PROJECT THE BUDGET AND COSTS SALES

YENI CAROLINA RUIZ ZULUAGA

Composicin de la estructura financiera del

COMPOSITION OF THE FINANCIAL STRUCTURE OF TRAINING PROJECT

RICARDO SANDOVAL

Teacher

TECHNOLOGY MANAGEMENT MARKETS

NATIONAL LEARNING SERVICE

SENA

2016

FINANCIAL AREA
Inside the financial area, it is important to show each of the items that it makes
possible to determinate if the project is feasible from this point of view, so, shown in
detail at this point necessary to operate fixed costs, the variable cost structure of
each product, breakeven, sales projections, states projected five-year results, free
cash flows that can reach to establish the NPV and IRR of the project.

Table1. Monthly Fixed Costs

MONTHLY FIXED COSTS

CATEGORY PARTIAL SUBTOTAL

General administrative expenses

Rent $ 300.000

cleanliness $ 120.000

Cafetera $ 30.000

Stationery $ 30.000

Administrative salaries $ 1.515.000

$ 3.887.352
Social benefits(39.01% Administrative $ 591.002
Salaries)

Parafiscales annexes to payroll (9% $ 136.350

administrative salary)
Accountant $ 200.000

Security guard $ 515.000

Depreciation $ 50.000

Publicservices $ 200.000

Transport $ 200.000

Sales general expenses

Communication (fax, cell phone, $ 100.000
Internet)
Merchandising (Brand) $ 500.000
$ 730.000
Advertising (Brand) $ 30.000

Promotion (Brand) $ 100.000

Total monthly bank fee $ 581.230

Total Costs and Fixed Expenses $ 5.198.582

 Table 2. Unit variable costs fique bags.

VARIABLE COSTS UNIT TO FIQUE BAG

DIRECT MANUFACTURING COST (DMC):

Raw material purchased per month to produce 50 monthly bags 5 workers.

Feedstock 1 Buy 2 unit Price buy Quantity Cost of Participation

3 of Feedstock 6= 5/CDF
Feedstoc used per
k used bag5=(3/2
per bag 4 )*(4)

20000 $440.000 400 $ 8.800 74,6%

Fique Grams

applies Unit 50 $150.000 1 $ 3.000 25,4%

(keychains
seeds and
artificial
stones)

Total direct manufacturing cost (DMC) $ 11.800 100%

INDIRECT MANUFACTURING COST: PACKAGING BUOYED FOR FIQUE BAGS SELLING
MONTHLY

Applicable Buy 2 unit Buy 3 Amount of Cost of Participation

tem 1 Price packaging packaging 6=5/CIF
used per used per
bag 4 bag
5=(3)*(4)

100 $30.000 1 $ 300 100%

Packing bags

Total indirect manufacturing cost (IMC) $ 300 100%

 TOTAL INDIRECT MANUFACTURING COST (IMC)

$ 782.800
Monthly salary (689460*1,52)

192
monthly working hours (8horas*6
days*4weeks)

$ 4.077
Hourvalue

$ 32.617
Total Cost of the direct Workforce
(CDW) by bag (the
elaboration of a fique bag is 8
hours.)
 Direct Manufacturing Cost:Packaging buoyed for monthly sells synthetic leather
bags.

ApplicableCa Purchase Purchasep Amount of almanac Cost of Cost of

tegory1 Unit 2 rice3 used pe bag 4 packaging packaging
used per used per bag
bag 5=(3)*(4)
5=(3)*(4)

Empaque Bolsas 100 $30.000 1 $ 300 100,%

Total Indirect Manufacturing Cost (IMC) $ 300 100%

Continuation:

Cost of Direct Work Force(DWF)

Monthly salary(515000*1,52) $ 782.800

Monthly Working h 192

Hours (8horas*6dias*4semanas)

valuehour $ 4.077

Total Cost of Direct Work Force $ 12.231

(DWF) (the elaboration of a
synthetic leather bag is three
hours.)

Table 4. Variable Costs.

VARIABLE COSTS DISCRIMINATED

Line 1 CostRaw Indirect Workforce Variable Cost
Material2 Costs3 Cost 4 Unitary (VCU)
5=2+3+4
Fique Bag $ 11.800 $ 300 $ 32.617 $ 44.717

Synthetic $ 4.050 $ 300 $ 12.231 $ 16.581

leather Bag
Table5. Coststructure Year 1

COST STRUCTURE YEAR 1

Products CVU MCU PVU MCU $ Partic. MCUPP

Portfolio (2) % (4) (5)=(4) Venta (7)=(5)*(6)
(1) (3) - %
(2) (6)

Fique Bag $ 25% $59.622 $14.606 27% $ 4.025

44.717

$ 45% $30.148 $13.556 73% 9.904

Synthetic 16.581
Leather Bag TOTAL $ 13.928

Note: The value of the sale participation was found with reference to the target
market (number fique and synthetic leather of bags sold monthly), according to the
capacity (120 fique bags and 320 synthetic leather bags, for a total of 440 bags sold
in a month).

