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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Matheus I Auto Electric in
this business plan is confidential; therefore, reader agrees not to disclose it without the express
written permission of Matheus I Auto Electric.

It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means
and that any disclosure or use of same by reader may cause serious harm or damage to Matheus I
Auto Electric.

Upon request, this document is to be immediately returned to Matheus I Auto Electric.  

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 Table of Contents

This is a business plan. It does not imply an offering of securities.

1.0 Executive Summary.....................................................................................................................1

Chart: Highlights...........................................................................................................................1
1.1 Mission...........................................................................................................................................1
1.2 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Company History.......................................................................................................................2
Table: Past Performance............................................................................................................3
Chart: Past Performance............................................................................................................4
3.0 Products and Services.................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................5
4.1 Market Segmentation..............................................................................................................5
Table: Market Analysis................................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................6
5.0 Strategy and Implementation Summary.............................................................................6
5.1 Competitive Edge......................................................................................................................6
5.2 Sales Forecast............................................................................................................................7
Table: Sales Forecast..................................................................................................................7
Chart: Sales Monthly...................................................................................................................8
Chart: Sales by Year....................................................................................................................8
6.0 Management Summary...............................................................................................................8
6.1 Personnel Plan............................................................................................................................9
Table: Personnel............................................................................................................................9
7.0 Financial Plan..................................................................................................................................9
7.1 Break-even Analysis...............................................................................................................10
Table: Break-even Analysis....................................................................................................10
Chart: Break-even Analysis....................................................................................................10
7.2 Projected Profit and Loss.....................................................................................................10
Chart: Profit Monthly.................................................................................................................11
Chart: Profit Yearly.....................................................................................................................11
Chart: Gross Margin Monthly.................................................................................................12
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 Table of Contents

Chart: Gross Margin Yearly.....................................................................................................12

Table: Profit and Loss................................................................................................................12
7.3 Projected Cash Flow...............................................................................................................13
Chart: Cash...................................................................................................................................14
Table: Cash Flow.........................................................................................................................14
7.4 Projected Balance Sheet......................................................................................................16
7.4 Projected Balance Sheet......................................................................................................16
Table: Balance Sheet.................................................................................................................16
7.5 Business Ratios........................................................................................................................17
7.5 Business Ratios........................................................................................................................17
Table: Ratios.................................................................................................................................17
7.6 Long-term Plan........................................................................................................................18
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................6
Table: Cash Flow...................................................................................................................................6
Table: Balance Sheet...........................................................................................................................8
Table: Balance Sheet...........................................................................................................................8

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 Matheus Auto Electric

1.0 Executive Summary

Abbey Electronic Services is a full-service electronic repair business opening in the

revitalized Cherry Grove section of Montclair. The opening of the business is in conjunction with
the completion of the Cherry Grove Shopping Center. Two of the center's tenants, Harry's
Electronics and Olson's Appliance Superstore, have signed third-party repair agreements with
Abbey Electronic Services. Abbey Electronic Services is under contract to provide authorized
warranty service for selected manufacturers.

In addition to business clients, Abbey's will be open to the general public for repairs of
consumer electronics either with or without warranty service. The residential community in
Cherry Grove has experienced explosive growth and will serve as a strong customer base for
Abbey Electronic Services.

Abbey's owner, Richard Abbey, has 25 years of experience in the consumer electronics repair
field. His reputation for excellence is well established and he is a highly-respected electronics
instructor at the community college's Electronics Engineering Technology program.

Abbey Electronic Services will have a staff of two electronics technicians in addition to Richard.

Chart: Highlights

1.1 Mission

Matheus I Auto Electric  aims to offer high-quality electrical repair services with a focus on
convenience and rapid service. Additionally, Matheus I Auto Electric is technologically savvy
with computerized monitoring of all parts inventory, to ensure that critical parts are always in

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 Matheus Auto Electric

stock, while keeping a balanced level of inventory to maximize inventory turnover. Finally,
Matheus I Auto Electric has strong relationships with the regional vendors who are capable of
shipping major parts rapidly (on an overnight timeline in most cases).

