Financial Analysis and Break-Even Point of an Insurance Company

The provided content appears to be a financial statement for an insurance company over three years, from 2000 to 2003. The statements include income statements, cash flow statements, and break-even analysis. The income statements show the company's revenue, operating expenses, PBIT (profit before interest and tax), interest payment, and net profit increasing over the three-year period. The cash flow statement shows the company's cash inflows and outflows, including the purchase of fixed assets, equipment, and accessories, as well as salaries, utilities, and miscellaneous expenses. The break-even analysis suggests that the company needs to sell 95 students per year to break even.

GEMS KINDERGARTEN Play
School
(BUSINESS PLAN)

TABLE OF CONTENTS
Executive summary..............................................................................................................................
Company Description...........................................................................................................................
New Product Concept...........................................................................................................................
Sustainable competitive advantage.......................................................................................................
Market environment competitor analysis.............................................................................................
Industry Attractiveness.........................................................................................................................
Porter’s Five Forces.....................................................................................................................4
Overall Market and Target Segment(S)...............................................................................................
Size of the current market............................................................................................................5
Target market segment.................................................................................................................6
Competitive positioning.......................................................................................................................
Customer decision making process..............................................................................................7
Marketing Mix.............................................................................................................................8
Growth strategy............................................................................................................................9
Research & Development...................................................................................................................
Operations...........................................................................................................................................
Management Structure........................................................................................................................
Risk Recognition and Risk Reduction Strategies...............................................................................
Financial details..................................................................................................................................
Sensitivity Analysis............................................................................................................................
Financial Analysis..............................................................................................................................
References..........................................................................................................................................
Appendix............................................................................................................................................

Sales forecast.............................................................................................................................17
Salary structure..........................................................................................................................17
Income statement.......................................................................................................................17
Cash flow statement...................................................................................................................18
Break Even Analysis..................................................................................................................19

LIST OF FIGURES
Figure 1: Number of nursery schools in the United Kingdom (UK) from 2000/2001 to
2014/2015*......................................................................................................................................5
Figure 2: Bayswater Road near Kensington Palace, London, UK..................................................9
Figure 3: Management Structure...................................................................................................11

