Holoease

Author Jacob Sheridan

Date 4/13/2020
To perform a financial analysis for the startup tech
Purpose company, Holoease
Holoease
Start-Up Requirements
Required Expenses
Licensing Fees 90,000
Plant Construction 345,000
Plant Equipment 200,000
Other Required Expenses 215,000
Total Required Expenses $ 850,000
Required Assets
Cash 230,000
Property 120,000
Miscellaneous Assets 100,000
Long-Term Assets 300,000
Total Required Assets $ 750,000
TOTAL REQUIRED EXPENSES AND ASSETS $ 1,600,000

Start-Up Assets
Non-Cash Assets 520,000
Cash Assets 230,000
Additional Available Cash 150,000
Cash Balance on Starting Date 380,000
TOTAL START-UP ASSETS $ 900,000

Liabilities and Capital

Start-Up Liabilities
Long-Term Business Loan 550,000
Outstanding Debts -
Total Liabilities $ 550,000
Start-Up Capital
Owners 425,000
Investors 350,000
Tech Innovations Startup Grant 425,000
Total Available Capital $ 1,200,000

Project Summary
START-UP INVESTMENT 1,200,000
START-UP EXPENSES (850,000)
INITIAL EQUITY 350,000
TOTAL LIABILITIES AND EQUITY $ 900,000

TOTAL FUNDING $ 1,750,000

530531869.xlsx Startup 07/04/2021

Holoease
Pro Forma Income Statement
Percent Cost of Sales & Marketing 25%
Percent Cost of Research and Development 15%
Assumed Tax Rate 32%

Income Year 1 Year 2 Year 3 Year 4 Year 5

Sales $ 1,000,000 $ 1,257,433 $ 1,581,139 $ 1,988,177 $ 2,500,000
Cost of Sales & Marketing 250,000 314,358 395,285 497,044 625,000
Cost of Research and Development 150,000 188,615 237,171 298,227 375,000
GROSS PROFIT 600,000 754,460 948,683 1,192,906 1,500,000

Expenses Year 1 Year 2 Year 3 Year 4 Year 5

Payroll $ 430,000 $ 473,000 $ 520,300 $ 572,330 $ 629,563
Utilities 60,000 63,000 66,150 69,458 72,930
Licensing 25,000 26,250 27,563 28,941 30,388
Occupancy Costs 50,000 52,500 55,125 57,881 60,775
Insurance 25,000 26,250 27,563 28,941 30,388
Miscellaneous Expenses 15,000 15,750 16,538 17,364 18,233
TOTAL GENERAL EXPENSES 605,000 656,750 713,238 774,914 842,277

Earnings Year 1 Year 2 Year 3 Year 4 Year 5

Initial Earnings $ (5,000) $ 97,710 $ 235,446 $ 417,992 $ 657,723
Depreciation 38,700 33,708 29,359 25,572 22,273
Operating Profit (43,700) 64,002 206,086 392,420 635,450

Interest Expense 30,838 24,867 18,530 11,804 4,665

Pretax Profit (74,538) 39,135 187,557 380,616 630,785

Taxes Liability - 12,523 60,018 121,797 201,851

After-Tax Profit $ (74,538) $ 26,612 $ 127,539 $ 258,819 $ 428,934

Dividends to Shareholders - - 12,000 25,000 43,000

Retained Earnings $ (74,538) $ 26,612 $ 115,539 $ 233,819 $ 385,934

530531869.xlsx Income Statement 07/04/2021

Holoease
Pro Forma Balance Sheet
Assets Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets
Cash 166,859 43,906 (807) 62,247 266,978
Accounts Receivable - - - - -
Inventory - - - - -
Total Current Assets 166,859 43,906 (807) 62,247 266,978

Property and Equipment

Property 120,000 120,000 120,000 120,000 120,000
Miscellaneous Assets 100,000 100,000 100,000 100,000 100,000
Long-Term Assets 300,000 300,000 300,000 300,000 300,000
Less Accumulated Depreciation (38,700) (72,408) (101,767) (127,339) (149,612)
Net Property & Equipment 481,300 447,592 418,233 392,661 370,388