Matheus I Auto Electric is about building a strong professional relationship with all our
customers that is grounded in honesty, fairness and integrity of service.

1.2 Keys to Success

Matheus I Auto Electrics' keys to success include:

 Exceptional, expedient, and convenient electrical repair services.

 Building a strong professional relationship with the customer base.
 Rapid order and delivery of electrical part items.

2.0 Company Summary

Abbey Electronic Services is a start-up business managed by Richard Abbey. The economic

growth of Cherry Grove in the last several years has resulted in a revitalized community with
numerous new services and businesses. As a result, the area's need for reliable and
convenient electrical repair services has substantially risen as well. Abbey Electronic Services
will position itself to capitalize on the growing need of the middle- and upper-class market for
quality electrical repair service in the metropolitan area. The company will be privately owned
by Richard Abbey, with most of the additional funding coming from a ten year SBA loan.

2.1 Company Ownership

Abbey Electronic Services is privately owned by Richard Abbey.

2.2 Company History

Bizcomm was sold to its present owner in October of 1998, therefore, comparable financial
results will not be available until 1999. However, past financial information indicates there is
plenty of room for improvement by the company under its new ownership:

 The income tax returns for 1996 show gross sales of £722,635 and an operating loss of
£76,470.
 The returns for 1997 show sales of only £476,194 and operating profits of £38,223.
 Contributing to the bottom line improvement during that period, according to the tax
returns, was an increase in the gross profit margin from 42% to 64%, and a £70,000
reduction in depreciation, payroll taxes, utilities, insurance and other expenses.

Considering the company was sold in 1998, the improvements on the 1997 tax return might
have included a degree of window dressing to achieve a better sales price.

Bizcomm, through several changes in ownership, has lost continuity in respect to the
knowledge and experience gained over the years in direct mail. The company, under its present
management, cannot continue to engage in expensive mass mailings with any reasonable
expectation of quick success. This business plan will put forth other means to expand the
company and give it adequate breathing room to again engage in direct mail in a less-hurried,
more professionally researched way.

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The table varies somewhat from the auditor's figures of December 31, 1999. For one thing, the
current portion of long term debt was removed from current liabilities to avoid problems arising
from assuming that all debt technically classified as "current" would be repaid in the current
year. Total long-term debt of £271,874 can be broken down by this table below:

Loan Percent of Interest Amount Owed

Revolving Credit 11% £24,852
Mortgage at 10.5% £141,147
Time Note 11.25% £20,500
Debt to Former Owner 8% £12,500
EDIC Debt 6% £72,875
Total Amount Owed £271,874
Depreciation and amortisation have been lumped in together. Capital assets include intangibles
of £56,406.

Notes payable to stockholder of £26,912 represent money owed to the owner, Mr. Pullman, and
do not accrue interest. To more accurately reflect the equity nature of these funds, and for ease
of projecting interest charges, this £26,912 has been placed into the capital stock category.

Table: Past Performance

Past Performance

FY 2007 FY 2008 FY 2009

Sales $250,000 $275,000 $150,000
Gross Margin $0 $0 $0
Gross Margin % 0.00% 0.00% 0.00%
Operating Expenses $30,000 $50,000 $40,000

Balance Sheet

FY 2007 FY 2008 FY 2009

Current Assets
Cash $225,000 $260,000 $45,000
Other Current Assets $0 $0 $0
Total Current Assets $225,000 $260,000 $45,000

Fixed Assets
Capital Assets $400,000 $530,000 $600,000
Accumulated Depreciation $20,000 $40,000 $60,000
Total Fixed Assets $380,000 $490,000 $540,000

Total Assets $605,000 $750,000 $585,000

Current Liabilities
Accounts Payable $25,000 $53,000 $10,000
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0

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Total Current Liabilities $25,000 $53,000 $10,000