Table6. Break even

BREAKEVEN

Mcupp $ 13.928

Fixed costs be $ 5.779.812

TOTAL BREAKEVEN 415

This indicates that we have to produce and sell 415 units a month, for produce no
gain or loss.

Table 7. Cost structure for breakeven.

 Cost structure for breakeven (BE)

Line 1 Cvu %M Pvu 4 % BE BE Sales BE Total

Cu3 Units 6 7=(4)*(6 Variable
Part. ) Cost8=(2
)*(6)
Vta. 5

Fique bag $4 4.717 25% $ 27% 112 $ $

59.62 6.680.30 5.010.225
2 0

Synthetic $ 16.581 45% $ 73% 303 $9.132.7 $

Leather Bag 30.14 45 5.023.012
8
100% 376 $ $
13.543. 10.033.2
919 37

Given that, it is expected to achieve in five months breakeven it is projected that

sales for the first year are as follows:

Table 8. Sales Forecast Year 1.

 SALES FORECASTYEAR 1.

Month1 415 Units Breakeven/5 Months 83

Month Mes 1 + Mes 1 166

From the total 2 projected sales
for year 1, the projection of
sales for the Month Mes 1 + Mes 2 249 next four years
is obtained, 3 taking into
account the increase of 7%
given by Month4 Mes 1 + Mes 3 332 internal
factors.
Month5 Mes 1 + Mes 4 415

Month Mes 1 + Mes 5 498

6

Subtotal first semester sales $1.74

3

Month Mes 1 + Mes 6 581

Table 9. 7 Projected
sales for years one to
five Month Mes 1 + Mes 7 664
8

Month Mes 1 + Mes 8 747

9

Month1 Mes 1 + Mes 9 830

PROJECTED SALES FOR YEARS ONE TO FIVE
0
Year Budgeted Porcentual Variation for
Month1 Mes 1 + Mes 10 913
units next year
1
1
Month1 6474 Mes 1 + Mes 11 7% 996
2
2 6927 7%
Subtotal second semester sales 4.731
3 7412 7%

4 7930 7%
TOTAL ANNUAL SALES 6.474
5 8486 7%
 Table 10. Income statement from 1 to 5 years with vertical and horizontal
analysis, associated entrepreneurs and investors.

PROJECTED INCOME STATEMENT

CATEGORY YEAR 1 YEAR 2 YEAR3

Vlr. Nomi. Vertic Vlr. Nomi. Verti Verti Vlr. Nomi. Verti Horiz
al cal cal cal ontal
analy oper anal oper analy
sis atio ysis atio sis
n n

Sales $ 100% $273.453.6 100 10,9 $ 100 11,0%

246.683.560 60 % % 303.402.92 %
1

- CMV $ 63% $ 63% 10,9 $ 63% 11,0%

156.518.495 173.503.88 % 192.505.94
2 7

= Brute Utility $ 90.165.065 37% $ 37% 10,9 $ 37% 11,0%

99.949.778 % 110.896.97
 4

- CF $ 62.382.978 25% $ 24% 3,6% $ 22% 3,8%

64.628.765 67.084.658

= operational $ 27.782.087 11% $ 13% 27,1 $ 14% 24,0%

Utility 35.321.013 % 43.812.316

- $ 4.596.325 2% $ 3.972.039 1% - $ 3.183.893 1% -

Intereses 13,6 19,8%
Bancarios %

= $ 23.185.763 9% $ 11% 35,2 $ 13% 29,6%

31.348.974 % 40.628.423
Utility Without
taxation

- $ 8.115.017 3% $ 4% 35,2 $ 5% 29,6%

Imporrenta 10.972.141 % 14.219.948

= Utillity Story $ 15.070.746 6% $ 7% 35,2 $ 9% 29,6%

20.376.833 % 26.408.475

Table10 Continuation:

PROJECTED INCOME STATEMENT

CATEGORY YEAR 4 YEAR 5

Vlr. Nomi. Anl Anl. Vlr. Nomi. Anl. Anl.

Vert.
Hori. Vert. Hori.