EXECUTIVE SUMMARY
Gems Kindergarten play school is highly specialized play group school which focuses on
providing three types of programs for the child development grooming i.e. Nuvo, play group and
nursery & kindergarten. Furthermore, the initial investment of business will be 100000 which
will generate positive returns after the one year functioning. On the basis of breakeven analysis,
95 students should help in achieving no profit no loss situation for the firm.
COMPANY DESCRIPTION
Gems Kindergarten is play school group which aims at providing Early Childhood Care
& Education (ECCE) and will follow the standard of Child Development & Education (CDE).
Looking at the competitive environment, every parents wants their child to be skilful and capable
in order to compete in the market. In this regard, childhood development plays significant role to
make them strong and skilful. The main purpose of entrepreneur is to provide early education
facility so that it helps child to groom at early stage and start educational career with a grace and
confidence. Furthermore, owner is planning to offer different programs to varied ages of children
such as:
Programs Age group Duration
Nuvo 1.5-2.5 years 2 Hours/day
Play group 2-3 years 3 Hours/day
Nursery & Kindergarten 3-4.5 years 4 Hours/day
With such attractive service, entrepreneur is planning to attract large number of parents
so that they can be encouraged to make their children join Gems Kindergarten. Furthermore,
cited play school will be located at Bayswater Road near Kensington Palace, London, UK. At the
initial stage, owners are planning to target domestic market around London and on the basis of
demand and responses from clients or customers, management will focus on distribution of
services on national level. The business will be privately owned and consist of two principal
shareholders for executing the business activities.
Mission:
Mission statement of Xyz play group is to develop synergy of skills, knowledge and
values in the children to provide them inner voice for the 21st Century.
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Objectives:
To open a new venture it is important for the entrepreneurs to develop realistic and
achievable objectives for future development. Following are the objectives for Gems
Kindergarten:
 Provide safe and satisfying play school in which parents are also encouraged to
participate for better development of their child.
 To offer attractive educational services that makes children learn without books.
 To attract high amount of families for fulfilling 70% of classes capacity by the end of
first year operations.
NEW PRODUCT CONCEPT
Looking at the current market environment, parents are highly concerned about the
education and learnings of their children. In this regard, the concept of Gems Kindergarten is to
provide attractive, creative and safe environment where child can groom, learn new things, and
enhance his/her attributes before starting their education career. Therefore, to cover all these
aspects, different play school services have been designed by the owners to establish business
within the target market of London. Following are the four different kinds of categories that
Gems Kindergarten will offer to children:
 Nuvo: This category is especially crafted for children of age group 1-2.5 by keeping in
mind about the holistic development of children at this age. The main purpose of this
program is to develop and strengthen the relationship between child and care giver.
However, the program consist of structural learning developmental experience of kids by
rhymes, free play, sensory activities, art and crafts, scrap books activities, sand and water
activities and outdoor and indoor play.
 Play group: This is the category of age group consisting 1.5 to 2.5, where children start to
explore the world around them. Therefore, this program helps them explore world in
more attractive and creative manner with safe environment. This program will focus on
developing skills related to social, aesthetic and motor in young child. Activities included
in this section is water and sand play, creative time, field trips, puppet shows and skits,
celebration of festivals and special days.
 Nursery & Kindergarten: In this section, child will be engaged school readiness activities
such as reading, counting, alphabet and number recognition, problem solving in fun etc.
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Herein, individual will be encouraged to learn through dramatics, science and art.
Furthermore, letter and number will be visualized through projector, building blocks
activities will be used to enhance problems solving skills, realistic articles will be used
for memorizing the child about basic understanding.
SUSTAINABLE COMPETITIVE ADVANTAGE
Planning to enter into such a competitive environment it is important for the senior
authority of Gems Kindergarten to provide quality of services and environment to the child so
that parents can be attracted. To establish business and attain competitive edge within the target
market it is essential to create brand image. On the basis of above product concept of Gems
Kindergarten, they are predominantly reliant on their core competencies that is environment and
education. The main aim of company’s entering into education sector is to provide quality of
learning environment for different age group where child enhance their various and abilities
before initiating their education career.
Gems Kindergarten tablet:
Gems Kindergarten tablet will assist in providing the child an all-round exposure to
ensure multiple skill development. However, this tablet will consist of reading, musical,
mathematical, analytical and technological skills to give the child smart edge. By the means of
this, owners are focusing on attaining sustainable competitive advantage as their competitors are
not offering such type of services for the betterment of child’s grooming and early stage learning.
MARKET ENVIRONMENT COMPETITOR ANALYSIS
Analyzing market is one of the major aspect of business plan, however, it helps in
evaluating and identifying all the competitors available in the market that are also offering
similar kinds of services to the same target market. In this regard, following are competitors of
Gems Kindergarten:
 Castle Kindergarten (Wimbledon): It is one of the outstanding nursery school for the
children aged from 2-5 years which offers superior quality of education services to
prepare children for prep schools. Firm have high staff ratio and rich curriculum, perfect
and gentle introduction to nursery school so that basic skills and abilities of child can be
developed.
 Chelsea Pre-Prep and Nursery: In the area of Chelsea it is considered as one of the best
play school in offering early education for children aged 2.5 to 6. However, owner of this
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school focuses on providing list of fun activities such as sports lesion, music and drama,
French and animal care so that children can learn varied basic things.
 Miss Daisy: It is a group of three popular nursery schools in Chelsea, Knightsbridge and
Belgravia. Further, school offers the services of play group, nursery and kindergarten to
the children so that with their basic education, curriculum activities are also focused on
so that preparation for future schools can be carried out effectively.
INDUSTRY ATTRACTIVENESS
Porter’s Five Forces
In UK, there are several sectors that are showing tremendous growth and sustainability
for the future. Toy industry is one of those sectors that are in highly demand and people for the
sake of their children are spending huge amount in the toy products and services. Further,
through the help of Porter’s Five Forces model, researcher focuses on evaluating the UK
Education sector so as to understand the risks and uncertainties associated with it.
 Threat of new entrant: In UK, education sector is emerging as one of the brightest and
competitive sector. However, with wide range of universities, colleges, school etc. around
UK making this sector one of the competitive environment to operate in it. However,
education, grooming, skill development is basic need of children or individual (Lewin
and et.al, 2010). Thus, the demand for services in this sector will never come to an end.
In this regard, threat of new entrant in education sector of UK is relatively high.
Moreover, in play with reasonable initial investment attract large investors to enter into
this sector.
 Bargaining power of supplier: The degree of supplier concentration and supplier
importance in context to education sector is similar as considered in economic aspect.
There are several supplier exist in the market that its bargaining power is moderate.
Schools, colleges, universities are making their inventory of books and copies that indeed
to reduces the power of supplier as they have to operate as per the terms and conditions
of buyer (Dobbs, 2014).
 Bargaining power of customer: With ease of entrant into the education sector of UK,
customers gets wide range of options for their children in terms of getting best possible
education. Therefore, bargaining power of customers is high. It is because of the fact that,
4