Fixed Liabilities $10,000 $10,000 $10,000

Total Liabilities $35,000 $63,000 $20,000

Paid-in Capital $30,000 $40,000 $10,000

Retained Earnings $510,000 $597,000 $515,000
Earnings $30,000 $50,000 $40,000
Total Capital $570,000 $687,000 $565,000

Total Capital and Liabilities $605,000 $750,000 $585,000

Other Inputs
Payment Days 30 30 30

Chart: Past Performance

3.0 Products and Services

Abbey Electronic Services are the following:

Service Contracts/Factory Warranty Repairs/Out of Warranty Repairs

 Washer/Dryer: General Electric, Kenmore, Maytag, Whirlpool, Amana and Frigidaire.

 Refrigerators: Frigidaire, General Electric, Kenmore, and Whirlpool.
 Cooking Ranges: General Electric, Whirlpool, Frigidaire, and Maytag. 
 Televisions: Philips Magnavox, RCA, Sony, and Zenith.
 DVD Players/VCRs: Panasonic, RCA, Sony, and Toshiba.

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 Camcorders: Sony, JVC, Panasonic, RCA, and Sharp.

4.0 Market Analysis Summary

Abbey Electronic Services' focus is on meeting the demand of the local resident customer base,
as well as service agreements with Harry's Electronics and Olson's Appliance Superstore. Abbey
Electronic Services' relationships with these two large tenants of the Cherry Grove Shopping
Center will serve as a solid foundation for the growth of the business. The company estimates
that about 60% of revenues will come from the these two business customers. It is estimated
that these contracts will grow yearly at 15%. The remaining 40% will come from local walk-in
traffic from local residents. We estimate that this segment of potential customers will grow by
15% annually. Over time, serving the local customer base will become the core of the
business. 

4.1 Market Segmentation

The table and chart below further estimates the total market potential of services rendered by
Abbey Electronic Services in the metropolitan area.

Many industries have been heavily marketed in the past by Bizcomm. Some industry sectors,
such as insurance companies, and Doctors/Dentists, are targeted with extensive well-
established catalogues, making entry by others difficult. The following industry sectors listed
under the table heading "Attractive Possibilities" are likely to offer the best opportunity for new
territory and market segmentation:

Industry Sector Total Businesses

Animal Hospitals (Veterinarians) 55,455
Beauty Salons (Manicurists) 266,275
Caterers 44,477
Alternative Medicine 133,777
Employment Agencies 40,745
Retailers (Furniture and Jewelry) 44,352
Health Clubs 13,579
Interior Decorators 30,519
Marinas (Boat Yards and Dealers) 22,915

`The "Other" category in the Market Analysis table and chart represents the total businesses
that have sales of £1,000,000 or less. It is assumed that the very large businesses either are
too difficult to reach effectively by direct mail (owner doesn't see the mail; junk mail is
routinely discarded by secretary, etc.), or are so large that they have more sophisticated
customer communication products or have their own established printing channels.

Table: Market Analysis

Market Analysis

2009 2010 2011 2012 2013

Potential Customers Growth CAGR

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 Matheus Auto Electric

Service Contracts 30% 11,000 4,600 5,290 6,084 6,997 -10.69%

Local Walk-In 40% 30,000 46,000 52,900 60,835 69,960 23.58%
Other 27% 9,000 0 0 0 0 -100.00%
Total 11.38% 50,000 50,600 58,190 66,919 76,957 11.38%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

The market of electronic repair services is very competitive. The majority of the successful
electronic repair shops have strong local customer support from years of faithful service. The
niche where Abbey Electronic Services positions itself represents one convenient location for
business clients and local residents. The Cherry Grove area of Montclair has been booming with
middle- and upper-class residential housing. Currently, there is no established electronic repair
service in the area. Abbey Electronic Services success in obtaining service contracts from the
two major electronic product tenants of the Cherry Grove Shopping Center immediately
establishes the business as the local focus for electronic repairs.

