The Comfy is a product dreamed by the Speciale brothers, Michael and Brian. The Speciale Brothers hit the jackpot on Shark Tank and agreed to sell a 30% stake in their business for $50,000 on Dec 31, 2020. The first year went amazing! The company went from just a few protypes they made to over $15 million in sales. The companys first year results are given below.The retail price of a Comfy is $40, but the wholesale price (what they sell to stores for) is $30.

They have a negotiated contract with a manufacturer in Bangladesh for the following orders:

Production Costs
Monthly Production Bill with under 20,000 order	$13/Comfy
Monthly Production Bill with under 20,001-99,999 order	$12/Comfy
Monthly Production Bill with 100,000+ order	$11/Comfy

Shipping costs are $4 per Comfy (either to the customer directly or to the store/QVC).

Additionally, the brothers have rolled out an advertising platform and website: the comfy Customer acquisition costs (the cost of accepting credit cards and advertising on Facebook) are approximately $6 per comfy and occur the same month as the sale, regardless of the venue sold.

Creating a Comfy Proforma

Using the percentage of sales approach and the companys expectations of sales in the chart below, create a proforma income statement and balance sheet. Determine any additional funding needed in order to sustain the projected growth rate. The Shark wants her 30% of profits in the form of a cash dividend paid out. The Speciale brothers have promised to re-invest their money into the business for the first three years.

Product Sale Forecast
	Online	Home Shopping Network	Bed Bath and Beyond
YR 1	100,000	400,000	275,000
YR 2	150,000	580,000	250,000
Current Assets, Long-term assets, and account payable are 25%, 50%, and 20% of sales, respectively. Long-term debt and equity are not fixed in relation to sales.

Project Instructions

Excel File

• Download this template (at the bottom)
• Using the template and the information above, create a pro forma for The Comfy.
• Name your file: Comfy_YourName.xls

Word Document

• Create a Word Document explaining your expectations for additional funding to the Shark.
• Name your file: Comfy_YourName.docx
• In your memo, either explain how the cash coming in is going to be sufficient to fund growthOR outlinehow much additional cash will be needed.
• You will most likely need to make up a few small charts to make your plan clear and readable.
• Address what you believe should be done with any excess cash (for example: pay it out to the Speciale Brothers, keep it for a rainy day in cash, etc.) OR if you think the company should issue debt, equity, or a combination of both to fund the shortfall.
• Note: Points will be given not based on your choice but rather your justification of which you choose.
• 

Please Help!!!!

Income Statement Revenues Manufacturing Costs Shipping Costs Customer Acquisition Costs EBT Taxes (21\%) Net Income \begin{tabular}{lrl} & Year 1 & Year 2 \\ $ & 16,330,000 & \\ $ & 6,132,000 & \\ $ & 2,044,000 & \\ $ & 3,066,000 & \\ \hline$ & 5,088,000 \\ $ & 1,068,480 & \\ \hline$ & 4,019,520 \end{tabular} Balance Sheet Income Statement Revenues Manufacturing Costs Shipping Costs Customer Acquisition Costs EBT Taxes (21\%) Net Income \begin{tabular}{lrl} & Year 1 & Year 2 \\ $ & 16,330,000 & \\ $ & 6,132,000 & \\ $ & 2,044,000 & \\ $ & 3,066,000 & \\ \hline$ & 5,088,000 \\ $ & 1,068,480 & \\ \hline$ & 4,019,520 \end{tabular} Balance Sheet