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C. Discuss your companys financial projections and valuation in relation to the companys quarter six (Q6) statement of cash flow, balance sheet, income statement, stock

C. Discuss your companys financial projections and valuation in relation to the companys quarter six (Q6) statement of cash flow, balance sheet, income statement, stock history report by doing the following:

1. Calculate a valuation of the company and explain the key components of how you came to that valuation.

Cash Flow

Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6

Beginning Cash Balance 0 780,150 976,883 969,700 1,597,252 297,082

Receipts and Disbursements from Operating Activities

Revenues 0 358,926 413,976 867,400 1,133,055 2,728,151

- Rebates 0 0 0 12,900 13,200 0

- Production 0 118,519 124,533 283,036 369,520 859,291

- Research and Development 30,000 0 0 872,296 813,427 90,000

- Quality Costs 0 45,257 23,364 34,375 40,801 85,541

- System Improvement Costs 0 5,000 40,000 750,125 228,030 73,010

- Advertising 0 39,661 49,661 119,742 130,742 124,742

- Internet Marketing Expenses 0 1,000 1,000 13,600 5,600 5,500

- Sales Force Expense 0 35,206 70,518 72,736 111,580 149,035

- Store Expense 200,000 146,000 75,000 75,000 211,000 209,000

- Marketing Research 0 15,000 15,000 15,000 15,000 15,000

- Shipping 0 5,474 6,180 11,038 14,325 30,388

- Excess Capacity Cost 0 21,076 35,904 0 0 0

- Income Taxes 0 0 0 0 0 0

+ Interest Income 150 0 0 0 0 0

- Interest Charges 0 0 0 0 0 1,808

+ Other Income 0 0 0 0 0 0

- Other Expenses 0 0 0 0 0 0

= Net Operating Cash Flow -229,850 -73,267 -27,183 -1,392,448 -820,170 1,084,836

Investing Activities

Fixed Production Capacity 480,000 240,000 480,000 480,000 480,000 480,000

= Total Investing Activities 480,000 240,000 480,000 480,000 480,000 480,000

Financing Activities

Increase in Common Stock 1,500,000 500,000 500,000 2,500,000 0 0

+ Borrow Conventional Loan 0 0 0 0 0 100,000

- Repay Conventional Loan 0 0 0 0 0 0

+ Borrow Emergency Loan 0 0 0 0 0 0

- Repay Emergency Loan 0 0 0 0 0 0

- Deposit 3 Month Certificate 10,000 0 0 0 0 0

+ Withdraw 3 Month Certificate 0 10,000 0 0 0 0

= Total Financing Activities 1,490,000 510,000 500,000 2,500,000 0 100,000

Cash Balance, End of Period 780,150 976,883 969,700 1,597,252 297,082 1,001,918

Balance Sheet

Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6

Current Assets

Cash 780,150 976,883 969,700 1,597,252 297,082 1,001,918

+ 3 Month Certificate of Deposit 10,000 0 0 0 0 0

Long Term Assets

+ Net Fixed Assets 480,000 700,000 1,150,000 1,580,000 1,990,000 2,380,000

= Total 1,270,150 1,676,883 2,119,700 3,177,252 2,287,082 3,381,918

Debt

Conventional Bank Loan 0 0 0 0 0 100,000

+ Emergency Loan 0 0 0 0 0 0

Equity

+ Common Stock 1,500,000 2,000,000 2,500,000 5,000,000 5,000,000 5,000,000

+ Retained Earnings -229,850 -323,117 -380,300 -1,822,748 -2,712,918 -1,718,082

= Total 1,270,150 1,676,883 2,119,700 3,177,252 2,287,082 3,381,918

Income Statement

Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6

Gross Profit

Revenues 0 358,926 413,976 867,400 1,133,055 2,728,151

- Rebates 0 0 0 12,900 13,200 0

- Cost of Goods Sold 0 118,519 124,533 283,036 369,520 859,291

= Gross Profit 0 240,407 289,443 571,464 750,335 1,868,860

Expenses

Research and Development 30,000 0 0 872,296 813,427 90,000