5.0 Strategy and Implementation Summary

Abbey Electronic Services will succeed by offering its customers high-quality and
convenient electronic repair service. Each satisfied customer is a potential of five new referrals
so the quality of our workmanship is key to growing the business.

5.1 Competitive Edge

The competitive edge of Abbey Electronic Services is its people. Location and marketing will get
new customers in the door but without quality people, you won't keep them. Richard Abbey
knows this from working 25 years in the electronic repair business. In 1976, Richard started
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 Matheus Auto Electric

with J. Arnold and Sons, the largest electronic repair business in Montclair. He worked there for
10 years before taking over management of Lucas Electronic Repair. The business was
struggling. In two years, Richard turned the business around. Lucas Electronic Repairs business
increased by 150% during that period. The staff grew from four to eight. Richard remained as
for another five years before returning to J. Arnold and Sons. As Manager of J. Arnold and Sons
for the past eight years, the company has grown dramatically, from a staff of 10 to its current
staff of 18.

Richard is also a successful teacher in the Montclair Community College Electronics Engineering
Technology program. His approach in the classroom is the same approach with customers;
straight forward and honest. He has been selected by the students as the best instructor five
years in a row.

This is the competitive a

The advantages Bizcomm has over the competition are numerous:

 Bizcomm does its own printing. Rockford has it all done by outside printers.
 Bizcomm has an Internet site as well as an online store (www.Bizcomm.com).
 Bizcomm has a multitude of unused printing capacity: there is an unlimited amount of
growth potential. Sales to the large retailers can be arranged quickly (within 60 days)
without a great outlay in retooling or developmental costs. Bizcomm must also utilise fully
its slight head-start in the internet. The expertise needed to create an interesting website is
readily available from a number of consultants. There is a good chance that, by getting a
lead on the pack early with a dynamic Internet store and web address, many leads
generated by mass mailings sent out by competitors could materialise as purchase orders
passed on to Bizcomm over the Internet.
 Bizcomm also owns two trademarks: Slida-Card ®, and Circlo-Card®. Both of which
should be leveraged.

dvantage Richard brings to everything he does whether in a business or a classroom.

5.2 Sales Forecast

The following table and charts show the projected sales forecast for Abbey Electronic Services.

Table: Sales Forecast

Sales Forecast

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Sales
Service Contracts $127,266 $142,000 $155,000 $0 $0
Walk-In Customers $160,661 $110,000 $120,000 $0 $0
Total Sales $287,927 $252,000 $275,000 $0 $0

Direct Cost of Sales FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Service Contracts $212,500 $6,200 $6,800 $0 $0
Walk-In Customers $261,000 $5,500 $6,000 $0 $0
Subtotal Direct Cost of Sales $473,500 $11,700 $12,800 $0 $0

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 Matheus Auto Electric

Chart: Sales Monthly

Chart: Sales by Year

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 Matheus Auto Electric

6.0 Management Summary

Richard has hired electronic repair technicians, John Williamson and Jim Logan, to join Abbey
Electronic Services.

John Williamson has 15 years of experience in the electronic repair field. John worked with
Gilmore Electronic Repair for four years before joining Lucas Electronic Repairs. Since that time,
John has moved into a senior position at Lucas. 

Jim Logan joins Abbey Electronic Services after working in the electronic repair field for 10
years in the Richmond Metro area. Jim has worked for both Premiere Electronic Services and
Billings Electronics, which are the dominant repair businesses in Richmond.

Both of these technicians have a history of exceptional workmanship and great customer
relations.

6.1 Personnel Plan

The following is the staff's repair certification.

Richard is a certified to perform repairs on the following products.

 Washer/Dryer: General Electric, Kenmore, and Maytag.

 Refrigerators: Frigidaire and General Electric.
 Cooking Ranges: General Electric and Whirlpool.
 Televisions: Philips Magnavox and RCA.

John Williamson is a certified to perform repairs on the following products.

