苏州市委书记蒋宏坤,陈良宇事件,武汉城市圈
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Note 6: The Gross profit for year one has worked out at $170,000 by taking the total cost of goods sold from the sales figure. In the year two it works out at $206,000 and year three it is $284,000.
Note 7: As outlined in the expenses, Wages and salary in year 1 were $90,000 and in year 2 and 3 is increased by $3,000 and $4,000 respectively. Utility expenses increased by $500 over the three years. The Rent has increased from $12,000 to $14,000 from year 1 to year 3. Maintenance & Repair has a steady increase from year 1 $3,000 to year 3 $3,200. Legal costs have cleared as there will no need for legal administration in Year 2. The Advertising costs from year 1 $4,000 to year 3 $3,000.
Note 8: Depreciation for Motor vehicle & equipment is at 10% on reducing the balance. The Motor Vehicles and Equipment and Furniture & Fixtures will all be depreciated. The total fixed assets figure of $306,000, so the depreciation for year 1 is $30,600, the total fixed assets figure of $275,400, the depreciation for year 2 is $27,540. The figure of $247,860, the depreciation for year 3 is $24,786.
Note 9: The total overheads are the sum of all expenses(Note 7) plus depreciation of non-current assets is $155,900 in year 1. In the year 2, the total overheads are made up all expenses (Note 7), and depreciation is $156,240. The year 3 of the total overheads are made up all expenses (Note 7) plus depreciation is $158,486.
Note 10: The net profit for year one has been worked out by taking the total overheads figure of $155,900 from gross profit of $170,000 to get $14,100. The net profit for year two has been worked out by taking the total overheads figure of $156,240 from gross profit of $206,000 to get $49,760. The net profit for year three has been worked out by taking the total overheads figure of $158,486 from gross profit of $284,000 to get $125,514.
A seen in the profit and loss account, the first year of operation has unusually high operating costs as compared to the other years. Generally, a new system costs a lot of money and investment. Quality of the whole process begins with the way the whole company was designed. FreeStyle Company invested heavily in quality in the first year. Since it was a new company, it invested in the advertisement to be relevant in the industry which was previously unexplored in the way Free Style was exploring. As seen in the account above, the loan interest, legal and advertising costs were relatively high. The estimated cost of the supplies was very high in the first year due to a high number of resources that are miscellaneous and monetized costs. The installation costs were very high during the first year considering that issues emerged that required specific hardware needs. The company was quick to respond in a way that it had state of the art facilities in place to cater for future needs. Legal fees accounted for a more significant percentage of the operations costs during the first year of operation. Other institutions were involved in the project, and each agreement between the two incurred considerable costs.
On the legal aspects, the organization is a company. It is a private limited company. As a result, it is a unique entity that is separate and apart from those who own it. It enjoys the rights of people like the right to sue and be sued. It also pays taxes just like the way healthy people do. In case the company wants to merge or join into contracts, there are well laid out procedures of doing the same in a court of law. Owners of the company are shareholders who have invested their shares in the company. The shareholders have their rights. One of the rights that the shareholders enjoy at FreeStyle Company is that they elect a board of directors. The board of directors is responsible for overseeing the daily activities of a firm.
Regarding the liability of the owners, it is limited by the fact that they are not liable to the corporation's debts in case of dilution. The company raises funds by selling stocks since it is a limited liability company. Records are kept strictly by the secretary. One of the most important documents of the company is the articles of association which are filed in the state.
Monthly Cash Budgets
Cash budgets reflect the inflow compared to the outflow of expenses resulting from operating, investment and financing activities during a specific period.
Note 1: The sales figure for year 1 is $260,000 as stated in the financial feasibility part 1 for Free Style. The sales figures from January to December vary because many people tend to go on holidays in December and mid-year.
Note 2: Free Style Company begins its trading with $21,000 on the first date.
Note 3: The total income figure for year 1 is $272,000. This was got by adding the monthly sales figures to $21,000.
Note 4 The expenditure for the FreeStyle company as stated in the feasibility study. The figures vary evenly across all months.
Note 5: Depreciation of the non-current assets for year 1 is $30,600. It is evenly distributed in across the twelve months, so for every month, it spends $2,550.
Note 6: Three owners have decided to pay themselves a profit of $1,000 in year 1, and it is to be distributed in the December bonus.
Note 7: Total expenses are gotten by adding the figures explained in Note 4 and Note 6.
Note 8: The cash balancing figure is calculated by adding a previous cash balance with the total income less total expense. At the end of Year 1, we end up with an overall cash surplus of $115,100
Note 9: The cash balancing figure is calculated by adding a previous cash balance with the company's total income less total expenses.
Note 10: The sales figure for year two is $300,000 as stated in the financial feasibility part 1for the Freestyle company. The sales figures per month are varied slightly due to the summer holiday is busier than the other time.
Note 11: $115,100 is cash balance brought forward into Year 2 from Year 1.
Note 12: The total income figure for Year 2 is $415,100 which was got by adding the monthly sales figures with the $115,100 put at the very first of this year.
Note 13: The expenditure for the FreeStyle company as stated in the feasibility study. The figures vary evenly across all months.
Note 14: The Depreciation of the non-current assets for Year 2 works out at $27,540 this year. Which evenly spread across the 12 months at $2,295
Note 15: Three owners have decided to pay themselves a profit of $2,000 in year 2, and it is to be distributed in the December bonus.
Note 16: the Total expense is got by adding the Notes 13-15.
Note 17: The cash surplus/deficit figures are worked out by taking total expense from total income, at the end of Year 2, and we end up with an overall cash surplus of $255,860.
Note 18: The cash balancing figure is calculated by adding a previous cash balance with the company's total income less total expenses.
Note 19: The sales figure for year two is $380,700 as stated in the financial feasibility part 1for the Freestyle company. The sales figures per month are varied slightly due to the increased of new and returned customers.
Note 20: $256,860 is cash balance brought forward into Year 3 from Year 2.
Note 21: The total income figure for Year 3 is $637,560 which was got by adding the monthly sales figures with the $256,860 put at the very first of this year.
Note 22: The expenditure for the FreeStyle company as stated in the feasibility study. The figures vary evenly across all months.
Note 23: The Depreciation of the non-current assets for Year 2 works out at $24,786 this year. Which evenly spread across the 12 months at $2,065.5
Note 25: the Total expense is got by adding the Notes 22-24.
Note 26: The cash surplus/deficit figures are worked out by taking total expense from total income, at the end of Year 3, and we end up with an overall cash surplus of $475,574.
Note 27: The cash balancing figure is calculated by adding a previous cash balance with the company's total income less total expenses.
Justification of the Revenue
There has been a consistent increase in the revenue for the company over the three year period. During the initial stages of development, the company gained significantly through its investment plans by using the right mix of revenues and blending them with operational efficiencies which ultimately guaranteed success. As stated earlier the company invested heavily in marketing. The company viewed marketing as the key to revenue growth. This explains why revenue was considerably high during the first year. Intelligent and intensive market campaigns were used to increase revenues. As time progressed, the company started a process of evaluation of the capacity of customer service as a variable for revenue growth. Since the company is more of a service company, most of the strategies that were in place ensured that customer service was top-notch. This element was viewed in its entirety as a cost center. According to the management, it was merely a cost of doing the right mix of business. |
