Business Plan Gem.docx

MCCHATIJ ENTERPRISES

BUSINESS PLAN FOR VIDEO PRODUCTION COMPANY AND STUDIO SUBMITTED TO GEM ARCHIE NOEL JATAU AND VICTOR SULE 01-Jan-18

email:[email protected]

Table of Contents CHAPTER 1................................................................................................................................3 1.0 Executive Summary.................................................................................................3 1.1 Objectives................................................................................................................3 1.2 Mission, Vision and value........................................................................................3 1.3 Key to success..........................................................................................................4 CHAPTER 2................................................................................................................................5 2.0 Company Summary.................................................................................................5 2.1 Company Ownership...............................................................................................5 2.2 Start Up Summary...................................................................................................5 2.3 Company Location...................................................................................................5 2.4 Legal Issues..............................................................................................................5 CHAPTER 3................................................................................................................................6 3.0 Business Description...............................................................................................6 3.1 Product and Services...............................................................................................6 3.2 Quality of Product...................................................................................................7 3.3 Affordability Of the product....................................................................................7 3.4 SWOT Analysis.........................................................................................................8 3.5 Competitive Comparison.........................................................................................8 CHAPTER 4................................................................................................................................9 4.0 Market Analysis.......................................................................................................9 4.1 Market Segmentation.............................................................................................9 4.2 Lead Time................................................................................................................9 4.3 Target Market........................................................................................................10 4.4 Marketing Strategies.............................................................................................10 CHAPTER 5 .............................................................................................................................11 4.0 Human Resource...................................................................................................11 CHAPTER 6..............................................................................................................................12 6.0 Financial Plan.........................................................................................................12 6.1 Current Sales…………………………………………………………………………………………………….12 6.2 Income Statement Projection...............................................................................14 6.3 Balance Sheet........................................................................................................14 6.4 Break-even Analysis...............................................................................................15 6.5 Ratio Analysis........................................................................................................15

McCHATIJ ENTERPRISES

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CHAPTER 1 1.0 Executive Summary This business plan show how a total investment of only N 10,000,000 would yield cumulative net profits in excess of N 14,000,000 over a three-year period, based on an average monthly sale of N 12,000,000. The funding request to GEM is to secure funding from GEM to cover expansion costs. About McChatij Enterprises the business provides high quality movies and indoor/outdoor event coverage to the residents of Nigeria and beyond, in a manner that generates fair and equitable returns for present and future owners, and superior value to our customers. We specialize in transforming creativity into motion pictures and offering different types of movies. Local businesses are slowly catching up with this new opportunity. McChatij Enterprises will offer a high quality video product, at a reasonable price, and will deliver it to the customer's door using mobile marketing strategy. To have a successful business there are a couple of methods that the business must consider first. (1) They must know their target market and by knowing this they have a competitive advantage that allows them to have an edge on the competitors. (2) They must also know their value chain which is a series of transactions between all participants that influences the final product. A value chain is a place where the businesses need to be in order to identify the needs of its target market. 1.1 Objectives The objectives for the first three years of operation include: 1. To create a video production based enterprise whose goal is to gain customers trust and loyalty. 2. To increase the efficiency of our production by 10% a year. 3. To develop a successful and sustainable enterprise, surviving off its own cash flow. 4. Achieve positive cash flow once production and marketing begins. 5. To stimulate the local economy by adding value.

1.2 MISSION, VISION and VALUE McChatij Enterprises’ mission is to offer its customers with a high quality video. We are committed to providing quality and value that our customers expect. McChatij Enterprises uses its strategy, staff, and systems to provide each customer with a seamless three-part customer experience -- service product, service environment, and service delivery -- each part of which meets or exceed our customers' expectations. Our VISION is to become a respected company -- as measured by our customers, our employees, and the community we live in. Our VALUES are critical to our success. They are the strong foundation of McChatij Enterprises, defining who we are, and set us apart from our competitors. They underlie our vision of the future. McCHATIJ ENTERPRISES

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These values include: • Performance excellence: We act as responsible owners, always seeking to meet or exceed expectations. • Teamwork: We act as a team, committed to each other, and bound by trust and loyalty. • Integrity: We treat one another, and all our stakeholders with dignity and respect. Honesty, ethical behaviour, and integrity are fundamental characteristics of our business conduct. 1.3 Keys to Success     

Increase gross margin to more than 40%. Excellent product and service that will build and maintain customer loyalty. A business location that will assure high company visibility and a high flow of customers. Our commitment to continuous improvement and total quality services. Increase our sales and expand our current customer base.