 Washer/Dryer: General Electric, Whirlpool, Amana, and Frigidaire.

 Refrigerators: Kenmore and Whirlpool.
 Cooking Ranges: Frigidaire and Maytag.
 Televisions: RCA, Sony, and Zenith.

Jim Logan is a certified to perform repairs on the following products.

 Televisions: Philips Magnavox, RCA, Sony, and Zenith.

 DVD Players/VCRs: Panasonic, RCA, Sony, and Toshiba.
 Camcorders: Sony, JVC, Panasonic, RCA, and Sharp.

Table: Personnel

Personnel Plan

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Richard Abbey $48,000 $52,000 $58,000 $0 $0
Other $0 $0 $0 $0 $0
Total People 0 0 0 0 0

Total Payroll $48,000 $52,000 $58,000 $0 $0

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 Matheus Auto Electric

7.0 Financial Plan

The following is the financial plan for Abbey Electronic Services.

7.1 Break-even Analysis

The monthly break-even point is presented in the table and chart below.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even ($13,967)

Assumptions:
Average Percent Variable Cost 164%
Estimated Monthly Fixed Cost $9,002

Chart: Break-even Analysis

7.2 Projected Profit and Loss

The following table and chart show projected profit and loss for three years.

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 Matheus Auto Electric

Chart: Profit Monthly

Chart: Profit Yearly

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 Matheus Auto Electric

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

Table: Profit and Loss

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 Matheus Auto Electric

Pro Forma Profit and Loss

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Sales $287,927 $252,000 $275,000 $0 $0
Direct Cost of Sales $473,500 $11,700 $12,800 $0 $0
Other Production Expenses $0 $0 $0 $0 $0
Total Cost of Sales $473,500 $11,700 $12,800 $0 $0

Gross Margin ($185,573) $240,300 $262,200 $0 $0

Gross Margin % -64.45% 95.36% 95.35% 0.00% 0.00%

Expenses
Payroll $48,000 $52,000 $58,000 $0 $0
Sales and Marketing and Other Expenses $7,400 $5,400 $5,400 $0 $0
Depreciation $2,220 $2,220 $2,220 $0 $0
Leased Equipment $14,400 $14,400 $14,400 $0 $0
Utilities $2,400 $2,400 $2,400 $0 $0
Insurance $0 $0 $0 $0 $0
Rent $12,000 $12,000 $12,000 $0 $0
Payroll Taxes $21,600 $23,400 $26,100 $0 $0
Other $0 $0 $0 $0 $0

Total Operating Expenses $108,020 $111,820 $120,520 $0 $0

Profit Before Interest and Taxes ($293,593) $128,480 $141,680 $0 $0

EBITDA ($291,373) $130,700 $143,900 $0 $0
Interest Expense $1,000 $1,000 $1,000 $1,000 $1,000
Taxes Incurred $0 $38,244 $42,204 $0 $0

Net Profit ($294,593) $89,236 $98,476 ($1,000) ($1,000)

Net Profit/Sales -102.32% 35.41% 35.81% 0.00% 0.00%

7.3 Projected Cash Flow

The table and chart show the projected cash flow for three years.

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 Matheus Auto Electric

Chart: Cash

Table: Cash Flow

Pro Forma Cash Flow

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Cash Received

Cash from Operations

Cash Sales $287,927 $252,000 $275,000 $0 $0
Subtotal Cash from Operations $287,927 $252,000 $275,000 $0 $0

Additional Cash Received

VAT Received (Output Tax) $0 $0 $0 $0 $0
VAT Repayments $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Fixed Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Fixed Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $287,927 $252,000 $275,000 $0 $0

Expenditures FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Expenditures from Operations

Cash Spending $48,000 $52,000 $58,000 $0 $0
Bill Payments $498,043 $143,880 $115,666 $10,477 $1,000

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 Matheus Auto Electric

Subtotal Spent on Operations $546,043 $195,880 $173,666 $10,477 $1,000

Additional Cash Spent

VAT Paid Out (Input Tax) $0 $0 $0 $0 $0
VAT Payments $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Fixed Liabilities Principal Repayment $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Fixed Assets $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $546,043 $195,880 $173,666 $10,477 $1,000

Net Cash Flow ($258,116) $56,120 $101,334 ($10,477) ($1,000)

Cash Balance ($213,116) ($156,996) ($55,662) ($66,139) ($67,139)

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 Matheus Auto Electric

7.4 Projected Balance Sheet

The table shows the projected balance sheet for three years.