switching costs is relatively low due to present wide range of play schools in different
parts of UK (RENKO and et.al, 2011).
 Intensive rivalry: Education sector of UK is one of the highly competitive environment
for the entrepreneurs to survive in. However, with large number of play schools, primary
schools etc. present in the market, intensive rivalry for Gems Kindergarten is relatively
high. Therefore, it is important for the owner to make sure that they offer attractive and
innovative services to satisfy the needs and wants of customers (Foskett, 2010).
 Threat of substitute: Considering the nature of business that entrepreneurs are focusing on
will possess low threat of substitute. This is because, early stage education comprises of
similar services or concepts only thus, substitute of products is relatively difficult which
reduces its threat.
OVERALL MARKET AND TARGET SEGMENT(S)
Size of the current market
Figure 1: Number of nursery schools in the United Kingdom (UK) from 2000/2001 to
2014/2015*
(Source: Statistical Portal, 2015)
The above depicted graph assist in presenting the number of nursery schools in United
Kingdom from 2000/01 to 2014-15. However, the number of schools are declining at significant
5

pace because all the schools are providing same services which indeed creates high competition
and restrict owners to generate better sales. By the means of the decreasing sales and customers
nursery schools are forcefully closed down (Kim and et.al, 2011). Furthermore, people
perception have changed now and they want best and creative possible early stage grooming and
education for their child so that he/she can enhance skills become competent to enter into
primary education system.
On the basis of this, stats market gap has been identified which is that there are numerous
play schools but unable to provide quality of creative environment and education services that
can groom a child. In this regard, owners of Gems Kindergarten have focused on offering
learning through practicality, electronically so that child can connect to the things and learn in
more effective way (Huang and et.al, 2012).
Target market segment
Looking at the current business segment of Gems Kindergarten, owners have segmented
the target market into three different categories: geographic, demographic and Income level.
 Geographic: Planning to open play school in Bayswater Road near Kensington Palace,
London, UK the target market will be segmented as per the communities and societies
associated with the location. However, people of surrounding areas will be targeted to
generate leads.
 Demographic: Owners of Xyz are focusing on targeting those parent who both are
employed and unable to provide adequate amount of time to their child for grooming
them or making them learn. Thus, this is the major target market for the cited venture
which will be focused mainly. Overall marketing plan will be designed as per the needs
and wants of such people so that they can influenced to send their child to play school
and make him/her learn new and effective things through fun and creative education
system.
 Income level: This is the third category in which target market is segmented on the basis
of income level. According to the designed services, upper middle class and higher class
people will be targeted (Noss and et.al, 2012). This is because, owner is planning to sale
its service at reasonably high prices so that they can acquire the educational tools like
tablet and other essential services.
6