+ Quality Costs 0 45,257 23,364 34,375 40,801 85,541

+ System Improvement Costs 0 5,000 40,000 750,125 228,030 73,010

+ Advertising 0 39,661 49,661 119,742 130,742 124,742

+ Internet Marketing Expenses 0 1,000 1,000 13,600 5,600 5,500

+ Sales Force Expense 0 35,206 70,518 72,736 111,580 149,035

+ Store Expense 200,000 146,000 75,000 75,000 211,000 209,000

+ Marketing Research 0 15,000 15,000 15,000 15,000 15,000

+ Shipping 0 5,474 6,180 11,038 14,325 30,388

+ Excess Capacity Cost 0 21,076 35,904 0 0 0

+ Depreciation 0 20,000 30,000 50,000 70,000 90,000

= Total Expenses 230,000 333,674 346,627 2,013,912 1,640,505 872,216

Operating Profit -230,000 -93,267 -57,183 -1,442,448 -890,170 996,645

Miscellaneous Income and Expenses

+ Other Income 0 0 0 0 0 0

- Other Expenses 0 0 0 0 0 0

= Earnings Before Interest and Taxes -230,000 -93,267 -57,183 -1,442,448 -890,170 996,645

+ Interest Income 150 0 0 0 0 0

- Interest Charges 0 0 0 0 0 1,808

= Income Before Taxes -229,850 -93,267 -57,183 -1,442,448 -890,170 994,836

- Loss Carry Forward 0 0 0 0 0 994,836

= Taxable Income 0 0 0 0 0 0

- Income Taxes 0 0 0 0 0 0

= Net Income -229,850 -93,267 -57,183 -1,442,448 -890,170 994,836

Earnings per Share -15 -5 -2 -29 -18 20

Stock History

Stock Type Name of Owner Shares Price Per Share Total Amount Quarter

Common Stock Executive Team 15,000 100 1,500,000 1

Common Stock Executive Team 5,000 100 500,000 2

Common Stock Executive Team 5,000 100 500,000 3

Common Stock Venture Capitalists 25,000 100 2,500,000 4

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Previous Question Next Question

Cash Flow
Report Item	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 5	Quarter 6
Beginning Cash Balance	0	780,150	976,883	969,700	1,597,252	297,082
Receipts and Disbursements from Operating Activities
Revenues	0	358,926	413,976	867,400	1,133,055	2,728,151
- Rebates	0	0	0	12,900	13,200	0
- Production	0	118,519	124,533	283,036	369,520	859,291
- Research and Development	30,000	0	0	872,296	813,427	90,000
- Quality Costs	0	45,257	23,364	34,375	40,801	85,541
- System Improvement Costs	0	5,000	40,000	750,125	228,030	73,010
- Advertising	0	39,661	49,661	119,742	130,742	124,742
- Internet Marketing Expenses	0	1,000	1,000	13,600	5,600	5,500
- Sales Force Expense	0	35,206	70,518	72,736	111,580	149,035
- Store Expense	200,000	146,000	75,000	75,000	211,000	209,000
- Marketing Research	0	15,000	15,000	15,000	15,000	15,000
- Shipping	0	5,474	6,180	11,038	14,325	30,388
- Excess Capacity Cost	0	21,076	35,904	0	0	0
- Income Taxes	0	0	0	0	0	0
+ Interest Income	150	0	0	0	0	0
- Interest Charges	0	0	0	0	0	1,808
+ Other Income	0	0	0	0	0	0
- Other Expenses	0	0	0	0	0	0
= Net Operating Cash Flow	-229,850	-73,267	-27,183	-1,392,448	-820,170	1,084,836
Investing Activities
Fixed Production Capacity	480,000	240,000	480,000	480,000	480,000	480,000
= Total Investing Activities	480,000	240,000	480,000	480,000	480,000	480,000
Financing Activities
Increase in Common Stock	1,500,000	500,000	500,000	2,500,000	0	0
+ Borrow Conventional Loan	0	0	0	0	0	100,000
- Repay Conventional Loan	0	0	0	0	0	0
+ Borrow Emergency Loan	0	0	0	0	0	0
- Repay Emergency Loan	0	0	0	0	0	0
- Deposit 3 Month Certificate	10,000	0	0	0	0	0
+ Withdraw 3 Month Certificate	0	10,000	0	0	0	0
= Total Financing Activities	1,490,000	510,000	500,000	2,500,000	0	100,000
Cash Balance, End of Period	780,150	976,883	969,700	1,597,252	297,082	1,001,918