McCHATIJ ENTERPRISES

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CHAPTER 2 2.0 COMPANY OWNERSHIP The company is a partnership ownership structure owned by Archie N. Jatau and Sule Emmanuel Avong 2.1 Start Summary We begin as a region based business with little overhead. A 10million naira funding is needed to cover the expansion costs; the funds will be used exclusively to buy equipment, based on the list that will be made available. Our cash-flow analysis demonstrates the company's ability to manage its resources and meet its obligations, while maintaining adequate liquidity and generating positive cash flow. The following equipment will be needed for a studio set up and operation. Below is a list of equipment needed and cost: Cameras x 2 N 3,000,000 Drone N 1,000,000 Tripod Stand x 4 N 80,000 Camera Light x 4 N 440,000 Three Point Camera Light Kit N 40,000 Short Gun Microphone N 90,000 Boom Pole N 300,000 Desktop Computers x 2 N 300,000 LCD Monitor N 235, 000 Generator N 240,000 Channel Mixer N 80,000 Furniture & Fixtures N 300,000 TOTAL N 6,065,000 Casting & Production Expenses will amount to N 3, 300,000 2.2 COMPANY LOCATION McChatij Enterprises is located along Sir Ibrahim Yakowa Way Kamazou G.R.A of Chikun Local Government Area in Kaduna State. Because there is the availability of basic amenities for the production. And also cheap labour and high rate of customers.

2.3 LEGAL ISSUES The company has obtained the licence to operate with the Corporate Affairs Commision BN2413181. All the needed documents have been obtained and are therefore legal to operate. McCHATIJ ENTERPRISES

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CHAPTER 3 3.0 BUSINESS DESCRIPTION McChatij Enterprises is an entertainment (a music and events coverage and film production) company. It produces home movies in English and the 3 main local languages. McChatij commenced business in May 2016. It has produced and sold 16,000 CD/DVDs since then. It also offers services for social events and political rallies. Its average monthly sales’ (excluding coverage services) is N382, 000. Its value proposition is to provide entertainment through quality home video films and music cassettes in local languages performed by local people which the local people love and identify with thus exceeding customer expectation. Its key strengths are: 1. Its discs quality which is high comes with water proof packaging 2. Its production of local artists in local languages 3. It is situated in a High Street in a new layout Kamazou area of Kaduna metropolis with little competition in the immediate vicinity. 3.1 PRODUCTS & SERVICES The company will mainly be focused on the higher income generating type of stories (movies) McChatij Enterprises has compiled an exciting and diverse roster of comic and good actors, these highly talented actors will enable McChatij Enterprises penetrate the movie market place quickly. And also cover events with its creative crew by giving it a good state of arts and professional finishing. Below is our first product and currently on the market:

McCHATIJ ENTERPRISES

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3.2 QUALITY OF THE PRODUCT The quality of the product is excellent as the type of cameras and other equipment are high quality equipment and the CD and DVD production is of high standard which is a critical success factor.

3.3 AFFORDABILITY OF THE PRODUCT The product is very much affordable compared to the competitor’s product where the packaging can be easily damaged by water and also the disc used are of low quality and industry standards.

3.4 SWOT Analysis McChatij Enterprises considered the following in preparing themselves to take on long awaited life mantle of formalising its business. Strengths

Weaknesses



Great production capability.



Financial constraints.



Quality assurance-core value



Lack of editing skills.



Great commitment and drive from team



Need training in graphics and design.



Responsive to market trends.



Cost advantages.



Innovative culture.

Opportunities

Threats



Continued increase in population.



Volatile political area.



Technological innovations like animations and new distribution channels like mobile and internet have opened up doors for new opportunities.



Government policies.



Piracy poses a major threat.



Volatile costs.



International expansion



Fragmented market to expand and increase market share.