COMPETITIVE POSITIONING
Entrepreneurs planning to enter into such a competitive corporate environment it is
essential for them to make sure that they evaluate each and every aspect appropriately so that
smart and reliable decisions can be made. Herein, management should focus on positioning their
offering within the mind of target audience suitably so that sales can be generated. In this regard,
investigator can present the competitive positioning of Gems Kindergarten through the means of
Porter’s Generic Strategies (Berthon and et.al, 2012).
Herein, owners are concentrating on cost and differentiation focus strategy to position
products and services. Through the means of cost focus strategy Gems Kindergarten can easily
offer value for money to its customers by focusing on higher ratio of quality to price. In addition
to this, differentiation strategy will help in differentiating the products from the competitor and
assist establishing business at initial stage so that suitable platform can be developed for future
competitive advantage in education sector. According to the business concept, cited play school
is targeting children from 1.5 to 6 year and provide them better environment and innovative ways
of learnings apart from the use of books (Ataman and et.al, 2010). Therefore, through the means
of both these generic positioning strategies company will be able to position its products and
services within the target market in effective and efficient manner.
Customer decision making process
In general, marketing is considered as the integral part of business activities and for
initiating a new venture it is the most likely prospect that will help the course of owners in create
awareness and generating better demand of services within the target market. In context to the
industry selected, marketing strategy for Gems Kindergarten will be categorized on geographic
and demographic aspects of customers (Dobbs, 2014).
In terms of geographic segmentation, primary customer for cited school will be people
living in the societies and communities that are nearby Kensington Palace, London. For this,
newspaper and pamphlets will be used so that each and every family can be targeted for
generating demand. Along with this, use of digital marketing such as TV, social media etc. will
help the course in sharing information towards the target market.
In terms of demographic segmentation, owners of Gems Kindergarten is targeting high
income level people and parent who are into job or profession. In this, middle and higher class
people are targeted because designed services are relatively expensive for instance providing
7

educational tablet so that child can learn new things easily. In order to attract such people
marketer can make the use of video, attractive ads and setup temporary outlets in Malls and
popular places of London so that customers (Parents) can be easily attracted and encouraged to
make admission of their child in new venture (RENKO and et.al, 2011).
Marketing Mix
In general, marketing mix is the tool which helps in illustrating different prospects of the
business enterprise which consist of product, place, promotion and price. Following is the
marketing of Gems Kindergarten:
 Product: According to the concept of Gems Kindergarten, owners will offer three
different types of programs or products for the children so that they can enhance their
skills and abilities through superior quality of early stage learnings. The product range of
cited frim consist of three types: Nuvo, Play group, Nursery and Kindergarten. On the
basis of age group children will be admitted in the all the categories of educational
programs (Huang and et.al, 2012).
 Price: Entering into relatively competitive market it is important for the entrepreneur to
offer academic and play group services at affordable prices but offering wide range of
creative and innovative learning system which excludes books requires adequate amount.
Therefore, premium pricing strategy has been used and upper middle and higher class
people are targeted so that cream and high class people’s children can be served with
superior quality of educational services (Kim and et.al, 2011).
 Place: Gems Kindergarten will be located at Bayswater Road near Kensington Palace,
London, UK. However, on the basis of geographic segmentation at the initial stage
owners will target nearby communities and societies so that parents of children aging 1.5
to 6 can be attracted. Once the domestic market is captured in effective way,
entrepreneurs will expand business by opening franchise in other parts of UK.
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Figure 2: Bayswater Road near Kensington Palace, London, UK
(Source: Statistics Portal, 2015)
 Promotion: As per the business concept marketing strategy of Gems Kindergarten will be
based on demographic and geographic customer segment. However, owners will invest
adequate amount at the initial stage to make use of trending marketing strategies so that
large number of audience can be attracted to acquire the quality of services offered by the
firm and its establishment can made in the best possible manner (Muhamad and et.al,
2012).
Growth strategy
To open new venture it is important for the senior authority to develop suitable strategies
or tactics so that execution of activities can be done in planned and reliable manner. According
to the present business plan, owner of Gems Kindergarten is planning to make use of cost focus
and differentiation growth strategy. The main purpose behind using both these approach is that,
by cost focus strategy cited firm can provide value for money to its customers as well as enhance
the learning of the child to a great extent with maintaining the costs and expenditure of business
activities (Quinn and et.al, 2010). While on the other hand, through the means of using
differentiation growth strategy will assist in differentiating the products and services of cited
9