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Assets

Current Assets
Cash ($213,116) ($156,996) ($55,662) ($66,139) ($67,139)
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets ($213,116) ($156,996) ($55,662) ($66,139) ($67,139)

Fixed Assets
Fixed Assets $600,000 $600,000 $600,000 $600,000 $600,000
Accumulated Depreciation $62,220 $64,440 $66,660 $66,660 $66,660
Total Fixed Assets $537,780 $535,560 $533,340 $533,340 $533,340
Total Assets $324,664 $378,564 $477,678 $467,201 $466,201

Liabilities and Capital FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Current Liabilities
Accounts Payable $44,257 $8,921 $9,559 $82 $82
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $44,257 $8,921 $9,559 $82 $82

Fixed Liabilities $10,000 $10,000 $10,000 $10,000 $10,000

Total Liabilities $54,257 $18,921 $19,559 $10,082 $10,082

Paid-in Capital $10,000 $10,000 $10,000 $10,000 $10,000

Retained Earnings $555,000 $260,407 $349,643 $448,119 $447,119
Earnings ($294,593) $89,236 $98,476 ($1,000) ($1,000)
Total Capital $270,407 $359,643 $458,119 $457,119 $456,119
Total Liabilities and Capital $324,664 $378,564 $477,678 $467,201 $466,201

Net Worth $270,407 $359,643 $458,119 $457,119 $456,119

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 Matheus Auto Electric

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7622, Radio and Television Repair, are shown for
comparison.

Table: Ratios

Ratio Analysis

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Industry Profile

Sales Growth 91.95% -12.48% 9.13% n.a. n.a. 6.10%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 27.50%
Total Current Assets -65.64% -41.47% -11.65% -14.16% -14.40% 76.90%
Fixed Assets 165.64% 141.47% 111.65% 114.16% 114.40% 23.10%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 13.63% 2.36% 2.00% 0.02% 0.02% 36.90%

Fixed Liabilities 3.08% 2.64% 2.09% 2.14% 2.14% 15.80%
Total Liabilities 16.71% 5.00% 4.09% 2.16% 2.16% 52.70%
Net Worth 83.29% 95.00% 95.91% 97.84% 97.84% 47.30%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin -64.45% 95.36% 95.35% 0.00% 0.00% 0.00%
Selling, General & Administrative Expenses 92.44% 91.33% 92.26% 0.00% 0.00% 83.50%
Advertising Expenses 0.85% 0.00% 0.00% 0.00% 0.00% 0.50%
Profit Before Interest and Taxes -101.97% 50.98% 51.52% 0.00% 0.00% 3.10%

Main Ratios
Current -4.82 -17.60 -5.82 -804.69 -816.85 2.26
Quick -4.82 -17.60 -5.82 -804.69 -816.85 1.47
Total Debt to Total Assets 16.71% 5.00% 4.09% 2.16% 2.16% 52.70%
Pre-tax Return on Net Worth -108.94% 35.45% 30.71% -0.22% -0.22% 7.00%
Pre-tax Return on Assets -90.74% 33.67% 29.45% -0.21% -0.21% 14.70%

Additional Ratios FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Net Profit Margin -102.32% 35.41% 35.81% 0.00% 0.00% n.a
Return on Equity -108.94% 24.81% 21.50% -0.22% -0.22% n.a

