You’ll start with using historical income statements and build a ten year forecast using the information (attached in the document) in Lecture 2. This probably sounds easier than it is. I would suggest that you start with the unit growth (compounded) and forecast the units first. From there you have to calculate what you will charge per unit for general revenue and guess what you want to do with Management revenue. From here, you’ll need to decide what expenses are fixed and what are variable and how the forecast should be calculated.
2007
UNITS
500,000
PRICE
2008
UNITS
540,000
PRICE
2009
UNITS
577,800
PRICE
REVENUES
Products
Service
$25,000,000.00
$1,500,000.00
$50.00 $28,080,000.00
$3.00 $1,593,000.00
$52.00 $30,946,968.00
$2.95 $1,675,620.00
53.56
2.90
TOTAL REVENUE
$26,500,000.00
$53.00 $29,673,000.00
$54.95 $32,622,588.00
$56.46
EXPENSES
COGS
Administration
Utilities
Rent
Depreciation
Consultants
Bad debt
$10,000,000.00
$5,000,000.00
$200,000.00
$500,000.00
$500,000.00
$35,000.00
$15,000.00
$20.00 $11,124,000.00
$10.00 $5,151,600.00
$0.40
$205,200.00
$1.00
$513,000.00
$1.00
$502,200.00
$0.07
$43,200.00
$0.03
$10,800.00
$20.60 $12,260,916.00
$9.54 $5,304,204.00
$0.38
$213,786.00
$0.95
$531,576.00
$0.93
$502,686.00
$0.08
$40,446.00
$0.02
$17,334.00
$21.22
$9.18
$0.37
$0.92
$0.87
$0.07
$0.03
TOTAL EXPENSES $16,250,000.00
$32.50 $17,550,000.00
$32.50 $18,870,948.00
$32.66
EBIT
Margin
$10,250,000.00
38.68%
$20.50 $12,123,000.00
40.86%
$22.45 $13,751,640.00
42.15%
$23.80
EBITDA
Margin
$10,750,000.00
40.57%
$21.50 $12,625,200.00
42.55%
$23.38 $14,254,326.00
43.69%
$24.67
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