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3.5 COMPETITIVE COMPARISON McChatij Enterprises distinguish itself through the commitment it undertakes with each of its products. Contrasting the typical scenario in which a movie company spends more money producing the movie than they do in its marketing and promotion, McChatij Enterprises utilize a stable of experienced and resourceful producers to ensure the highest quality product within established production budgets. This, in conjunction with the Financing and expertise necessary guarantee the incentive necessary to create "winning" products in the marketplace. All of our competitors specialize in one aspect of video production. We are diversified company and we believe that there will be no down period for us. We are not seasonal based, our services are offered throughout the year. With our diversity, we are able to attract some organizations that like to entrust one company to handle all of their affairs.

McCHATIJ ENTERPRISES

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CHAPTER 4 4.1 MARKET ANALYSIS McChatij Enterprises distinguish itself from other independent Movie production companies through its products and Marketing plan. McChatij Enterprise utilise the success of its products to develop high profits throughout the production and sales of its merchandise.

4.1 MARKET SEGMENTATION The main market segments are: a) individuals (retail customers) accounting for more than 90 percent of our sales, and b) local businesses (corporate customers). Because McChatij Enterprises business model incorporates both B2B and B2C customers, we have utilized a two-pronged approach to identifying our target market. B2C customers, such as couples or families planning a wedding or party, typically have an expressed interest in our services, so the focus has been on using inbound marketing techniques as well as traditional advertising to communicate our services to them. Conversely, some potential B2B clients do not have an understanding of the applicability and affordability of video to promote their services, so we are actively developing this market by communicating the benefits of video use For example, major corporations have a clear-cut market strategy that includes web-based, print, broadcast, and radio advertising plans which are managed by either in-house or outside agencies, but often small- to medium-sized businesses assume that video production is beyond their available budget or not relevant to their operations. By outreaching to these potential customers through business associations and governmentsupport agencies, we will increase local awareness of how our services can provide smaller businesses with a competitive advantage at an affordable cost. With continued growth in the area, opportunities to sell movies will increase. The company will sell to individuals, but it will also accept some occasional (events) jobs to individuals and companies in the area. Our customer is defined as any individual or organization that has need for one of the services we provide. Our target customers are as follows: Television stations, future brides and grooms, families

4.2 LEAD TIME For our B2C customers like couples planning a wedding, we have made the most of our ability to provide them with a finish video faster than the industry standard. “Have it Before the Honeymoon’s over” has become our motto for this market segment, owing to the fact that our lead time for this and for parties is less than one week after the video is shot. For our B2B customers, lead times depend on the size of the project. A straight forward shoot with minimal graphic effects for a 30-second commercial will have lead time of one week. A complicated long-form video shoot with multiple levels of graphic rendering will have a lead time of one month or more.

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4.3 TARGET MARKET The target market McChatij Enterprises is very diverse, but will clearly target the intended market, based on cultural/traditional and social preferences. McChatij Enterprises will have distribution lines in the across the country and beyond, and therefore target the residents of those regions. 4.4 MARKETING STRATEGIES Packaging Designing and packaging should be attractive and perfect because they gear the product and door to door sales.

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CHAPTER 5 HUMAN RESOURCE Staffing is on a per-project basis. Sourcing is typically done through repeat hires and referrals. McChatij Enterprises only has one permanent person on the Management Team aside the owners that has five years of movie production and directing experience including, the making of and the production of Movies. The years of experience we hope to gain & maintain in both the business and creative sides of Movie publishing operations will enable McChatij Enterprises to generate profitable revenue for years to come. Our management is expected to use resources wisely, operate profitably, pay debts, and abide by laws and regulations. Our management philosophy is based on team work, responsibility, and mutual respect. People who will work at McChatij Enterprises want to work at McChatij Enterprises because we have an environment that encourages creativity and achievement. Staffing is categorised below:

ORGANISATIONAL CHART

CEO Executive Level

Film Administrator

Asst. Director

Operational Level Production Artist

Director of Photography

Film Editor

Sound Mixer

Crew Member s

Marketing Officer

RESPONSIBILTIES Chief Executive Officer (CEO) He plan, organize and get it executed from lower level professionals. He is more involved with the planning or monetary department only. The execution is done under his guidance.

