"Financing Your Company"

Instructions:

1)Create a company that performs a specific service or makes a particular product

2)Attain at least $5,000,000 of revenue in Year 5

3)Become EBITDA positive no later than Year 4

4)You are limited to $500,000 in new stock financing per year

5)You are limited to $200,000 of new debt financing per year

COMMENCING IN THE YEAR YOU'RE EBITDA POSITIVE

6)You are creating this company for a lifetime, not just five years; so don't stop building the business (with capital expenditures) in the out-years

7)Complete Deliverables

8)You'll be graded based upon: meeting the financial objectives, how realistic your assumptions are, how you finance the company, and how well you defend your positions

Inputs:

The only cells that require your input are in the Operations and Financingsections. They're highlighted in Blue. The spreadsheet will automatically generate the income statements, balance sheets, and cash flows.

Deliverables:

1)General description of company:

What's the name of the company?

What will it do or make?

2)The completed spreadsheets:

Income statement, balalnce sheet, cash flow,

plus operating and financing pages

3)Explain why assumptions were made for the critical pieces of the business:

Revenue growth, headcount, COGS, equipment purchased vs leased, other?

4)Explain why you selected to finance the company the way you did

5)Provide the following ratios for your company inYear 5:

current ratio

debt/shareholders' equity

return on equity