Financial Model

Index

Snapshot
Profit & Loss
Balance Sheet
Cash Flow
Revenue Drivers
Direct Expenses

Currency is INR except where otherwise mentioned

Time 0 represents the pre-operational construction perod.
Year 1 represents 12 months of operations after commissioning

nancial Model
Index

except where otherwise mentioned

he pre-operational construction perod.

onths of operations after commissioning

Snapshot

Snapshot (INR Cr)

Revenue
EBITDA
PAT
PAT %
Total Funds Required INR Cr

Year 1
1.4
-0.2
-0.1
-8%

Year 2
5.9
1.2
0.8
14%

Year 3
10.1
2.7
1.9
18%

Year 4
16.3
4.7
3.3
20%

0.49

18
16.3

Rs. Cr. (Revenue & EBITDA)

16

3.3

14
12

10.1
1.9

10
8

5.9

4.7

0.8
2.7

4
2

1.4

1.2
-0.1

0
-2

Year 1

-0.2

Year 2

Revenue

Year 3

EBITDA

PAT

Year 4

3.5
3.0

2.0
1.5
1.0
0.5
0.0
-0.5

Rs. Cr. (PAT)

2.5

Revenue Drivers

Revenue Streams (INR)

Time 0

Year 1

1,452,500

14,060,200

1,452,500

14,060,200

Time 0

Year 1

Number of product 1 (Pink sink)

150

330

Number of product 2 (Square)

40

88

Number of product 3 (drop)

10

22

Number of product 4 (circle)

10

22

Revenue from Product basket (Premium)

Revenue from product basket (Economy Segment)
Annual Revenue
Product Basket (Premium)

Price per product 1

25,000.00

27,500.00

Price per product 2

26,500.00

29,150.00

Price per product 3

50,000.00

55,000.00

Price per product 4

50,000.00

55,000.00

Total Basket Revenue

1,452,500.00

14,060,200.00

Annual Revenue

1,452,500

14,060,200

Time 0

Year 1

Sale Numbers per design

0.00

0.00

Average price per design

0.00

0.00

Revenue

0.00

0.00

Product Basket (Economy segment)

Number of designs

Annual Revenue

ivers

Year 2

Year 3

Year 4

34,025,684

41,171,078

49,817,004

25,000,000

59,400,000

113,256,000

59,025,684

100,571,078

163,073,004

Year 2

Year 3

Year 4

Product Multiplier

Basket multiplier

726

799

878

1.1

194

213

234

48

53

59

48

53

59

Basket Multiplier

30,250.00

33,275.00

36,602.50

32,065.00

35,271.50

38,798.65

60,500.00

66,550.00

73,205.00

60,500.00

66,550.00

73,205.00

34,025,684.00

41,171,077.64

49,817,003.94

34,025,684

41,171,078

49,817,004

Year 2

Year 3

Year 4

Product Multiplier

25

45

65

100.00

120.00

144.00

10,000.00

11,000.00

12,100.00

25,000,000.00

59,400,000.00

113,256,000.00

25,000,000

59,400,000

113,256,000

Inflation

Attrition rate

1.1

0.5

Products per basket

4

Operating Expenses

Direct Expenses (INR)

Time 0

Year 1

120,000

132,000

240,000

580,800

1,050,000

2,310,000

315,000

693,000

Labour Cost (Direct)*

Skeleton cost (Economy)

Upholstery Raw material (Economy)

Power

3,600

7,920

Repair and Maintenance

14,525

140,602

Distribution Cost

21,000

46,200

1,644,125

3,778,522

Time 0

Year 1

600,000

660,000

Number of Designs (Premium)

Number of Designs (Economy)

200,000

220,000

Number of workshops

Number of supervisor

Number of sales executives

600,000

660,000

Unskilled workers
Cost per unskilledworker
Premium
Labour Cost (Direct)
Skeleton cost (Premium)
Upholstery Raw material (Premium)
Economy

Annual Direct Expenses

Indirect Expenses
# of Designers
Cost per designers

Concept Generation Costs (Dyes+Prototypes)

Cost per sales executives

Salaries
CEO

CA

600,000

660,000

1,320,000

Rent

120,000

132,000

Supervisors

300,000

330,000

1,200,000

3,300,000

875000

3300000

1,000,000

Total One-Time design/concept generation cost

1,600,000

1,760,000

Total

4,695,000

11,802,000

Total Costs (Direct + Indirect)

6,339,125

15,580,522

Designers

Sales Executive s
Innovation Lab & Office space
Advertising Expenditure & Misc.

ses

Year 2

Year 3

Year 4

10

21

47

Per Unit cost

145,200

159,720

175,692

5000

Skeleton

1500

Upholstery

1,405,536

3,401,397

8,231,381

17.1428571 Power

5,082,000

5,590,200

6,149,220

1,524,600

1,677,060

1,844,766

1,405,536

3,401,397

8,231,381

1%

9,375,000

20,250,000

35,100,000

100.00 per product

2,812,500

6,075,000

10,530,000

60,281

111,738

181,540

590,257

1,005,711

1,630,730

351,640

651,804

1,058,984

22,607,350

42,164,307

72,958,003

Year 2

Year 3

Year 4

726,000

798,600

878,460

25

20

20

242,000

266,200

292,820

15

10

15

20

726,000

798,600

878,460

500,000

1,000,000

1,200,000

0.75

200000

of Revenues

*New Assembly line for economy (similar ca

Ratio of RM costs of economy to premium

per design

726,000

798,600

878,460

2,178,000

3,194,400

4,392,300

264,000

264,000

528,000

660,000

1,980,000

4,950,000

7,260,000

11,979,000

17,569,200

3630000

3993000

4392300

1,100,000

1,210,000

1,331,000

7,986,000

7,453,600

8,198,960

24,304,000

31,872,600

43,440,220

46,911,350

74,036,907

116,398,223

embly line for economy (similar capacity)