TOTAL ASSETS 648,159 491,498 417,425 454,907 637,366

Liabilities and Equity Year 1 Year 2 Year 3 Year 4 Year 5

Current Liabilities
Total Current Liabilities - - - - -

Long-Term Liabilities
Total Long-Term Liabilities 452,697 349,424 239,813 123,476 -

Equity
Initial Investment 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Less Start-Up Expenses (850,000) (850,000) (850,000) (850,000) (850,000)
Less Investor Repayment (80,000) (160,000) (240,000) (320,000) (400,000)
Accumulated Retained Earnings (74,538) (47,926) 67,613 301,432 687,366
Total Equity 195,462 142,074 177,613 331,432 637,366

TOTAL LIABILITIES AND EQUITY 648,159 491,498 417,425 454,907 637,366

NET WORTH 195,462 142,074 177,613 331,432 637,366

530531869.xlsx Balance Sheet 07/04/2021

Holoease
Pro Forma Cash Flow
Cash Balance on Starting Date $ 380,000

Cash Inflows Year 1 Year 2 Year 3 Year 4 Year 5

Operating Profit (43,700) 64,002 206,086 392,420 635,450
Depreciation Add-Back 38,700 33,708 29,359 25,572 22,273
Additional Cash Received - - - - -
New Borrowing - - - - -
Sales of Other Current Assets - - - - -
TOTAL CASH INFLOW $ (5,000) $ 97,710 $ 235,446 $ 417,992 $ 657,723

Cash Outflows Year 1 Year 2 Year 3 Year 4 Year 5

Loan Payment to Investors 80,000 80,000 80,000 80,000 80,000
Dividends - - 12,000 25,000 43,000
Estimated Tax - 12,523 60,018 121,797 201,851
Interest Payments 30,838 24,867 18,530 11,804 4,665
Debt Payment 97,303 103,274 109,611 116,337 123,476
TOTAL CASH OUTFLOW $ 208,141 $ 220,664 $ 280,159 $ 354,938 $ 452,992

NET CASH FLOW $ (213,141) $ (122,954) $ (44,713) $ 63,054 $ 204,731

CASH BALANCE $ 166,859 $ 43,906 $ (807) $ 62,247 $ 266,978

530531869.xlsx Cash Flow 07/04/2021

Holoease
Loan Analysis
Annual Interest Rate 6.00%

Financial Value Business Loan Future Value Years Payments per Payments Annual Rate Rate per Period Periodic Payments
(PV) (FV) Year (NPER) (RATE) (PMT)

Quarterly Payment (PMT) $ 650,000 $ - 5 4 20 6.00% 1.50% $ (37,860)

Future Value (FV) $ 650,000 $ (181,746) 5 4 20 6.00% 1.50% $ (30,000)
Payments (NPER) $ 650,000 $ - 6.5997182 4 26.40 6.00% 1.50% $ (30,000)
Business Loan (PV) $ 549,396 $ - 5 4 20 6.00% 1.50% $ (32,000)

530531869.xlsx Loan Analysis 07/04/2021

Holoease
Loan Schedule
Loan (PV) Annual Rate Payments per Rate per Period Years Payments Payment
Year (RATE) (NPER) (PMT)
$550,000 6.00% 4 1.50% 5 20 ($32,035)

Amortization Schedule
Year Period Remaining Interest Principal Total Payment
Principal Payment Payment
1 1 $ 550,000 $ (8,250) $ (23,785) $ (32,035)
1 2 526,215 $ (7,893) $ (24,142) $ (32,035)
1 3 502,073 (7,531) (24,504) (32,035)
1 4 477,569 (7,164) (24,872) (32,035)
2 5 452,697 (6,790) (25,245) (32,035)
2 6 427,453 (6,412) (25,623) (32,035)
2 7 401,829 (6,027) (26,008) (32,035)
2 8 375,821 (5,637) (26,398) (32,035)
3 9 349,424 (5,241) (26,794) (32,035)
3 10 322,630 (4,839) (27,196) (32,035)
3 11 295,434 (4,432) (27,604) (32,035)
3 12 267,830 (4,017) (28,018) (32,035)
4 13 239,813 (3,597) (28,438) (32,035)
4 14 211,375 (3,171) (28,865) (32,035)
4 15 182,510 (2,738) (29,298) (32,035)
4 16 153,213 (2,298) (29,737) (32,035)
5 17 123,476 (1,852) (30,183) (32,035)
5 18 93,293 (1,399) (30,636) (32,035)
5 19 62,657 (940) (31,095) (32,035)
5 20 31,562 (473) (31,562) (32,035)
Final Balance $0.00

