necessary if the firm is to be competitive. Thus, there is a need to balance the loss of stockholder's equity against investments which could create even greater returns for the investors in the future. The score is always greater or equal to 1.0 and a good score would be greater than 3.0. investments in the firm's future = (current expenditures that benefit firms future / net revenues) * 10 + 1 = (60,000 / 445,580) * 10 + 1 = 2.35 current expenses that benefit firm's future = 0 + 60,000 + 0 = 60,000 cost to open new sales offices and new web regional centers: 0 R&D investment in new brand features and new brands: 60,000 R&D licenses: 0 net revenue = 450,500 - 4,920 + 0 = 445,580 sales revenue: 450,500 rebates: 4,920 interest income: 0 Creation of Wealth is a measure of how well the executive team has been able to add wealth to the initial investments of the stockholders. During the start-up phase of the company, it is expected that the initial stockholders' investments will be used to create new brands, open sales offices, conduct R&D on new brand features and make process improvements in the factory. Expenses will greatly exceed revenues leading to large losses and retained earnings figures that are largely negative. To compute the creation of wealth measure, the net equity of the firm is first computed by adding the retained earnings to the total of the investments from all of the stockholders. The retained earnings figure is the sum of all profits from the inception of the firm. As noted above, the retained earnings will be negative in the early quarters as the firm invests money to startup and grow the business. Next, the net equity is divided by the total of all equity investments to obtain a ratio of wealth creation. A value of zero or less indicates bankruptcy. A value greater than zero and less than one indicates the executive team is relying upon the initial stockholder's investments to pay day-to-day expenses plus invest in the future. A value greater than one indicates the firm is adding wealth to the stockholders. creation of wealth = net equity/total stockholders equity = 1,807,303 / 3,000,000 = 0.60 net equity = -1,192,697 + 3,000,000 = 1,807,303 retained earnings: -1,192,697 common stock: 3,000,000 total stockholders investment = common stock = 3,000,000 Human Resource Management is a measure of how well the executive team is able to recruit the best employees, satisfy their needs and motivate them to excel. Sales force productivity and factory worker productivity are averaged together to obtain a single score. High performance is only possible if the firm's compensation packages is competitive and in tune with what is important to employees over time. The scores range from zero to 1.00 and a good score would be greater than 0.80. human resource management = (sales force productivity/100 + factory worker productivity/100) / 2 = (79/100 + 73/100) / 2 = 0.76 sales force productivity: 79 factory worker productivity: 73 Asset Management is a measure of the executive team's ability to use the firm's assets to create sales revenue. The first step in measuring asset management is to compute the asset turnover of the firm. Effective managers are able to use the assets to create sales which are two or three times the value of the assets. Thus, a very good score would be 3.0 In addition to asset turnover, ending inventories are also measured and included. To avoid stock outs, and their associated penalties, managers might be inclined to produce excessive inventory. To discourage large ending inventories, there is a penalty for producing more inventory than is needed to meet demand. The penalty increases as the proportion of ending inventory to production increases. asset management = asset turnover * penalty for excess inventory = 0.25 * 0.19 = 0.05 asset turnover = net revenue/total assets = 445,580 / 1,807,303 = 0.25 net revenue = 450,500 - 4,920 + 0 = 445,580 sales revenue: 450,500 rebates: 4,920 interest income: 0 total assets: 1,807,303 penalty for excess inventory = (1-ending inventory/production) = (1 - 574 / 711) = 0.19 ending inventory: 574 production: 711 Annexure 6 Tactical Plan Tactical Plan Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Segments Targeted Mercedes; Workhorse; Mercedes; Workhorse; Mercedes; Workhorse; Workhorse; Traveler; Mercedes Workhorse; Traveler; Mercedes Workhorse; Traveler; Mercedes Sales Offices Opened New York; Tokyo Sales Office Expense 290,000 130,000 510,000 260,000 260,000 260,000 Web Centers Opened World Market; Toronto Web Center Expense 200,000 160,000 160,000 320,000 320,000 320,000 Number of New Brands 1 2 1 1 0 0 Names of New Brands Pro100 ProLight; Brands for Sale & Price Pro100; Pro10; Pro100X; Pro10 Pro100X; Pro10; ProLight; Pro100X; Pro10; ProLight; Pro100X; Pro10; ProLight; Average Selling Price 0 3,168 3,307 3,800 3,800 3,800 Brand Feature R&D Projects Brand Feature R&D Expense 0 0 0 0 0 0 Advertising Budget 0 156,176 264,015 300,000 200,000 100,000 Web Marketing Budget 0 63,000 42,000 42,000 42,000 42,000 Factory Worker Compensation 0 288,312 464,561 464,561 464,561 464,561 Average Sales Person Compensation 0 13,190 13,568 13,568 13,568 13,568 Number of Office Sales People 0 2 7 10 8 8 Unit Demand per Office Sales Person 0 36 22 160 160 80 Number of Web Sales People 0 2 4 8 8 8 Unit Demand per Web Sales Person 0 31 29 201 201 100 Projected Demand 0 67 268 3,225 3,225 1,600 Sales Force Salaries 0 79,143 149,243 253,000 253,000 253,000 Cost to Hire New Sales People 0 47,100 6,000 103,757 0 0 Total Sales Force Expense 0 126,243 217,551 360,000 360,000 360,000 Projected Revenue 0 450,500 1,187,609 12,255,000 12,255,000 11,000,000 Addition to Fixed Capacity 1,625 0 3,250 0 0 0 New Investment in Fixed Capacity 600,000 600,000 1,100,000 0 0 0 Available Fixed Capacity 0 1,625 1,625 3,250 3,250 3,250 Starting Inventory 0 0 391 1,240 0 1,043 Planned Production Volume 0 7,11 1,047 1,117 3,225 3,500 Available Inventory 0 7,11 1,438 2,357 3,225 4,543 % Lost Capacity Due to Employee Morale 0 27 30 25 28 0 Operating Capacity to Satisfy Planned Production 0 975 1,495 1,495 4,479 3,500 Average Unit Production Cost 0 1,279 676 537 1,900 1,075 Total Production Cost 0 909,606 707,359 600,000 612,750 3,762,500 Total R&D Cost 60,000 60,000 60,000 60,000 0 0 Conventional Bank Loans 0 0 0 1,500,000 0 0 Total Debt Level 0 0 1,239,705 1,500,000 0 0 Equity Investment 2,000,000 3,000,000 4,000,000 8,000,000 8,000,000 8,000,000 Total Assets 1,450,000 1,807,303 3,111,849 7,372,000 8,000,000 9,600,000 Actual Unit Sales for Quarter 0 137 268 0 0 0 Projected Demand 0 137 268 3,225 3,275 1,500 Actual Unit Demand for Quarter 0 137 268 0 0 0 Projected Revenue 0 450,500 1,187,608 12,255,000 8,547,750 5,700,000 Actual Revenue 0 450,500 1,187,608 0 0 0 Read More