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Building Business and Securing Company's Future - Assignment Example

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Summary
The paper "Building Business and Securing Company's Future" makes such assumptions: Sales are spread evenly throughout the year; The cost of goods for sales COGS is evenly spread throughout the year; Cash inflow is assumed as Equity and its is made at the beginning of the year…
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Building Business and Securing Companys Future
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Extract of sample "Building Business and Securing Company's Future"

Finance Assignment

Month

1

2

3

4

5

6

7

8

9

10

11

12

Year1

Income  statement

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

83333

83333

83333

83333

83333

83333

83333

83333

83333

83333

83333

83333

1000000

COGS

37500

37500

37500

37500

37500

37500

37500

37500

37500

37500

37500

37500

450000

Gross profit

45833

45833

45833

45833

45833

45833

45833

45833

45833

45833

45833

45833

550000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

350000

350000

350000

350000

350000

350000

350000

350000

350000

350000

350000

350000

420000

Start-up expenses

75000

25000

 

 

 

 

 

 

 

 

 

 

100000

Net profit

(64166)

(14167)

10833

10833

10833

10833

10833

10833

10833

10833

10833

10833

30000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

500000

 

 

 

 

 

 

 

 

 

 

 

500000

Accounts receivable

 

 

83333

83333

83333

83333

83333

83333

83333

83333

83333

83333

833333

Inventory

100000

100000

100000

 

 

 

 

 

 

 

 

 

300000

Total Assets

600000

183333

1833333

83333

83333

83333

83333

83333

83333

83333

83333

83333

1633333

Liabilities and owner’s equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

37500

37500

37500

37500

37500

37500

37500

37500

37500

37500

37500

412500

Total liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid in capital

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

(64166)

(14167)

10833

10833

10833

10833

10833

10833

10833

10833

10833

19164

Owner’s equity

500000

 

 

 

 

 

 

 

 

 

 

 

500000

Total liabilities and equity

500000

(266666)

(23333)

48333

48333

48333

48333

48333

48333

48333

48333

48333

385000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow statement

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning cash

500000

500000

537500

454167

554167

554167

554167

554167

554167

554167

554167

554167

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

Change AR

-

-

(83333)

0

0

0

0

0

0

0

0

0

 

Change Inventory

0

0

0

100000

-

-

-

-

-

-

-

-

 

Change AP

-

37500

0

0

0

0

0

0

0

0

0

0

 

Cash from financing

-

-

-

-

-

-

-

-

-

-

-

-

-

End cash

500000

537500

454167

554167

554167

554167

554167

554167

554167

554167

554167

554167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • The break-even point would still be reached in this case and therefore, any sales below that would still do but not lower than $970000. In case, to stay on course, the business can cut costs but this is, however, temporary and painful operationally. Increasing prices in line with production can further help to increase market share which will in turn develop brand loyalty. If the cost of production is inclusive of interests, get rid of loans by pumping more capital.

 

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