MCCHATIJ ENTERPRISES

BUSINESS PLAN FOR

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

email:archiejatau@gmail.com
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 Page 2

 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 Page 3
 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 Page 4

 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 Page 5

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 Page 6

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  Government policies.
and internet have opened up doors for
new opportunities.  Piracy poses a major threat.

 International expansion  Volatile costs.

 Fragmented market to expand and

increase market share.

McCHATIJ ENTERPRISES Page 7

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 Page 8

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 government-
support 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.

McCHATIJ ENTERPRISES Page 9

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.

McCHATIJ ENTERPRISES Page 10

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
Operational Level
Level
Film Asst. Production Film Sound
Crew Marketing
Director of
Administrator Director Artist Editor Mixer Member Officer
Photography
s

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

McCHATIJ ENTERPRISES Page 11

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

McCHATIJ ENTERPRISES Page 12

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
JULY. 17 AUG.17 SEPT.17 OCT.17 NOV.17 DEC.17 JAN.18 FEB.18 MAR.18 Total Cash Flow After 9 months
9MONTHS
Actual Actual Actual Actual Actual Actual Actual Actual Actual

Revenue 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
105,881 111,814 113,520 130,500 163,560 174,580 166,692 169,766 116,348
cost 1,252,661
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 2,105 2,680 500 200 250 480 340 220 500 7,275
TOTAL C P O
226,896 240,174 314,960 368,210 395,627 392,886 281,888
269,640 410,120 2,889,101
CASH ON HAND
[Beginning of month] 110,000 257,904 413,530 548,570 936,240 1,115,413 1,307,927
413,530 744,360
C 1,427,239

Profit & Loss items

(before adjustments) 150,009 158,306 132,060 135,240 196,040 192,360 179,513 192,734 119,812 1,456,074
 6.2 CASH FLOW PROJECTION
Total Cash Flow After 12
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
CASH FLOW YEAR 1 months
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
Sales 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

INDIRECT COSTS
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
CAPITAL COSTS/FIXED ASSETS 0 0 0 0 0 0 0 0 0 0 0 0 -
Equipment 6,065,000 0 0 0 0 0 0 0 0 0 0 6,065,000
Bank Charges 2,000 3,000 1,500 1,000 2,000 2,000 40,000 3,000 1,500 2,000 2,000 2,500 62,500
TCPO B
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
#REF!
COH [Beginning of month] 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
CP [End of month]
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
A-B+ C

McCHATIJ ENTERPRISES Page 14

 Total Cash Flow After 12
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
months
CASH FLOW YEAR 2
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
Sales 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
Loan 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
Depreciation 0 0 0 0 0 0 0 0 0 0 0 178,115 178,115
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

INDIRECT COSTS
Rent 200,000 0 0 0 0 0 0 0 0 0 0 0 200,000
Bank Charges 3,000 4,000 1,500 2,000 2,000 2,000 2,000 3,000 2,000 2,000 2,000 2,500 28,000
CASH PAID OUT 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 11,633,685

CASH POSITION (Beginning of

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
Month)

CASH POSITION (End Of

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
Month)

TOTAL COSTS Profit & Loss items (before adjustments)

McCHATIJ ENTERPRISES Page 15

 Total Cash Flow After 12
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
months
CASH FLOW YEAR 3
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual
Sales 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
Loan 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
Depreciation 0 0 0 0 0 0 0 0 0 0 0 178,115 178,115
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

INDIRECT COSTS
Rent 300,000 0 0 0 0 0 0 0 0 0 0 0 300,000
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 33,860
CASH PAID OUT 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 16,097,690
CASH POSITION
(Beginning of 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
Month)
CASH POSITION
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
(End Of Month)
TOTAL COSTS Profit & Loss items (before adjustments)
-5,180,250 771,980 852,200 856,350 962,170 923,570 834,210 828,400 964,250 1,016,900 789,200 878,885 4,497,865

McCHATIJ ENTERPRISES Page 16

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)

INCOME
Forecast Forecast Forecast
Cash Sales 11,820,000 16,590,000 17,900,000
Cost Of Goods 3,427,800 4,811,100 5,190,900
Gross Profit 8,392,200 11,778,900 12,709,100

EXPENSES
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 3,545,700 5,739,765 7,931,809
NET PROFIT 4,846,500 6,039,135 4,777,291
Tax 484,650 603,914 477,729
NET PROFIT AFTER TAX 4,361,850 5,435,221 4,299,562
6.3 Balance Sheet Projection

ASSETS YEAR 1 (N) YEAR 2 (N) YEAR 3 (N)

Equipment 6,065,000 5,992,300 5,814,185
Cash 6,320,250 11,633,685 11,097,690

TOTAL ASSETS 12,385,250 17,625,985 16,911,875

LIABILITIES
Equity 500,000 - -

Net Worth 5,840,800 6,740,736 11,746,933

TOTAL LIABILITIES 12,385,250 17,625,985 16,911,875

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%