play school from existing competitors i.e. providing educational tablets which will enhance the
level of education for the child and make learning a fun activity.
Therefore, making use of both these strategies will assist in establishing the business
activities of Gems Kindergarten in effective and efficient manner. Further, maintaining level of
functioning and quality of services will help the course in sustaining long period of time within
highly competitive educations sector.
RESEARCH & DEVELOPMENT
Research and development is one of the major aspect of Gems Kindergarten venture
because within regularly altering corporate environment in education sector it is essential to
understand current and emerging trends so that accordingly services can be improved or
enhanced. On the basis of demand and expectations of people living London, three types of play
school program has been developed (Rebonato and et.al, 2011). On the basis of these educational
programs owners are focusing on attracting parents of children aging from 1.5 to 6 years so that
with the help of superior quality of practical educational services they can influence parents to
admit their child and enhance his/her skills and abilities. In context to technological
advancement, research and development plays important role as managers of cited play school
can make use of trending technical equipment’s to enhance the learning habits of child (McNeil
and et.al, 2015).
OPERATIONS
There are several major operations of Gems Kindergarten which comprises of services,
marketing and sales. However, it is vital for the senior authority of cited firm to make sure that
they carry out all these operations in the best possible manner so that defined aim and objectives
can be achieved (Ataman and et.al, 2010). Further, educational services will be given in
innovative and creative manner as more focus will be on practicality so that children can learn by
visualizing, feeling or touching the things rather than just reading or writing in books.
Furthermore, trending marketing strategies has been employed to create better awareness within
the market and influence large number of audience.
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MANAGEMENT STRUCTURE
Gems Kindergarten will be a family owned business by the combination of Mr & Mrs
Peterson. However, both are young and have the enthusiasm to carry out the operations of
business in effective and efficient manner.
Figure 3: Management Structure
RISK RECOGNITION AND RISK REDUCTION STRATEGIES
There are several risks and uncertainties associated with business operations and it is the
duty of senior managers to make sure that they assess the situations and accordingly employ
different risk management tactics for mitigating the issues and problems and carry out operations
effectively. Following are the risks associated with Gems Kindergarten:
Threats Pro-active strategies Reactive strategies
Intense rivalry is the major
risk for management of cited
firm.
Assessing the needs and
expectations of clients or
customers will help in
satisfying them in appropriate
way.
Penetration pricing strategy
can be used to attain
competitive edge within the
domestic market.
Lack of demand Use of trending marketing Providing offers and
11
Owners (Mr &
Mrs Hayden)
Accounts
Manager
Staff Members
Teaching
Professionals
Nuvo Teachers
Play group
Teachers
Nursery &
Kindergarten
Tearchers
Marketing
Manager
Makreting
Executives

