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BusinessWorks Inc - A Dotcom in making

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Financial Plan - Assumptions-1

Monday, November 29, 2004
I received a comment from a Planware representative about their Excel-based products dealing with Financial projections and Business Plans. I checked out their website, they have some wonderful products, which may be used as a model for building the plan and creating projections. You will see some of those projections being used in our plan too.

Before we start with an actual Financial plan, there is a need to make some Assumptions. These assumptions will put the plan in proper perspective leaving no doubts in the mind of Venture Capitalists, when they read the plan projections. In assumptions area, you clearly get to specify average values, opening balances, percentages, tax rates and some ratios.As a start-up business, we will have very few variables that we can state in our assumptions list. I will build a template here and fill in the values tomorrow. Not all variables will be filled, as we are a service organization.

VariablesUnitsFirst YearSecond Year3-5 Years
Average Monthly SalesUS $000s
Desired average finished inventory% of Sales
Cost of materials/goodsAs % Sales
Target materials/goods inventoryUS $000s
Average monthly direct costs US $000s
Average monthly overhead expensesUS $000s
Opening total cost of fixed assetsUS $000s
Accumulated opening depreciationUS $000s
Average depreciation rate% p.a.
Planned capital expenditure for yearUS $000s
Interest rate for cash balances% p.a.
Interest rate for all debt/notes% p.a.
Opening cash balance (deficit)US $000s
Opening longterm debt/notesUS $000s
Net change in longterm debt/notes in yrUS $000s
Opening accounts receivableUS $000s
Opening accounts payableUS $000s
Average credit given on salesDays Sales
Average credit taken for materials/goodsDays Sales
Expected federal/state tax rate%
Planned dividend for yearUS $000s
Opening number of shares000s
Proceeds of new stock issuesUS $000s
Number of new shares issued000s

11/29/2004 09:19:00 PM :: ::
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