Sales $ 100% 10,8% $ 100% 10,8%

 336.275.390 372.445.274

- CMV $ 63% 10,8% $ 63% 10,8%

213.362.855 236.312.013

= Brute Utility $ 37% 10,8% $ 37% 10,8%

122.912.535 136.133.262

- CF $ 21% 0,0365 $ 19% 0,0355

69.533.248 72.001.679

= operational $ 16% 21,8% $ 17% 20,1%

Utility 53.379.287 64.131.583

- $ 2.188.876 1% -31,3% $ 932.691 0% -57,4%

Intereses
Bancarios

= Utility $ 15% 26,0% $ 17% 23,5%

Without 51.190.411 63.198.892
Taxation

- $ 5% 26,0% $ 6% 23,5%
Imporrenta 17.916.644 22.119.612

= Story Utillity $ 10% 26,0% $ 11% 23,5%

33.273.767 41.079.280

Table 11. Free Cash Flow.

FREE CASH FLOW

CATEGORY Ao 1 Ao 2 Ao 3 Ao 4 Ao 5

Story Utillity $ $ $ $ $
 15.070.746 0.376.833 26.408.47 33.273.76 41.079.28
5 7 0

+ Depreciation and amortization of $ 600.000 $ 600.000 $ 600.000 $ 600.000 $ 600.000

deferred *

+ Interests $ $ $ $ $ 932.691
4.596.325 3.972.039 3.183.893 2.188.876

= Gross Cash Flow(GCF) $ $ $ $ $

20.267.070 24.948.87 30.192.36 36.062.64 42.611.97
2 8 3 1

-Increased operating net working capital $ - $ $ $ $

** (IONWC) 2.598.032 2.906.559 3.190.257 3.510.272

- Aumento en los activos fijos por

reposicin

= FREE CASH FLOW (FCF) $ $ $ $ $

20.267.070 22.350.84 27.285.80 32.872.38 39.101.69
0 9 6 9

Table 12. Net Present Value and Internal Rate of Return

Net Present Value (NPV) and Internal Rate of Return(IRR)

Years Free Cash Flow Interest rate and Initial Investment
opportunity cost

1 $20.267.070 24% $51.537.763

2 $22.350.840 24%

3 $27.285.809 24%

4 $32.872.386 24%

5 $39.101.699 24%

VPN $20.895.938

IRR 44.6%

Table13. Financing

FINANCING

Sources of Financing value Participation Destination of

Financing 1 2 resources 4
%

3=2/IT

Entrepreneurs $31.537.763 61.2% Working Capital (WC)

Bank $20.000.000 38.8% Fixed Assets(AF)

Total $51.537.763

Table 14. Bank Financing Conditions

BANK FINANCING CONDITIONS

S = Search value of the fee payable

P = Present value of credit to take $ 20.000.000

 A = Agreed interest rate (Annual) 24% 6,0%

N = number of periods 20

Fee Payable (quarterly) $

1.743.691

Table 14. Continuation.

Amortization of debt with the bank Interests Amortization

Ye Perio Share Interest Amrt. Balance
ar d

$
1 0 20.000.000 $ $ 2.378.440
4.596.325
1 $ 1.743.691 $1.200.0 $ $ 19.456.309
00 543.691

2 $ 1.743.691 $1.167.3 $ $ 18.879.996

79 576.313

3 $ 1.743.691 $1.132.8 $ $ 18.269.105

00 610.891

4 $ 1.743.691 $1.096.1 $ $ 17.621.560

46 647.545

5 $ 1.743.691 $1.057. $ $ 16.935.163

294 686.398 $ $ 3.002.726
2 3.972.039

6 $ 1.743.691 $1.016. $ $ 16.207.581

110 727.581

7 $ 1.743.691 $ $ $ 15.436.345
972.455 771.236

8 $ 1.743.691 $ $ $ 14.618.834
926.181 817.510

9 $ 1.743.691 $ $ $ 13.752.273 $ 3.790.872

877.130 866.561 $
3 3.183.893

10 $ 1.743.691 $ $ $ 12.833.719
825.136 918.555

11 $ 1.743.691 $ $ $ 11.860.051
770.023 973.668

12 $ 1.743.691 $ $1.032.0 $10.827.962

711.603 88

13 $ 1.743.691 $ $1.094.0 $ 9.733.949 $ $ 4.785.888

649.678 13 2.188.876
4

14 $ 1.743.691 $ $1.159.6 $ 8.574.295

584.037 54
 15 $ 1.743.691 $ $1.229.2 $ 7.345.061
514.458 33

16 $ 1.743.691 $ $1.302.9 $ 6.042.074

440.704 87

17 $ 1.743.691 $ $1.381.1 $ 4.660.907 $ 932.691 $ 6.042.074

362.524 67
5

18 $ 1.743.691 $ $1.464.0 $ 3.196.871

279.654 37

19 $ 1.743.691 $ $1.551.8 $ 1.644.992

191.812 79

20 $ 1.743.691 $ $1.644.9 $0
98.699 92

As shown in the above analysis it is evident that the project is viable from a financial
point of view, it is a positive VPN, higher TIR capital cost and a percentage of
positive utility and additionally a free cash flow sufficient to cover the requirements
of the company.