Activity Ratios
Accounts Payable Turnover 12.03 12.17 12.17 12.17 12.17 n.a
Payment Days 28 89 29 1,760 30 n.a
Total Asset Turnover 0.89 0.67 0.58 0.00 0.00 n.a

Debt Ratios

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 Matheus Auto Electric

Debt to Net Worth 0.20 0.05 0.04 0.02 0.02 n.a

Current Liab. to Liab. 0.82 0.47 0.49 0.01 0.01 n.a

Liquidity Ratios
Net Working Capital ($257,373) ($165,917) ($65,221) ($66,221) ($67,221) n.a
Interest Coverage -293.59 128.48 141.68 0.00 0.00 n.a

Additional Ratios
Assets to Sales 1.13 1.50 1.74 n.a. n.a. n.a
Current Debt/Total Assets 14% 2% 2% 0% 0% n.a
Acid Test -4.82 -17.60 -5.82 -804.69 -816.85 n.a
Sales/Net Worth 1.06 0.70 0.60 0.00 0.00 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a

7.6 Long-term Plan

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Table: Sales Forecast

Sales Forecast

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Sales VAT Rate

Service Contracts 15% $8,165 $9,064 $9,179 $9,385 $9,936 $11,381 $12,000 $11,000 $12,000 $11,000 $12,000 $12,156
Walk-In Customers 15% $10,399 $11,674 $12,436 $11,028 $13,679 $14,023 $13,307 $14,642 $14,610 $14,771 $15,261 $14,830
Total Sales $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Direct Cost of Sales VAT Rate Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Service Contracts 15.00% $16,000 $16,500 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000
Walk-In Customers 15.00% $18,000 $18,000 $19,500 $19,500 $20,000 $25,000 $26,000 $23,000 $23,000 $23,000 $23,000 $23,000
Subtotal Direct Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000

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Table: Personnel

Personnel Plan

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Richard Abbey 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

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Table: General Assumptions

General Assumptions

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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Table: Profit and Loss

Pro Forma Profit and Loss

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Sales VAT Rate $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986
Direct Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000
Other Production Expenses 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $34,000 $34,500 $37,500 $37,500 $38,000 $43,000 $44,000 $41,000 $41,000 $41,000 $41,000 $41,000

Gross Margin ($15,436) ($13,761) ($15,885) ($17,087) ($14,385) ($17,596) ($18,693) ($15,358) ($14,390) ($15,229) ($13,739) ($14,014)

Gross Margin % -83.15% -66.36% -73.49% -83.71% -60.92% -69.27% -73.86% -59.89% -54.08% -59.09% -50.40% -51.93%

Expenses VAT Rate

Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Sales and Marketing and Other
15.00% $800 $800 $900 $1,000 $500 $400 $500 $500 $300 $600 $600 $500
Expenses
Depreciation $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185
Leased Equipment 15.00% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Utilities 15.00% $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent 0.00% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 10% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Other 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses VAT Rate $9,185 $9,185 $9,285 $9,385 $8,885 $8,785 $8,885 $8,885 $8,685 $8,985 $8,985 $8,885

Profit Before Interest and Taxes ($24,621) ($22,946) ($25,170) ($26,472) ($23,270) ($26,381) ($27,578) ($24,243) ($23,075) ($24,214) ($22,724) ($22,899)

EBITDA ($24,436) ($22,761) ($24,985) ($26,287) ($23,085) ($26,196) ($27,393) ($24,058) ($22,890) ($24,029) ($22,539) ($22,714)

Interest Expense $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83

Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($24,704) ($23,030) ($25,254) ($26,555) ($23,354) ($26,465) ($27,661) ($24,326) ($23,158) ($24,297) ($22,807) ($22,982)

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Net Profit/Sales -133.07% -111.05% -116.84% -130.09% -98.89% -104.18% -109.30% -94.87% -87.03% -94.28% -83.66% -85.16%

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Table: Cash Flow

Pro Forma Cash Flow

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Cash Received

Cash from Operations

Cash Sales $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Subtotal Cash from Operations $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Additional Cash Received VAT Rate