Cumulative Interest and Principal Payments per Year

Year 1 Year 2 Year 3 Year 4 Year 5
1 5 9 13 17
Quarters

4 8 12 16 20
Total
Interest ($30,838) ($24,867) ($18,530) ($11,804) ($4,665) ($90,703)
Principal ($97,303) ($103,274) ($109,611) ($116,337) ($123,476) ($550,000)
Principal Remaining $452,697 $349,424 $239,813 $123,476 $0

530531869.xlsx Loan Schedule 07/04/2021

Holoease
Depreciation
Long-Term Assets (Cost) $ 300,000
Salvage Value (Salvage) $ 75,000
Life of Asset (Life) 10

Year
Straight-Line (SLN) 1 2 3 4 5
Yearly Depreciation 22,500 22,500 22,500 22,500 22,500
Cumulative Depreciation 22,500 45,000 67,500 90,000 112,500
Depreciated Asset Value $ 277,500 $ 255,000 $ 232,500 $ 210,000 $ 187,500

Year
Declining Balance (DB) 1 2 3 4 5
Yearly Depreciation 38,700 33,708 29,359 25,572 22,273
Cumulative Depreciation 38,700 72,408 101,767 127,339 149,612
Depreciated Asset Value $ 261,300 $ 227,592 $ 198,233 $ 172,661 $ 150,388

530531869.xlsx Depreciation 07/04/2021

Holoease
Investment Analysis
Proposed Repayment Schedule to Investors

Investment (PV) $ (350,000)

Yearly Payments (PMT) 80,000
Payments (NPER) 5
Interest Rate (RATE) 4.62%

Year 1 Year 2 Year 3 Year 4 Year 5

Payments 80,000 80,000 80,000 80,000 80,000
Dividends - - 12,000 25,000 43,000
Total 80,000 80,000 92,000 105,000 123,000

Return on the Investment

Payments Net Cash Flow
Startup $ (350,000) $ (350,000)
Year 1 80,000 $ (270,000)
Year 2 80,000 $ (190,000)
Year 3 92,000 $ (98,000)
Year 4 105,000 $ 7,000
Year 5 123,000 $ 130,000

Desired Rate of Return 10.0%

Present Value (NPV) $356,054
Net Present Value 6,054
Internal Rate of Return (IRR) 10.62%

530531869.xlsx Investment Analysis 07/04/2021

Holoease
Terms and Definitions
Term Definition
Cash flow The direction in which money flows either to or from the user

Negative cash flow Money that is flowing from the user

Positive cash flow Money that is flowing towards the user

Present value The current value of a loan or investment

Future value The future value of a loan or investment

Cost of sales Expenses which are directly related to production

Tangible assets Noncash assets such as equipment, land, buildings, and
vehicles
Gross profit The difference between the company's sales and the cost of
goods sold
Extrapolation A process by extending a series from a single value or a few
values to project future values
Interpolation A process to fill in a series when given then starting and ending
values of the series
Linear trend A trend by which values change by a constant amount
Growth trend A trend by which values change by a constant percentage

Depreciation The process of allocating the original cost of an asset over the
lifetime of the asset
Straight-line depreciation Depreciation in which the asset drops in value by a constant
amount
Declining balance depreciation Depreciation in which the asset drops in value by a constant
percentage
Payback period The length of time before an investment recovers its initial
cost
Rate of return An interest rate that compares of value of current dollars to
future dollars from a series of cash flows
Net present value The difference between the present value of an investment
and the initial expenditure on that investment

Internal rate of return The return rate for a series of future cash flow that will will
result in a net present value of 0
Notes

Excel returns negative cash flow values for

loan payments
Excel returns positive cash flow values for
investments

Use a future value of 0 for loans that will be

completely repaid

Calculate using the SLN function

Calculate using the DB function

Calculate by adding the current expenditure

to the value returned by the NPV function

Calculate using the IRR function