FINANCIAL PLAN

[ETNIKO MERCHANDISE]

FINANCIAL PLAN

[ETNIKO MERCHANDISE]

FINANCIAL PLAN The plans laid out by the Etniko merchandise would be best supported by the financial aspects prepared by the entrepreneurs themselves. The Income or Profit and Loss Statements, Projected Cash Flow and the Projected Balance Sheet are provided in order to support the prior plans stated in the Marketing, Technical and Organizational Plan. The details about the direct materials, indirect materials, direct and indirect l abor, manufacturing overhead are put into black and white in order to give the readers transparent reporting of the financial endeavor undertaken by Etniko.

FINANCIAL PLAN

[ETNIKO MERCHANDISE]

Table 1. Total Project Cost Total Project Cost Total pre-operating expenses Fixed investment Working Capital Total Project Cost Proportion of debt to equity Debt 0 0 0 0 0 Equity 14, 950.00 6,500.00 5,000.00 26,450.00 1 Total 19,950.00 6,500.00 5,000.00 26,450.00

No capital will sourced out from debt. Since the start-up capital is not too large, the entrepreneurs/owners are expected to provide all the financial and real assets that will be needed in the launching of the business. The financing cost of borrowing capital exceeds its benefits. Thus, the business is better-off with equity capital.

Total Project Cost

19%
25%
Pre-operating expenses

56%

Fixed investment

Working capital

FINANCIAL PLAN

[ETNIKO MERCHANDISE]

Table. 2 Projected Income Statement Etniko Merchandise Projected Income Statement Year 1 Total Sales 100,160.00 Less: Cost of Goods Sold 67,820.10 Gross Profit from Sales 32,339.90 Less: Selling Expenses Less: Administrative Expenses Net Operating Profit Less: Interest Charges Net Income Before Taxes 800.00 4835 26,704.90 0.00 26,704.90 825.00 4850 32,536.90 0.00 32,536.90 1,100.00 4867.5 41,421.33 0.00 41,421.33 1,200.00 4876 51,937.30 0.00 51,937.30 1,400.00 4894.2 68,169.99 0.00 68,169.99 38,211.90 47,388.83 58,013.30 74,464.19 76,972.10 85,073.17 94,317.70 108,332.81 115,184.00 132,462.00 152,331.00 182,797.00 Year 2 Year 3 Year 4 Year 5

The income before taxes on the first year of the business, naturally, will be low due to the start-up expenses. However, the business is expected to attain a considerable growth of income on the second year as it reaches stability. Then gradual increase in income is foreseeable in the succeeding business years.

FINANCIAL PLAN

[ETNIKO MERCHANDISE]

Net Income Before Tax

80,000.00

Net Income before Tax

70,000.00 60,000.00
50,000.00 40,000.00 30,000.00 20,000.00 41,421.33 32,536.90

68,169.99 51,937.30

26,704.90

10,000.00 0.00
Year 1 Year 2 Year 3 Year 4 Year 5

Table 4. Projected Cash Flows Year 1 Cash Inflows Owner's Equity 26,450.00 Sales 100,160.00 Total Cash Inflows 126,610.00 Cash Outflows Pre-operating Expense Materials Purchases Direct Labor Production Overhead Selling Expenses Total Cash Outflows Net Cash Flows Beginning Cash Balance Ending Cash Balance 9,460.50 30,429.00 52,947.98 72,404.96 98,984.04 8,460.50 21,968.50 1000 8,460.50 30,979.48 21,968.50 41,425.48 30,979.48 57,558.56 41,425.48 141,634.00 158,912.00 178,781.00 209,247.00 115,184.00 132,462.00 152,331.00 182,797.00 26,450.00 26,450.00 26,450.00 26,450.00 Year 2 Year 3 Year 4 Year 5

16850 4530 19500 73319.5 3950 118149.5

16850 3483 19500 75842.5 3990 119665.5

16850 3631.3 19500 83668.72 4282.5 127932.52

16850 3794.43 19500 92820.09 4391 137355.52

16850 3973.87 19500 106755.367 4609.2 151688.437

FINANCIAL PLAN

[ETNIKO MERCHANDISE]