VAT Received (Output Tax) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

VAT Repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Fixed Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Fixed Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $18,564 $20,739 $21,615 $20,413 $23,615 $25,404 $25,307 $25,642 $26,610 $25,771 $27,261 $26,986

Expenditures Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Expenditures from Operations

Cash Spending $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Bill Payments $11,303 $39,100 $39,687 $42,687 $42,783 $42,947 $47,720 $48,683 $45,777 $45,593 $45,883 $45,880

Subtotal Spent on Operations $15,303 $43,100 $43,687 $46,687 $46,783 $46,947 $51,720 $52,683 $49,777 $49,593 $49,883 $49,880

Additional Cash Spent VAT Rate

VAT Paid Out (Input Tax) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

VAT Payments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Fixed Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Fixed Assets 15.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $15,303 $43,100 $43,687 $46,687 $46,783 $46,947 $51,720 $52,683 $49,777 $49,593 $49,883 $49,880

Net Cash Flow $3,261 ($22,361) ($22,072) ($26,274) ($23,169) ($21,543) ($26,413) ($27,041) ($23,167) ($23,822) ($22,622) ($22,894)

Cash Balance $48,261 $25,900 $3,828 ($22,446) ($45,614) ($67,157) ($93,570) ($120,611) ($143,778) ($167,600) ($190,222) ($213,116)

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Table: Balance Sheet

Pro Forma Balance Sheet

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Assets Starting Balances

Current Assets
Cash $45,000 $48,261 $25,900 $3,828 ($22,446) ($45,614) ($67,157) ($93,570) ($120,611) ($143,778) ($167,600) ($190,222) ($213,116)
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $45,000 $48,261 $25,900 $3,828 ($22,446) ($45,614) ($67,157) ($93,570) ($120,611) ($143,778) ($167,600) ($190,222) ($213,116)

Fixed Assets
Fixed Assets $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000
Accumulated Depreciation $60,000 $60,185 $60,370 $60,555 $60,740 $60,925 $61,110 $61,295 $61,480 $61,665 $61,850 $62,035 $62,220
Total Fixed Assets $540,000 $539,815 $539,630 $539,445 $539,260 $539,075 $538,890 $538,705 $538,520 $538,335 $538,150 $537,965 $537,780
Total Assets $585,000 $588,076 $565,530 $543,273 $516,814 $493,461 $471,733 $445,135 $417,909 $394,557 $370,550 $347,743 $324,664

Liabilities and Capital Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Current Liabilities
Accounts Payable $10,000 $37,781 $38,264 $41,261 $41,357 $41,357 $46,094 $47,157 $44,257 $44,064 $44,354 $44,354 $44,257
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $10,000 $37,781 $38,264 $41,261 $41,357 $41,357 $46,094 $47,157 $44,257 $44,064 $44,354 $44,354 $44,257

Fixed Liabilities $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Total Liabilities $20,000 $47,781 $48,264 $51,261 $51,357 $51,357 $56,094 $57,157 $54,257 $54,064 $54,354 $54,354 $54,257

Paid-in Capital $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Retained Earnings $515,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000 $555,000
Earnings $40,000 ($24,704) ($47,734) ($72,988) ($99,543) ($122,897) ($149,361) ($177,022) ($201,349) ($224,507) ($248,804) ($271,611) ($294,593)
Total Capital $565,000 $540,296 $517,266 $492,012 $465,457 $442,103 $415,639 $387,978 $363,651 $340,493 $316,196 $293,389 $270,407
Total Liabilities and Capital $585,000 $588,076 $565,530 $543,273 $516,814 $493,461 $471,733 $445,135 $417,909 $394,557 $370,550 $347,743 $324,664

Net Worth $565,000 $540,296 $517,266 $492,012 $465,457 $442,103 $415,639 $387,978 $363,651 $340,493 $316,196 $293,389 $270,407

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