Executive Level This level of the Film Company hierarchy features all the jobs profiles at central executive level. These professionals work according to the orders of the CEO and take care of the entire team provided to them respective of their field. Following are the profiles that get hold of middle level in the Company hierarchy 1. Film Administratot 2. Assistant Director 3. Production Artist

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Operational Level The professionals at this level of Film Company hierarchy of incorporates both fresher as well as experienced one. They take orders and execute them on regular basis. Following are profiles that get hold of middle level in the company hierarchy. 1. Director Of Photography 2. Film Editor 3. Sound Mixer 4. Crew Members 5. Marketing Officer

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CHAPTER 6 6.0 FINANCIAL PLAN McChatij Enterprises will generate over N 9, 000,000 in sales revenue in 2018 and N 16, 000,000 in 2019. Within five years McChatij aims to be making N 25, 000,000 per year. 6.1 CURRENT SALES Below are the nine months sales of McChatij Enterprise CASH FLOW 9MONTHS

JULY. 17

AUG.17

SEPT.17

OCT.17

NOV.17

DEC.17

JAN.18

FEB.18

MAR.18

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Total Cash Flow After 9 months

374,800

395,800

401,200

450,000

564,000

602,000

574,800

585,400

401,200

4,349,200

374,800

395,800

401,200

450,000

564,000

602,000

574,800

585,400

401,200

4,349,200

374,800

395,800

401,200

450,000

564,000

602,000

574,800

585,400

401,200

4,349,200

CD/DVD Production cost

105,881

111,814

113,520

130,500

163,560

174,580

166,692

169,766

116,348

Labour

37,480

39,580

41,700

45,000

56,400

60,200

57,480

58,540

40,120

436,500

Packaging

2,500

2,800

3,200

3,900

4,300

4,800

5,200

5,800

3,200

35,700

Transportation Cost

3,500

0

7,000

9,500

11,000

16,000

14,700

15,300

7,000

72,700

Fueling

3,500

5,000

9,000

11,500

18,000

14,000

10,200

14,500

11,000

96,700

Others

10,000

8,500

15,000

22,530

15,220

28,250

23,000

18,230

15,000

155,730

Accomodation

10,000

36,000

33,000

28,000

32,000

33,000

26,000

25,000

33,000

256,000

Feeding

7,200

7,800

12,300

15,580

18,250

25,000

29,500

29,270

12,300

157,200

Marketing Expenses

44,730

26,000

34,420

48,250

49,230

53,810

62,515

56,260

43,420

418,635

Bank Charges TOTAL C P O

2,105

2,680

500

200

250

480

340

220

500

Revenue

CASH ON HAND [Beginning of month] C Profit & Loss items (before adjustments)

226,896

240,174

110,000

257,904

150,009

158,306

269,640 413,530

132,060

314,960

368,210

413,530

548,570

135,240

196,040

410,120 744,360

192,360

395,627

392,886

281,888

936,240

1,115,413

1,307,927

1,252,661

7,275 2,889,101

1,427,239

179,513

192,734

119,812

1,456,074

6.2 CASH FLOW PROJECTION CASH FLOW YEAR 1

Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Total Cash Flow After 12 months

