Moyou financial projection Essay Example | Topics and Well Written Essays - 750 words

Moyou financial projection - Essay Example The information is based on forecasts. Forecasting is used in estimating future performance of the business (Shim and Siegel 2007). It is useful in the financial planning process which entails assessing future financial needs. Investors use forecasting to value a company and determine its security. Pro forma statements show forecasts for periods ranging from 1-5 years. This report will assess the financial viability of MoYou by carrying out financial projections. The projections are based on the data obtained from the entrepreneur of the organization during an interview. According to the entrepreneur, annual sales add up to ?1 million. The Cost structure is as follows: The average cost is 3-5 USD per bundle unit. plate - 1$, nail polish 0.9$; Moyou is paying manufactures for labor according to their supply as mentioned above; variable- delivery and dispatch cost varies according to speed of delivery, and its range is from 0.3- 0.7 USD per unit. Service cost- Moyou customer service is based in Brent cross; fixed cost- ?900 per month, variable cost- ?150 per month, staff wages- ?2750 per month. Media and Public relations cost;  Exhibitions cost- ?750 annual and cost Marketing and brand development cost- ?2150 annual cost Income statement projections In the income statement forecast as shown in appendix 1 we assume: Sales grow at 10% annually Variable costs vary with the number of units sold All units produced are assumed to be sold Fixed costs remain constant throughout except the marketing, and product development costs Tax rate of 24% is to remain constant Marginal costing method has been used in projecting the income statement. Appendix INCOME STATEMENT FORECAST                2013 2014 2015 2016 2017 Number of units sold 100,000 110,000 121,000 133,100 146,410 sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100 Less variable costs:    Variable service costs 1,800 1,980 2,178 2,396 2,635 variable delivery & dispatch costs 50,000 55,000 60,500 66,550 73,205 Direct labor costs:    Plate 90,000 99,000 108,900 119,790 131,769 Nail 100,000 110,000 121,000 133,100 146,410 Total Variable costs 241,800 265,980 292,578 321,836 354,019 Less overheads costs:    Fixed service costs 10,800 10,800 10,800 10,800 10,800 Staff wages 33,000 33,000 33,000 33,000 33,000 Media and Public relations:    Exhibitions costs 9,000 9,000 9,000 9,000 9,000 Marketing and brand development 25,800 28,380 31,218 34,340 37,774    78,600 81,180 84,018 87,140 90,574 Net Profit Before Tax 679,600 752,840 833,404 922,024 1,019,507 Tax @24% (163,104) (180,682) (200,017) (221,286) (244,682) Operating income 516,496 572,158 633,387 700,739 774,825                   The operating income is a projection of financing the company needs. Projected balance sheet BALANCE SHEET FORECAST                Fixed Assets 2013 2014 2015 2016 2017 Property, plant & Equipment 1,200,000 1,080,000 972,000 874,800 787,320       Current Assets    Inventories 300,500 301,500 301,500 301,500 301,500 Cash 500,000 730,658 600,000 650,000 730,000 Accounts receivables 215,996 150,000 450,887 524,439 557,905 Total Assets 2,216,496 2,262,158 2,324,387

Product Assessment Essay Example | Topics and Well Written Essays - 1250 words - 1

Product Assessment - Essay Example Fax machines had been very popular in offices and at home for transmitting messages anywhere for some time. According to coupon. chili.com website, an environmentalist group, there are about 46.3 million fax machines in the world, most of which are held in the United States, Japan, Germany, France and UK (in that order) . This group is worried on the environmental effect of the staggering amount of paper consumed by the operation which they presumed to reach 853 miles of paper or approx. 1.373 kilometers and an impact to 2 million trees used for paper. It was once an important piece of technology that is attached to a telephone. However it is now considered by several analysts as an outdated technology that has many flaws. In the office setting, it is considered as a security risk for information and one that consumes a lot of money and materials. Due to other available means of communication, the fax machine is now suffering from a steady decline. For instance, as cited by Nick Staf feiri (April 9, 2010), law firms in Philadelphia have decreased its facsimile usage by about 55 to 70% from previous years due to electronic preference of documents than paper. A survey done by Linkedin to 7,000 professionals in 17 countries around the globe showed that it is one of the products that is slowly losing its appeal and would disappear by 2017 (Vivian Gang. Sept 25, 2012). So it is closer to an end, and by this time manufacturers in the US should have developed a strategy to avert this closure. Recommendations Businesses have a product cycle of growth, maturity and decline. In each stage businesses have to adjust strategies to complement the needs of the market and environment. In the declining stage, businesses will notice a decline in sales of the product or service. a. When a product reaches declining stage, it is about time that the company does strategic actions to resuscitate the dying business. At this point, company should look into foreign markets that have need for the fax machine. Wagner, K. (May 15, 2013), a reporter of the CNN, argued that in some markets, fax machines refused to die. This is the case in Japan wherein the popularity of fax machines has grown roots into the Japanese society. Old folks have developed attachment to the fax machine that they found it hard to replace regardless of the modern technology. Taking this as a cue, manufacturers of fax machine should take the market opportunity of developing third world countries. Statistics compiled by the Nation Master website showed that there are more users of fax machine in Japan aside from US, than in any other countries while fewer users are shown for African and Asian countries. This is an opportune time to develop these regions and introduce the product. b. It is also about time that manufacturers of fax machines upgrade their product to cope up with the advent of new technology. In order for the fax system to expand, it will be necessary to bring into it developments of multiple functions of the information system. But of course, this will be a tall order that will cause its reinvention and would incur a lot of new investments. Adding new features would be a risky investment where return of investment is not sure. c. Reduce marketing expenses such as advertisements and promotions. These are overhead expenses that could reduce operating cost and help preserve the business, and if sales do not improve, manufacturer