國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
IX. Financial Plan
Pro Forma 5-year Income Statement
Two most important factors taken into account in the calculation of The Phoebe’s 5-year income statement are average stay period (days per dog per stay) and the room utilization rate:
♦ Average stay period
According to the 2007 data retrieved from the Tourism Bureau, the average length of ROC people’s overseas travel is 10.6 days; the number is adopted in The Phoebe’s revenue calculation model.
♦ Utilization rate
The room utilization rate is the commonly-used determinant for hotel revenue estimation. Conservative room utilization rates have been adopted to calculate The Phoebe’s revenue estimation: average 40% for Year 1, 60% for Year 2, 70%
for Year 3, 75% for Year 4, and 80% for Year 5.
♦ Cost of goods sold
Dog food and accessories dominate more than 90% of total cost of good sold.
The cost estimation is obtained mainly from the survey of fair market prices.-
♦ General and admin expenses
Utility, rents, and HR expenses are the three major categories and share 22%, 30%, and 48% of total general and admin expense, respectively.
The Phoebe’s will have its breakeven point in the 2nd year of operation.
‧
Enter data in thousands of NTD
Year 1 Year 2 Year 3 Year 4 Year 5
2009 2010 2011 2012 2013
Revenue 10,538 15,807 18,441 19,758 21,076
Total Cost of Goods Sold 720 1,080 1,260 1,350 1,440
Gross Margin 9,818 14,727 17,181 18,408 19,636
Marketing Expenses 1,200 1,200 1,200 1,200 1,200
General and Admin Expenses 8,040 8,040 8,040 8,040 8,040
Total Operating Expenses 9,240 9,240 9,240 9,240 9,240
Depreciation Expense
(5-year Straight Line) 2,160 2,160 2,160 2,160 2,160
Operating Profit (1,582) 3,327 5,781 7,008 8,236
Other Income (Expenses)
Interest Income 176 222 305 318 560
Interest Expense 0 0 0 0 0
Pre-Tax Income (1,406) 3,549 6,086 7,326 8,795
Income Tax 0 822 1,435 1,742 2,049
Net Income (1,406) 2,727 4,651 5,584 6,746
Preferred Dividends 0 0 0 0 0
Common Dividends 0 0 0 0 0
Pro Forma 5-Year Income Statement
TABLE 9.1PRO FORMA 5-YEAR INCOME STATEMENT
TABLE 9.2PRO FORMA 5-YEAR INCOME STATEMENT CHART
Pro Forma 5-Year Income Statement
(20,000)
2009 2010 2011 2012 2013
(K NTD)
Revenue Other Income
Cost of Goods Sold Sales & Marketing Expenses
G&A Expenses Depreciation, Taxes, and Interest Expenses Net Income
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Pro Forma 5-year Balance Sheet
♦ Marketable securities
In Year 3, The Phoebe’s plans to start to purchase and maintain certain level of blue chip stocks or government bonds.
♦ Account Receivable
Customers are only allowed to pay by cash or credit card. The Phoebe’s would have no account receivable.
♦ Inventory
The Phoebe’s holds 2 month rolling stock for supply.
♦ Long-term Assets
The major items of long-term assets hold by The Phoebe’s are facilities, equipments, and a car for “See You in the Airport” and Pet Limo service. The long term assets are taking 5-year straight line depreciation.
♦ Long-term Liability
The Phoebe’s holds no long-term liability.
♦ Retained earnings
The Phoebe’s does not plan to give any dividend in the first 5 years.
‧
Enter data in thousands of NTD
Day 1 Year 1 Year 2 Year 3 Year 4 Year 5
2009 2010 2011 2012 2013
Asset
Cash and Cash Equivalents 5,880 7,414 10,153 10,592 18,651 8,871
Marketable Secutiries 0 0 3,000 10,000 10,000 9,000
Account Receivable 0 0 0 0 0 0
Inventory 120 120 180 210 225 240
Other Current Asset 1,200 600 600 600 600 600
Total Current Asset 7,200 8,134 13,933 21,402 29,476 18,711
Net Facility & Equipment 10,000 8,000 6,000 4,000 2,000 20,000
Other Long-term Asset 800 640 480 320 160 0
Total Long-term Asset 10,800 8,640 6,480 4,320 2,160 20,000
Total Asset 18,000 16,774 20,413 25,722 31,636 38,711
Liabilities
Account Payable 0 180 270 315 338 360
Taxes Payable 0 0 822 1,435 1,742 2,049
Other Current Liabilities 0 0 0 0 0 0
Long-term Debt 0 0 0 0 0 0
Other Long-term Debt 0 0 0 0 0 0
Total Liabilities 0 180 1,092 1,750 2,080 2,409
Shareholder's Equity
Preferred Stock 0 0 0 0 0 0
Common Surplus 18,000 18,000 18,000 18,000 18,000 18,000
Retained Earnings (1,406) 1,322 5,972 11,556 18,302
Total Shareholder's Equity 18,000 16,594 19,322 23,972 29,556 36,302
Total Liabilities & Shareholder's Equity 18,000 16,774 20,413 25,722 31,636 38,711
Pro Forma 5-Year Balance Sheet
Pro Forma 5-Year Balance Sheet
(50,000)
2009 2010 2011 2012 2013
(K NTD)
Total Current Assets Net Facility & Equipment Other Long-term Assets Total Current Liabilities Shareholder's Equity
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Pro Forma 5-year Cash Flow
The Phoebes holds conservative finance operation guidelines. Positive cash inflow will be generated in first consecutive 4 years. A negative cash flow will occur in year 5 for overseas hotel branch expansion.