Balance Sheet
Report Item	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 5	Quarter 6
Current Assets
Cash	780,150	976,883	969,700	1,597,252	297,082	1,001,918
+ 3 Month Certificate of Deposit	10,000	0	0	0	0	0
Long Term Assets
+ Net Fixed Assets	480,000	700,000	1,150,000	1,580,000	1,990,000	2,380,000
= Total	1,270,150	1,676,883	2,119,700	3,177,252	2,287,082	3,381,918
Debt
Conventional Bank Loan	0	0	0	0	0	100,000
+ Emergency Loan	0	0	0	0	0	0
Equity
+ Common Stock	1,500,000	2,000,000	2,500,000	5,000,000	5,000,000	5,000,000
+ Retained Earnings	-229,850	-323,117	-380,300	-1,822,748	-2,712,918	-1,718,082
= Total	1,270,150	1,676,883	2,119,700	3,177,252	2,287,082	3,381,918

Income Statement
Report Item	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 5	Quarter 6
Gross Profit
Revenues	0	358,926	413,976	867,400	1,133,055	2,728,151
- Rebates	0	0	0	12,900	13,200	0
- Cost of Goods Sold	0	118,519	124,533	283,036	369,520	859,291
= Gross Profit	0	240,407	289,443	571,464	750,335	1,868,860
Expenses
Research and Development	30,000	0	0	872,296	813,427	90,000
+ Quality Costs	0	45,257	23,364	34,375	40,801	85,541
+ System Improvement Costs	0	5,000	40,000	750,125	228,030	73,010
+ Advertising	0	39,661	49,661	119,742	130,742	124,742
+ Internet Marketing Expenses	0	1,000	1,000	13,600	5,600	5,500
+ Sales Force Expense	0	35,206	70,518	72,736	111,580	149,035
+ Store Expense	200,000	146,000	75,000	75,000	211,000	209,000
+ Marketing Research	0	15,000	15,000	15,000	15,000	15,000
+ Shipping	0	5,474	6,180	11,038	14,325	30,388
+ Excess Capacity Cost	0	21,076	35,904	0	0	0
+ Depreciation	0	20,000	30,000	50,000	70,000	90,000
= Total Expenses	230,000	333,674	346,627	2,013,912	1,640,505	872,216
Operating Profit	-230,000	-93,267	-57,183	-1,442,448	-890,170	996,645
Miscellaneous Income and Expenses
+ Other Income	0	0	0	0	0	0
- Other Expenses	0	0	0	0	0	0
= Earnings Before Interest and Taxes	-230,000	-93,267	-57,183	-1,442,448	-890,170	996,645
+ Interest Income	150	0	0	0	0	0
- Interest Charges	0	0	0	0	0	1,808
= Income Before Taxes	-229,850	-93,267	-57,183	-1,442,448	-890,170	994,836
- Loss Carry Forward	0	0	0	0	0	994,836
= Taxable Income	0	0	0	0	0	0
- Income Taxes	0	0	0	0	0	0
= Net Income	-229,850	-93,267	-57,183	-1,442,448	-890,170	994,836
Earnings per Share	-15	-5	-2	-29	-18	20

Stock History
Stock Type	Name of Owner	Shares	Price Per Share	Total Amount	Quarter
Common Stock	Executive Team	15,000	100	1,500,000	1
Common Stock	Executive Team	5,000	100	500,000	2
Common Stock	Executive Team	5,000	100	500,000	3
Common Stock	Venture Capitalists	25,000	100	2,500,000	4