Hello - Thank you for the help with the P&L. In order to help me compile a complete paper , could you kindly help with these financial statements for this same scenario 1. A break even analysis, 2. Balance Sheet at the end of the first year 3. Monthly cashflow for the first year of operation and 4. Annual cash flow thereafter.

Isaac recently took early retirement leaving the company with a lump sum (after tax) payment of CAD 800,000. He is contemplating a new career as a retailer of a range of German fine handmade chocolate. Before he proceeds he would like to develop a financial plan to evaluate the venture and if it's a viable to do.

AlpenChoc, an established artisan manufacturer of fine chocolates with innovative flavours, is prepared to give him exclusive rights to sell their products in Canada for a seven-year period in exchange for an upfront payment for those rights;

- The chocolate sells in Germany for an average of 120 Euro () per kg, and AlpenChoc is prepared to sell them to Isaac at a 40% discount to this price; - AlpenChoc would ship each order to Isaac as soon as they receive payment;

- Isaac has found out that shipping from AlpenChoc to Toronto by air freight, would cost on average 14 per kg and that the time from him placing an order to receiving the goods in Toronto would be two weeks (including the preparation and packing time in Lindau);

- Isaac plans to order from AlpenChoc monthly and intends to maintain a minimum stock of one month's worth of sales to ensure that he will be able to supply a suitable range of chocolates to customers;

- He will buy a special refrigerator at a cost of CAD 15,500 to keep the chocolates in good condition, and has found a small industrial room he can rent nearby at a cost of CAD 3,500 per month (payable monthly in advance, plus an initial security deposit of three months' rent, refundable at the end of his tenancy if there is no damage);

- Isaac will sell the chocolates throughout Canada by internet only, and is planning to spend CAD 8,500 with a website designer to develop the e-commerce site;

- He has already spent CAD 5,000 on a market study that told him that once established, demand would be about 750 kg a month, although in the first-year sales would start at only 50 kg in the first month before building up slowly through the year to the full level at the end of the year;

- The above study assumed an average selling price in Canada of CAD 160 per kg (ignore any impact of sales taxes in your calculations); - Packaging and shipping in Canada would average CAD 6 per kg, and Isaac is not intending to charge that to the customer;

- All sales would be by credit card, with the credit card company taking a 1.2% handling fee per sale and remitting the monthly total to Isaac two weeks after the end of each calendar month;

- He believes that two part-time students could run the entire operation at a total cost to him (including employer's social charges) of CAD 2,500 per month;

- Isaac understands that, if necessary, he could borrow up to an additional CAD 80,000 at 7% p.a.;

- The effective overall marginal tax rate on income from a company set up to undertake this activity would be 25%, payable one year in arrears; Isaac perceives he can invest any available cash at an after tax 3% per annum.

Isaac also has a friend, Jade, who owns a small chain of travel agents in the Toronto area. Jade is interested in the venture and she has agreed that if Isaac packages the chocolates in boxes decorated with views of Southern Germany, she would give him a two-year contract to buy one hundred boxes (each containing 250gm of chocolates) from him per month, at a price of CAD 45 each. This would be in addition to the internet sales outlined above and would start immediately. Therefore, Isaac would need to buy in boxes and decorative paper at a cost of CAD 8 per box, and he has found a used table top wrapping machine that could be bought for CAD 2,200. He would also hire an assistant specifically to pack and deliver the boxes at an additional cost (including employer's social charges) of CAD 500 per month.

Many thanks in advance!

Charity