Cash Flow

Projected Cash Flow (INR)

Sources of Funds
-PBT

Time 0

Year 1

Year 2

Year 3

-4,886,625

-1,520,322

12,114,334

26,534,171

290,500
-4,596,125

2,812,040
1,291,718

11,805,137
23,919,471

20,114,216
46,648,386

290,500
0

2,521,540
-456,097

8,993,097
3,634,300

8,309,079
7,960,251

Total
Surplus/ (Deficit)
Equity Funding
Cumulative Cash

290,500
-4,886,625
4,886,625
0

2,065,443
-773,725
0
-773,725

12,627,397
11,292,074
0
10,518,348

16,269,330
30,379,056
0
40,897,405

IRR Calcs. (INR)

Cash Flow to Investors
Investment
Net Cash Flow
Investors Stake
IRR
NPV

Time 0
0
4,886,625
-4,886,625
5%
37.9%
6,778,177

Year 1
0
0
0

Year 2
564,604
0
564,604

Year 3
1,518,953
0
1,518,953

-Working Capital Loan

Total
Application of Funds
-Increase in Working Capital
-Income Tax

Year 4
46,674,781

32,614,601
79,289,382

12,500,385
14,002,434
26,502,820
52,786,562
0
93,683,967
Year 4
2,639,328
0
2,639,328

Year 5
16,336,173
16,336,173

Profit & Loss

Projected P&L (INR)

Time 0

Year 1

Year 2

1,452,500

14,060,200

34,025,684

25,000,000

1,452,500

14,060,200

59,025,684

Annual Direct Expenses

1,644,125

3,778,522

22,607,350

Total Direct Expenses

1,644,125

3,778,522

22,607,350

Gross Margin
Indirect Expenses

-191,625
4,695,000

10,281,678
11,802,000

36,418,334
24,304,000

EBITDA

-4,886,625

-1,520,322

12,114,334

PBT
Tax
PAT

-4,886,625
0
-4,886,625

-1,520,322
-456,097
-1,064,225

12,114,334
3,634,300
8,480,034

Time 0

Year 1
73.1%
-10.8%
-10.8%
-7.6%

Year 2
61.7%
20.5%
20.5%
14.4%

Income
Revenue from Product basket (Premium)
Revenue from product basket (Economy Segment)
Total Income
Direct Expenses

Margins
Gross Margin
EBITDA Margin
PBT Margin
PAT Margin

Year 3

Year 4

41,171,078

49,817,004

59,400,000

113,256,000

100,571,078

163,073,004

42,164,307

72,958,003

42,164,307

72,958,003

58,406,771
31,872,600

90,115,001
43,440,220

26,534,171

46,674,781

26,534,171
7,960,251
18,573,920

46,674,781
14,002,434
32,672,347

Year 3
58.1%
26.4%
26.4%
18.5%

Year 4
55.3%
28.6%
28.6%
20.0%

30% of PBT

Balance Sheet

Projected Balance Sheet (INR)

Sources of Funds
-Equity Share Capital
-Reserves and Surplus
Total Equity
-Long Term Loans
-Working Capital Loans (Equity funded)
Total Debt
Total Liabilities
Applications of Funds

Working capital
Cash /Bank Balances
Total Assets
Check

Time 0

Year 1

Year 2

Year 3

4,886,625
-4,886,625
0

0
-1,064,225
-1,064,225

0
7,415,808
7,415,808

0
25,989,728
25,989,728

290,500
290,500
290,500

3,102,540
3,102,540
2,038,315

14,907,677
14,907,677
22,323,485

35,021,892
35,021,892
61,011,620

290,500
0
290,500
0

2,812,040
-773,725
2,038,315
0

11,805,137
10,518,348
22,323,485
0

20,114,216
40,897,405
61,011,620
0

WC/Sales
0.2
The WC loan is currently not repaid as it is asumed to be either funded from internal sou
Year 4
0
58,662,075
58,662,075
67,636,493
67,636,493
126,298,568

32,614,601
93,683,967
126,298,568
0

e either funded from internal sources or equity funding

Cost-side Assumptions

Revenue-side Assumptions

Deposit for Rent

1000000
Rent per Year
3000000
Cost for Prototyping/Design
100000
Die/ Design
100000
No. of unskilled workers scale up in proportion to the no. of pieces
Skeleton manufacturing outsourced to reliable manufacturer
Upholstry workers trained inhouse
Ratio of supervisors to workers
1:10
Innovation lab cost covers the training costs

Industry Name

Accounts Receivable/Sales

Furn/Home Furnishings

11.45%

Product Multiplier
Basket Multiplier
Attrition rate
Products per Basket
New Economy product line launced after 2 years
Average revenue/ basket considered in accordan

Inventory/Sales

Accounts Payable/Sales

14.01%

9.23%

* http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wcdata.html

General Assumptions
1.2
2.5
0.5
4

Inflation rate

t line launced after 2 years

ket considered in accordance with the Year 0 product basket

e/wcdata.html

Cash/Sales

Non-cash Working Capital/Sales

Working capital/ Sales

8.24%

13.45%

21.69%

10%