680,000

830,000

960,000

960,000

990,000

990,000

990,000

1,010,000

1,030,000

1,060,000

1,110,000

1,210,000

11,820,000

680,000

830,000

960,000

960,000

990,000

990,000

990,000

1,010,000

1,030,000

1,060,000

1,110,000

1,210,000

11,820,000

GEM FUND

10,000,000

Production cost

197,200

240,700

278,400

278,400

287,100

287,100

287,100

292,900

298,700

307,400

321,900

350,900

3,427,800

Labour

210,000

240,000

240,000

330,000

330,000

261,000

300,000

300,000

189,000

240,000

240,000

300,000

3,180,000

Assembly

12,000

7,000

3,000

11,000

9,000

10,000

8,000

10,000

9,000

13,000

10,000

11,000

113,000

Depreciation

0

0

0

0

0

0

0

0

0

0

0

198,689

198,689

Utilities

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

60,000

Others

9,000

5,000

7,000

9,000

10,000

10,000

8,000

10,000

10,000

10,000

15,000

17,000

120,000

Rent

200,000

0

0

0

0

0

0

0

0

0

0

0

200,000

ng & other Production Expenses

3,500,000

0

0

0

0

0

0

0

0

0

0

0

3,500,000

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

6,065,000

2,000

2,000

40,000

3,000

1,500

2,000

2,000

2,500

62,500

INDIRECT COSTS

0

0

0

Equipment

6,065,000

0

0

Bank Charges

2,000

3,000

1,500

CAPITAL COSTS/FIXED ASSETS

TCPO

1,000

-

B

COH [Beginning of month] CP [End of month] A-B+ C

10,200,200

500,700

534,900

634,400

643,100

575,100

648,100

620,900

513,200

577,400

593,900

885,089

1,427,239 C

1,907,039

2,236,339

2,661,439

2,987,039

3,333,939

3,748,839

4,090,739

4,479,839

4,996,639

5,479,239

5,995,339

1,907,039

2,236,339

2,661,439

2,987,039

3,333,939

3,748,839

4,090,739

4,479,839

4,996,639

5,479,239

5,995,339

6,320,250

McCHATIJ ENTERPRISES

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#REF!

Total Cash Flow After 12 months

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

900,000

1,350,000

1,200,000

1,500,000

1,650,000

1,740,000

1,350,000

1,500,000

1,650,000

1,200,000

1,200,000

1,350,000

16,590,000

900,000

1,350,000

1,200,000

1,500,000

1,650,000

1,740,000

1,350,000

1,500,000

1,650,000

1,200,000

1,200,000

1,350,000

16,590,000

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

900,000

1,350,000

1,200,000

1,500,000

1,650,000

1,740,000

1,350,000

1,500,000

1,650,000

1,200,000

1,200,000

1,350,000

16,590,000

Production Cost

261,000

391,500

348,000

435,000

478,500

504,600

391,500

435,000

478,500

348,000

348,000

391,500

4,811,100

Labour

90,000

135,000

120,000

150,000

165,000

174,000

135,000

150,000

165,000

120,000

120,000

135,000

1,659,000

Assembly

13,500

20,250

18,000

22,500

24,750

26,100

20,250

22,500

24,750

18,000

18,000

20,250

248,850 178,115

CASH FLOW YEAR 2

Sales

Loan

-

Depreciation

0

0

0

0

0

0

0

0

0

0

0

178,115

Utilities

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

60,000

Others

4,000,000

8,500

10,000

10,000

13,000

5,000

10,000

10,000

10,000

5,000

5,000

5,000

4,091,500

200,000

0

0

0

0

0

0

0

0

0

0

0

200,000

INDIRECT COSTS Rent Bank Charges CASH PAID OUT

3,000

4,000

1,500

2,000

2,000

2,000

2,000

3,000

2,000

2,000

2,000

2,500

4,572,500

564,250

502,500

624,500

688,250

716,700

563,750

625,500

685,250

498,000

498,000

737,365

CASH POSITION (Beginning of Month)

6,320,250

2,647,750

3,433,500

4,131,000

5,006,500

5,968,250

6,991,550

7,777,800

8,652,300

9,617,050

10,319,050

11,021,050

CASH POSITION (End Of Month)

2,647,750

3,433,500

4,131,000

5,006,500

5,968,250

6,991,550

7,777,800

8,652,300

9,617,050

10,319,050

11,021,050

11,633,685

TOTAL COSTS Profit & Loss items (before adjustments)