approaches will help in
creating effective awareness
within the target market to
generate higher demand.
discounts on different
programs to create demand
for the services.
FINANCIAL DETAILS
This is the most significant aspect of the entire business plan. However, through the
means of this section researcher can easily show the detailed information regarding the
investment required to carry out the plan as well as different sources through the means of which
owners will raise the funds. In the present business plan, owners of Gems Kindergarten will raise
funds through two method i.e. equity and debt financing. However, for the initial investment,
amount will be invested by owner in the name of owner’s capital and bank loan for debt
financing at certain interest rate. The overall fund required to carry out operations is £100000
which is categorized in the following manner:
Start-up Funding Amount (£)
Start-up expenses to funds 40000
Start-up Assets to fund 60000
Furthermore, the fund are raised on 1:1 ratio which means £50000 will be borrowed from
bank and £50000 will be invested by owner as personal savings.
SENSITIVITY ANALYSIS
Sensitivity Analysis
Revenue increased by 10% 352000 387200 425920
Net Cash flow 82260.5 99160.9 112251.9
Net Profit 144580.5 153792.9 168426.1
Revenue Decreased by 10% 288000 316800 348480
Net Cash flow 40212.5 52908.1 61373.81
Net Profit 137092.5 145556.1 159365.61
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On the basis of above sensitivity analysis it has been evaluated that, with increasing sales
by 10% at same operating expenditure will in generating higher profit as it will also generate
higher net cash flow. While on the other hand, decreasing sales by 10% will result in declining
net cash flow and falling net profit. Thus, top level of Gems Kindergarten should be prepared for
both situation and make valiant efforts to generate desired level of outcomes.
FINANCIAL ANALYSIS
This is another major aspect of business plan which need to be carried out in effective
and efficient manner. However, account manager of Gems Kindergarten should assess the
financial projection on the basis of different situations and prepare income, cash flow and
breakeven point etc.
Assumptions:
 Sales growth as per the industry standards is assumed at 10% per annum.
 Monthly rent of school premises is 3% of revenue generated every year.
 Cost of goods sold is assumed at 20%.
 In UK, inflation rate increased on utilities by 3% per annum (United Kingdom inflation
rate, 2015).
 Registration charges of £5000 is charged in the pre-operating year.
 Educational equipment’s and Accessories are purchased on the basis of 20% of revenue
generated.
 Salary increment for employees will be hike of 5% per annum.
 Miscellaneous expenditure assumed to increase by 10% every year.
 At the initial year marketing and promotional campaign expenses will be incurred at
higher rate and for the coming year it will be based on 10% of sales every year for
reaching out large number of audience of UK.
 Borrowings of £50000 will be taken from bank as the commercial loan at the interest rate
of 7.63% and will be paid in the 3 year duration.
 Market research expenses of £10000 is expected.
 Insurance fixed for every year @ £2000.
 Depreciation on fixed assets of £65000 at 10% on the straight line method.
 Tax of 10% will paid on the earned profit.
Investment appraisal techniques:
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Net present value:
Year Cash Flows Pv Factor @ 10% Amount
1 40212.5 0.909 36553.16
2 52908.1 0.826 43702.09
3 61373.81 0.751 46091.73
Total 126347
Less: Initial Investment 100000
NPV 26346.98
From the above computation of NPV of capital budgeting techniques it has been
evaluated that, opening new play school in London is feasible option for the entrepreneurs
because it will help in generating positive net present value of 26346.98 in future. Therefore, it is
recommended to the management level people to invest in the same project and generate desired
level of financial benefits in near future.
14

