The ComfyLinks to an external site. 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. Note, like the real world, there is more information than you actually need to do this assignment. You need to figure out what to use.

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: thecomfy.comLinks to an external site.. 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	75,000	300,000	200,000
YR 2	100,000	400,000	250,000
YR 3	150,000	600,000	375,000
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.

INCOME STATEMENT

	Year 1	Year 2	Year 3
Revenues	$16,330,000
Manufacturing Costs	$6,132,000
Shipping Costs	$2,044,000
Customer Acquisition Costs	$3,066,000
EBT	$5,088,000
Taxes (21%)	$1,068,000
Net Income	$4,019,000

BALANCE SHEET

	Year 1	Year 2	Year 3
Assets
Current Assets	4,082,500
Long-Term Assets	8,165,000
Total Assets	12,247,500
Liabilities
Accounts Payable	$3,266,000
Long-Term Debt	$6,067,836
Common Stock	$100,000
Accumulated Retained Earnings	$2,813,664
Total Liabilities and Equity	$12,247,500