Fabrica 7. Financial Plan
7.1 Highlights of results 7.1.1. Income statement
Year Net Sales Cost of Goods Gross margin % Net income after tax Net income % of sales 2000 935,476 412,661 55.98 40,651 4.35 2001 7,115,474 1,421,619 80.02 2,902,627 40.79 2002 5,870,898 1,286,864 78.08 2,430,598 41.4 2003 7,776,928 1,754,950 77.43 3,280,708 42.19 2004 12,470,861 2,320,684 81.39 5,949,583 47.71
7.1.2. Balance Sheet
Year Current Assets Fixed Assets Total Assets Total Liabilities Net worth 2000 391,319 513,625 1,004,944 64,472 940,472 2001 2,084,052 756,254 2,940,306 234,446 2,705,859 2002 1,996,374 1,105,168 3,201,543 174,564 3,026,978 2003 1,274,252 1,719,225 3,093,477 207,553 2,885,924 2004 12,143,432 1,074,940 3,318,372 284,459 3,033,913
7.1.3. Cashflow
Year Cash from Operations Net Cashflow Dividends 2000 2,04,283 242,447 2001 3,165,687 1,301,507 1,137,239 2002 844,515 1,357,439 2,109,479 2003 3,949,482 449,269 3,421,762 2004 6,593,869 830,039 5,801,595
7.2 Key assumptions Inflation
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. Currency 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. Personnel Costs 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%. Capacity Utilization 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
YEAR Sources of Funds Initial capital - founders Investors TOTAL Uses of Funds 510,000 0 510,000 0 490,000 490,000 0 0 0 0 0 0 0 0 0 0 0 0 1999 2000 2001 2002 2003 2004
Deposit for buildings Machinery Factory Equipment Patents Office Furniture Vehicles Pre-operating Expenses TOTAL
14,286 91,429 37,143 100,000 28,571 33,714 42,730 347,873
0 502,857 14,286 0 4,571 12,857 0 534,571
0 497,143 0 0 0 0 0 497,143
0 754,286 0 0 0 0 0 754,286
0 1,274,286 0 0 0 0 0 1,274,286
0 0 0 0 0 0 0 0
7.4 Performance and Sensitivity Analysis 7.4.1 Ratios
Ratio Current Ratio Debt: Equity Return on Equity % 2000 6.07 0.07 4.32 2001 8.89 0.09 107.27 2002 11.44 0.06 80.3 2003 6.14 0.07 113.68 2004 7.54 0.09 196.1
7.4.2 NPV Sensitivity Analysis (US$)
NPV CASES 15% increase 10% increase 5% increase Base Case 5% decrease 10% decrease 15% decrease 20% decrease Revenue 5,170,743 4,868,618 4,566,241 4,263,865 3,961488 3,657,146 3,348,376 3,039606 Expenses 3,847,627 3,989,980 4,128,479 4,263,865 4,399,250 4,530,055 4,669,486 4,804,292 IRR Revenue 201.15 193.18 184.73 176.14 167.42 158.36 148.73 138.96 Expenses 159.57 165.39 170.90 176.14 181.42 186.73 192.08 197.46
Sensitivity Analysis
Change