‧
Pro Forma 5-Year Cash Flow
(25,000)
2009 2010 2011 2012 2013
(K NTD)
Net Income Depreciation
Net Cash Provided by Operating Activities Investing Activities
Cash and Cash Equivalents at End of the Year Accumulated Free Cash Flow
TABLE 9.5PRO FORMA 5-YEAR CASH FLOW
TABLE 9.6PRO FORMA 5-YEAR CASH FLOW CHART
Enter data in thousands of NTD
Year 1 Year 2 Year 3 Year 4 Year 5
2009 2010 2011 2012 2013
Cash Flow from Operating Activities
Net Income (1,406) 2,727 4,651 5,584 6,746
Depreciation 2,160 2,160 2,160 2,160 2,160
Net Change in Asset & Liabilities
Inventory 0 (60) (30) (15) (15)
Other Current Asset 600 0 0 0 0
Account Payable 180 90 45 23 23
Tax Payable 0 822 614 307 307
Net Cash Provided by Operating Activities 780 852 629 314 315
Cash Flow from Investing Activities
Capital expenditures 0 0 0 0 (20,000)
Purchase of security 0 (3,000) (7,000) 0 0
Proceeds from sale of security 0 0 0 0 1,000
Net Cash Used by Investing Activities 0 (3,000) (7,000) 0 (19,000)
Cash Flow from Financing Activities
Dividends paid to shareholders 0 0 0 0 0
Net Cash Used by Financial Activities 0 0 0 0 0
Net Increase (Decrease) Cash and Cash
Equivalents 1,534 2,739 439 8,058 (9,779)
Cash and Cash Equivalents at Beginning of the
Year 5,880 7,414 10,153 10,592 18,651
Cash and Cash Equivalents at End of the Year 7,414 10,153 10,592 18,650 8,872
Pro Forma 5-Year Cash Flow
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Key Financial Figures Projection
TABLE 9.7PRO FORMA 5-YEAR KEY FINANCIAL FIGURES
2009 2010 2011 2012 2013
Liquidity
Current Ratio 4519% 1276% 1223% 1417% 777%
Quick Ratio 4452% 1260% 1211% 1407% 767%
Profitability
Gross Profit Margin 93% 93% 93% 93% 93%
Operating Profit Margin -15% 21% 31% 35% 39%
Net Profit Margin -13% 17% 25% 28% 32%
Activity
Inventory Turnover 6.0 6.0 6.0 6.0 6.0
Total Asset Turnover 0.63 0.77 0.72 0.62 0.54
Shareholder Ratio
EPS -0.78 1.52 2.58 3.10 3.75
ROA -8% 13% 18% 18% 17%
ROE -8% 14% 19% 19% 19%
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Appendix 1. Luxury dog accessories for upscale pet shopper
LV Dog Collar
LV Dog Collar LV Dog Carrier LV Dog Carrier
Coach Dog Sweater Coach Dog Sweater Gucci Dog Backpack
Gucci Dog Backpack
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Gucci Dog Pendant
Gucci Dog Pendant
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Appendix 2. Two major categories of pet hotels in Taiwan
Professionals
♦ Downtown Pet Hotel
http://www.petsdreampark.com/tw/services/boarding.htm
♦ Countryside Pet Resort
http://www.weimaraner.com.tw/index-chinese-hotel.htm
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Subsidiaries
♦ Vet Clinic
http://www.vet.com.tw/news/new_96112201.htm
♦ Pet Store
http://www.doggy-house.com.tw/doggy3web/
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Appendix 3. Two examples of overseas five-star pet hotels
♦ United States: Petsmart PetsHotel
http://petshotel.petsmart.com/index.shtml
♦ Singapore: The Pet Hotel
http://www.pethotel.com.sg/about_us.htm
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Appendix 4. The location of The Phoebe’s
The red balloon indicates where the Taoyuan International Airport is located.