Our plan expects the opposite.
8c) Assumptions to Income Statement.
We assumed seasonality of retail/servicing revenues and calculated them on a per day basis around off/on/front shoulder/back shoulder seasons. We assumed custom board revenue will average over the year. Cost of goods sold was assumed to be 50% of revenue. We feel this is conservative, since the servicing side of the operation is typically greater than that. Rent will increase in the second and third years as we take on industrial space to expand our manufacturing capability. Salaries are based on store salaries that vary by season and manufacturing salaries. They were calculated on the basis of man-hours. The manufacturing salaries scale up with our production.
General administration was assumed to be 5% of revenue. We assumed that $200,000 worth of equipment would be required for manufacturing. This amount of equipment will be...
It was paid for by a loan, assumed to be 8% per year. Depreciation expense was based on 7-year MACRS. The tax rate was assumed to be 25% in the years in which we turned a profit.
SHAPE
Q2
Q3
Q4
Revenue
COGS
Net Profit
Rent
Salaries
General Admin
Depreciation Expense
Operating Income
Interest Expense
Net Income Before Taxes
Tax Expense
Net Income
Y3
Revenue
COGS
Net Profit
Rent
Salaries
General Admin
Depreciation Expense
Operating Income
Interest Expense
Net Income Before Taxes
Tax Expense
Net Income
