SBM 167 SAMPLE CASE FOR PROJECT

Firm Name:  ABC Oil Change

Starting Assets:  Cash $1,000

Inventory $3,000

Buildings $150,000

Equipment $12,000

Other Fixed Assets $9,000

Equity $25,000

Annual Sales Potential $226,500

Cost of Goods Sold 25%

Marketing as percent of sales 7%

Salary expense $18,576

Rent $4,530 per year

Travel & Entertainment $1,200 per year

Depreciation of fixed assets = 10 years

Repairs & Maintenance costs $360 per year

Utilities & Phone costs $1,800 per year

Office Supplies $1,200 per year

Payroll taxes at standard rates

Sales increase 10% per year

General expenses increase 5% per year

Marketing expense reduces to 5% of revenues in year 2

Income taxes at 30%

No projected receivables or payables