McCHATIJ ENTERPRISES

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28,000 11,633,685

CASH FLOW YEAR 3

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Actual

Total Cash Flow After 12 months

1,050,000

1,320,000

1,460,000

1,462,000

1,650,000

1,590,000

1,418,000

1,420,000

1,650,000

1,720,000

1,360,000

1,800,000

17,900,000

1,050,000

1,320,000

1,460,000

1,462,000

1,650,000

1,590,000

1,418,000

1,420,000

1,650,000

1,720,000

1,360,000

1,800,000

17,900,000

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1,050,000

1,320,000

1,460,000

1,462,000

1,650,000

1,590,000

1,418,000

1,420,000

1,650,000

1,720,000

1,360,000

1,800,000

17,900,000

Production Cost

304,500

382,800

423,400

423,980

478,500

461,000

411,220

411,800

478,500

498,800

394,400

522,000

5,190,900

Labour

105,000

132,000

146,000

146,200

165,000

159,000

141,800

142,000

165,000

172,000

136,000

180,000

1,790,000

Assembly

15,750

19,800

21,900

21,930

24,750

23,850

21,270

21,300

24,750

25,800

20,400

27,000

268,500 178,115

Sales

Loan

-

Depreciation

0

0

0

0

0

0

0

0

0

0

0

178,115

Utilities

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

60,000

Others

5,500,000

8,420

11,500

8,540

14,580

17,580

4,500

11,500

12,500

1,500

15,000

9,000

5,614,620

300,000

INDIRECT COSTS Rent

300,000

0

0

0

0

0

0

0

0

0

0

0

Bank Charges

3,200

2,800

3,210

2,740

1,940

2,500

3,520

3,240

3,510

2,000

2,560

2,640

CASH PAID OUT CASH POSITION (Beginning of Month) CASH POSITION (End Of Month)

6,233,450

550,820

611,010

608,390

689,770

668,930

587,310

594,840

689,260

705,100

573,360

923,755

11,633,685

6,450,235

7,219,415

8,068,405

8,922,015

9,882,245

10,803,315

11,634,005

12,459,165

13,419,905

14,434,805

15,221,445

6,450,235

7,219,415

8,068,405

8,922,015

9,882,245

10,803,315

11,634,005

12,459,165

13,419,905

14,434,805

15,221,445

16,097,690

33,860 16,097,690

TOTAL COSTS Profit & Loss items (before adjustments) -5,180,250

771,980

McCHATIJ ENTERPRISES

852,200

856,350

962,170

923,570

834,210

828,400

Page 16

964,250

1,016,900

789,200

878,885

4,497,865

Revenue and Expenses Assumptions: Number of Project (Movie) per year

1

CD/DVD Production Output in Year 1

150,000

CD/DVD Production Output in Year 2

200,000

CD/DVD Production Output in Year 3

220,000

Retail Price/Wholesale

N 200/ N 120

Labour wages (mobile marketing) per CD/DVD

N 20

Actor/Editors and others year 1

N 3,500,000

Actor/Editors and others year 2

N 4,000,000

Actor/Editors and others year 3

N 5,500,000

Other Expenses

N 100,000

Depreciation for the 3 years period

2%,5%,6% respectively

Taxation on net profit

10%

6.2 Projected Income Statement

YEAR 1 (N)

YEAR 2 (N)

YEAR 3 (N)

Forecast 11,820,000 3,427,800

Forecast 16,590,000 4,811,100

Forecast 17,900,000 5,190,900

8,392,200

11,778,900

12,709,100

Labour

3,180,000

1,659,000

1,790,000

Assembly

113,000

248,850

268,500

Utilities

60,000

60,000

60,000

Depreciation

72,700

178,115

198,689

Others

120,000

4,091,500

5,614,620

TOTAL EXPENSES NET PROFIT

3,545,700

5,739,765

7,931,809

4,846,500 484,650 4,361,850

6,039,135 603,914 5,435,221

4,777,291 477,729 4,299,562

INCOME Cash Sales Cost Of Goods Gross Profit

EXPENSES

Tax

NET PROFIT AFTER TAX

6.3 Balance Sheet Projection

ASSETS Equipment Cash

YEAR 1 (N) 6,065,000 6,320,250

YEAR 2 (N) 5,992,300 11,633,685

YEAR 3 (N) 5,814,185 11,097,690

TOTAL ASSETS LIABILITIES Equity

12,385,250

17,625,985

16,911,875

-

-

Net Worth

5,840,800

6,740,736

11,746,933

TOTAL LIABILITIES

12,385,250

17,625,985

16,911,875

500,000

6.4 Break-even Analysis McChatij Enterprises is expected to break even in the second month of the first year of operations. With the sales of 8,400 units of DVDs

6.5 Ratio Analysis YEAR 1

YEAR 2

YEAR 3

Return on Investment

28.9%

10.6%

33.7%

Return on Equity

5.9%

17%

4.1%

Debt Ratio

35.9%

22.4%

5%

Current Ratio

48%

30.2%

6.3%