Attach a spreadsheet showing calculation and a Word document showing your work and how you arrived at RBS's funding needs. Refer again to the case, Walnut Venture Associates (A). Refer to the financials in the case exhibits. Note that the working capital requirement is missing in the cash flow statement (last exhibit). You will provide the spreadsheet with three scenarios. One is the base case as is in the case exhibit but include working capital investment in estimating the net cash flow. Note that the working capital is the current assets net of cash minus the current liabilities adjusted for deferred taxes (use the balance sheet for the prior year) and use the percentage of sales approach (the working capital to the sales for the prior year) to project the net working capital investment required in future. In the second scenario, consider a lower growth rate in RBS's sales (since entrepreneurs overestimate the sales projections) and then you re-estimate the cash flow. In the third scenario, keep the sales projections as given in the case but increase the projected costs and operating expenses (since entrepreneurs underestimate the costs), and then you re-estimate the net cash flow. The scenarios will result in net cash deficits that indicate RBS's funding requirements and the timing when the funding will be needed. The three scenarios will be on three tabs on one Excel spreadsheet, and the Word document will explain how you arrived at RBS's funding needs and timing. You will justify your assumptions.

Attatched is the financal info.

The RBS Group, Inc. Statements of Income Exhibit A (continued) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued expenses Loan payable - officer Long-term debt - current maturities Bank L.O.C. Deferred revenue Income tax payable Deferred income taxes Total current liabilities Long-term liabilities: Long-term debt, less current maturities Deferred income taxes Total long-term liabilities Total liablities \begin{tabular}{rrr} $89,485 & $95,915 & $101,745 \\ 0 & 5,500 & 5,086 \\ 11,500 & 11,500 & 11,500 \\ 59,185 & 59,185 & 59,185 \\ 355,000 & 0 & 0 \\ 0 & 12,725 & 26,610 \\ 0 & 4,986 & 0 \\ 235,434 & 235,434 & 211,132 \\ \hline 750,604 & 425,245 & 415,258 \\ \hline 138,097 & & \\ 22,228 & 177,555 & 211,739 \\ 160,325 & 22,228 & 24,639 \\ \hline 910,929 & 199,783 & 236,378 \\ \hline & 625,028 & 651,636 \\ \hline \end{tabular} Commitments and contingencies: Stockholders' equity Common stock Retained eamings \begin{tabular}{llr} 401,912 & 401,912 & 1,912 \\ 520,748 & 493,861 & 433,244 \\ 992,660 & 895,773 & 435,156 \\ \hline \end{tabular} Total liabilites and stockholders' equity $1.833.589 $1,520,801$1,086,792 Exhibit B Sales/Revenue Plan V.P. Snles President Rep 2 Rep 3 . Rep 4 Rep 5 Rep 7 Rep 8 Rep 9 Rep 10 Rep 11 Rep 12 Rep 13 Rep 14 Rep 15 Exhibit C Financial Projections REVENUE: New Business: Recurring Busines: Recurting Service Total Cost of Sales: \begin{tabular}{rrrrrrrrr|r|r} \hline Royaty 25\% Prod. & 137,250 & 152,500 & 213,500 & 305,000 & 308,250 & 427,000 & 427,000 & 427,000 & 488,000 & 1,769,000 \\ \hline Commission 6% & 63,000 & 70,000 & 98,000 & 140,000 & 371,000 & 196,000 & 196,000 & 196,000 & 224,000 & 812,000 \\ \hline Total Cost of 5 ales & 200,250 & 222,500 & 311,500 & 445,000 & 1,179,250 & 623,000 & 623,000 & 623,000 & 712,000 & 2,581,000 \end{tabular} Salaries: Debt Service 40,00040,00040,00040,000160,00040,00040,00040,000 Operating Exp: Financial History The company has been profitable every year. Some of the highlights for the year ending March 31 , 1997 are below: - Cash and Accounts Receivable of $745,777 - Accounts Payable, Accrued Expenses and Short Term Debt of $177,086 - Deferred Taxes (Accrual vs. Cash Basis) of $257,662 - Property, Equipment \& Software Net of $766,106 - Long Term Debt of $177,555 - Stockholders' Equity of $895,773 - Sales of $2,033,907 (Please note that software sales occurred for only the second six months of