REFERENCES
Journals and Books
MARKETING MIX
Ataman, M.B. and et.al., 2010. The long-term effect of marketing strategy on brand sales.
Journal of Marketing Research. 47(5). pp.866-882.
Berthon, P.R. and et.al., 2012. Marketing meets Web 2.0, social media, and creative consumers:
Implications for international marketing strategy. Business horizons. 55(3). pp.261-271.
Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review. 24(1). pp.32-45.
Foskett, N., 2010. Markets, government, funding and the marketization of UK higher education.
The Marketization of Higher Education and the Student as Consumer, London:
Routledge. pp.25-38.
Huang, R. and et.al., 2012. How brand awareness relates to market outcome, brand equity, and
the marketing mix. Journal of Business Research. 65(1), pp.92-99.
Kim, J.H. and et.al., 2011. A model to investigate the influence of marketing-mix efforts and
corporate image on brand equity in the IT software sector. Industrial Marketing
Management. 40(3). pp.424-438.
Lewin, C. and et.al., 2010. Technology to support parental engagement in elementary education:
Lessons learned from the UK. Computers & education. 54(3). pp.749-758.
McNeil, A.J. and et.al., 2015. Quantitative risk management: Concepts, techniques and tools.
Princeton university press.
Muhamad, R. And et.al., 2012. Segmentation and brand positioning for Islamic financial
services. European Journal of Marketing. 46(7/8). pp.900-921.
Noss, R. and et.al., 2012. System upgrade: realising the vision for UK education.
Quinn, L. and et.al., 2010. Evaluating market-segmentation research priorities: Targeting re-
emancipation. Journal of Marketing Management. 26(13-14). pp.1239-1255.
Rebonato, R. and et.al., 2011. The most general methodology to create a valid correlation matrix
for risk management and option pricing purposes. Available at SSRN 1969689.
RENKO, N. and et.al., 2011. Designing marketing strategy using the five competitive forces
model by michael e. Porter-Case of Small Bakery in Croatia. International Journal of
Management Cases. 13(3). pp.376-385.
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Online
Statistics Portal, 2015. [Online]. Available through:
<http://www.statista.com/statistics/283573/nursery-schools-in-the-united-kingdom-uk-y-
on-y//>. [Accessed on 6th May 2016].
16

APPENDIX
Sales forecast
Sales Forecasting Year 1 Year 2 Year 3
Number of Admissions 100 110 121
Price per Unit 3200 3200 3200
Expected Sales 320000 352000 387200
Salary structure
Salaries No. of People Per month salary
Owner 1 800 9600
Account manager 1 800 9600
Nova Teachers 3 800 28800
Play group teachers 3 800 28800
Marketing Executives` 1 300 3600
Nursery & Kindergarten teachers 3 300 10800
Other staff members 3 250 9000
100200
Income statement
Forecasted Income Statement Year 1 Year 2 Year 3
Revenue 288000 316800 348480
Less: Cost of goods sold 57600 63360 69696
Gross profit 230400 253440 278784
Rent 8640 9504 10454.4
Training and development expenses 0 0 0
Utilities and maintenance 5000 5150 5304.5
Salaries 100200 105210 115731
Insurance 2000 2000 2000
Promotions and advertisements 28800 31680 34848
Depriciation 6500 6500 6500
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Miscellaneous expenses 5000 5500 6050
Total operating expenses 156140 165544 180887.9
PBIT 74260 87896 97896.1
Interest payment 3815 3815 3815
PBT 152325 161729 177072.9
Tax payment 15232.5 16172.9 17707.29
Net profit 137092.5 145556.1 159365.6
Cash flow statement
Cash flow Statement Pre-operating year Year 1 Year 2 Year 3
Cash Inflow
Owner's capital 50000 0 0 0
Bank Loan 50000 0 0 0
Revenue 0 288000 316800 348480
Total cash Inflow 100000 288000 316800 348480
Cash Outflow
Purchase of fixed assets 65000 0 0 0
Market Research 5000
Registration and legal charges 5000 0 0 0
Purchase of Equipment’s and
Accessories 0 57600 63360 69696
Rent 0 8640 9504 10454.4
Utilities and maintenance 0 5000 5150 5304.5
Salaries 0 100200 105210 115731
Insurance 0 2000 2000 2000
Promotions and advertisements 10000 28800 31680 34848
Depreciation 0 6500 6500 6500
Miscellaneous expenses 8000 5000 5500 6050
Interest payment 0 3815 3815 3815
18