year) - Operating income of $123,442 - Cash flow from Operations of $248,794 The Company has a strong relationship with the Bank of Boston. The Bank also provided a line of credit of $250,000 that had no balance due at year-end. The line of credit was subsequently increased to $600,000. The financial statements are prepared by BDO Seidman for the year ending March 31, 1997 and are available upon request. Financial Projections This section contains the following financial documents: - Exhibit A: Historical Financials - Exhibit B: Revenue Plan that details the expansion of the sales force, number of new customers, new business and recurring business. - Exhibit C: Company Financial Projections including revenue from the Revenue Plan, operating expenses and capital expenditures. The RBS Group, Inc. Statements of Income Exhibit A (continued) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued expenses Loan payable - officer Long-term debt - current maturities Bank L.O.C. Deferred revenue Income tax payable Deferred income taxes Total current liabilities Long-term liabilities: Long-term debt, less current maturities Deferred income taxes Total long-term liabilities Total liablities \begin{tabular}{rrr} $89,485 & $95,915 & $101,745 \\ 0 & 5,500 & 5,086 \\ 11,500 & 11,500 & 11,500 \\ 59,185 & 59,185 & 59,185 \\ 355,000 & 0 & 0 \\ 0 & 12,725 & 26,610 \\ 0 & 4,986 & 0 \\ 235,434 & 235,434 & 211,132 \\ \hline 750,604 & 425,245 & 415,258 \\ \hline 138,097 & & \\ 22,228 & 177,555 & 211,739 \\ 160,325 & 22,228 & 24,639 \\ \hline 910,929 & 199,783 & 236,378 \\ \hline & 625,028 & 651,636 \\ \hline \end{tabular} Commitments and contingencies: Stockholders' equity Common stock Retained eamings \begin{tabular}{llr} 401,912 & 401,912 & 1,912 \\ 520,748 & 493,861 & 433,244 \\ 992,660 & 895,773 & 435,156 \\ \hline \end{tabular} Total liabilites and stockholders' equity $1.833.589 $1,520,801$1,086,792 Exhibit B Sales/Revenue Plan V.P. Snles President Rep 2 Rep 3 . Rep 4 Rep 5 Rep 7 Rep 8 Rep 9 Rep 10 Rep 11 Rep 12 Rep 13 Rep 14 Rep 15 Exhibit C Financial Projections REVENUE: New Business: Recurring Busines: Recurting Service Total Cost of Sales: \begin{tabular}{rrrrrrrrr|r|r} \hline Royaty 25\% Prod. & 137,250 & 152,500 & 213,500 & 305,000 & 308,250 & 427,000 & 427,000 & 427,000 & 488,000 & 1,769,000 \\ \hline Commission 6% & 63,000 & 70,000 & 98,000 & 140,000 & 371,000 & 196,000 & 196,000 & 196,000 & 224,000 & 812,000 \\ \hline Total Cost of 5 ales & 200,250 & 222,500 & 311,500 & 445,000 & 1,179,250 & 623,000 & 623,000 & 623,000 & 712,000 & 2,581,000 \end{tabular} Salaries: Debt Service 40,00040,00040,00040,000160,00040,00040,00040,000 Operating Exp: Financial History The company has been profitable every year. Some of the highlights for the year ending March 31 , 1997 are below: - Cash and Accounts Receivable of $745,777 - Accounts Payable, Accrued Expenses and Short Term Debt of $177,086 - Deferred Taxes (Accrual vs. Cash Basis) of $257,662 - Property, Equipment \& Software Net of $766,106 - Long Term Debt of $177,555 - Stockholders' Equity of $895,773 - Sales of $2,033,907 (Please note that software sales occurred for only the second six months of year) - Operating income of $123,442 - Cash flow from Operations of $248,794 The Company has a strong relationship with the Bank of Boston. The Bank also provided a line of credit of $250,000 that had no balance due at year-end. The line of credit was subsequently increased to $600,000. The financial statements are prepared by BDO Seidman for the year ending March 31, 1997 and are available upon request. Financial Projections This section contains the following financial documents: - Exhibit A: Historical Financials - Exhibit B: Revenue Plan that details the expansion of the sales force, number of new customers, new business and recurring business. - Exhibit C: Company Financial Projections including revenue from the Revenue Plan, operating expenses and capital expenditures