Logitech

1 Introduction:

Logitech is a Swiss company which is engaged in producing quality and innovative computer peripherals that an enables the target customer to experience the latest updating of technology in the digital world. The company produces computer related products like keyboard, mouse, web cameras plus video calling, Remotes, Gaming, Audio and laptop accessories.“Logitech products are distributed in more than 100 countries worldwide through retail channels or via our strategic partnerships with top-tier PC manufacturers” (Sales and distribution, 2009).

The company's product is entirely different in its innovating skill. The company is having a greater experience in producing a wide variety of personal products which includes both cordless and corded products. The products are mainly designed for the navigation purpose, internet communication, home entertainment and digital music. The products of Logitech are distributed to more than 100 countries across the world. They sell their “products to a network of distributors and resellers (“retail”) and to original equipment manufacturers (“OEMs”). They are having tie up with top PC manufacturers and the products are made available in different countries through these strategic partners or through retail channels. It is head quartered in Switzerland and has its sales office in most of the countries such as Asia pacific, North America and in Europe. Satellite navigation products are used to trace the complete details of the product like from where the product is being used and also to control the speed of vehicles. Development of new satellite navigation products is essential for super fast use of new machines.

There has been an increase in sales from the last quarter with a margin of 2 lacks. The percentage of change in net sales is less when compared to the previous quarter but the total net sales is more than the previous quarter sales. Investments are lesser than the previous quarter. The investments in fixed assets are less and the investment in the intangible assets & goodwill are considered to be more. In the quarter ended Dec.31 2009, the gross profit has increased. But in the quarter ended Sept. 30 2009 the margin of profit is less when compared to the previous year. There was an increasing in the marketing and administrative cost. It was also found that there was appositive impact on the operating income and negative impact on the interest income.

2 Financial statement analysis

“Financial statement analysisis defined as the process of identifying financial strengths and weaknessesof the firm by properly establishingrelationship betweenthe items of the balance sheet and theprofit and lossaccount” (Financial management statement, 2009).

It is said that whatever you are going to manage and accomplish must be measured well. Without proper measurement there will be no references and this will lead the organization to work in the dark which results in poor performance. For analysing the financial statements the ratio analysis is used. In this method there are a lot of ratios associated. “According to Kennedy and Macmillan, "The relationship of one item to another expressed in simple mathematical form is known as ratio" (Ratio analysis, n.d.). “Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry” (Financial ratio analysis, n.d.).

The ratio analysis is an important method that is used by the organization to summarise the financial result of the organization. This method evaluates the financial position of the company for a particular time period and it establishes the performance standard for the organization. It also helps in understanding the profitability, solvency, financial stability, comparative performance of the analysis and financial position of the concern and forecasting the future financial position of the organization.

Even though this method is found to be commonly used in most of the organizations, there are certain limitations associated with it such as;

§ Chances to derive false results as the financial calculations are done based on the data taken from the financial statements; therefore any wrong data presented in the financial statements will lead faulty ratios.

§ It is a costly technique and it cannot be used by all organizations.

§ As there is no standard for comparing the financial data the significance for this method has been reduced. “In general, there are 4 kind of financial ratio that a financial analyst will use most frequently, these are:

* Performance ratios

* Working capital ratios

* Liquidity ratios

* Solvency ratios” (Analytical tools in financial modelling - financial ratios, 2010).

2.1 Logitech ratio analysis using PERL framework:

Measuring Performance

3/31/2009

3/31/2008

3/31/2007

3/31/2006

Gross Profit Margin

31.29%

35.82%

34.33%

31.95%

Operating Profit Margin

4.96%

12.09%

11.21%

11.07%

Net Profit Margin

4.85%

9.75%

11.16%

10.08%

Return on Capital Employed (ROCE) *

11.20%

24.53%

29.72%

30.03%

Return on Equity Capital Employed (ROE)

10.73%

24.06%

27.30%

26.43%

Return on Total Assets (ROTA)

7.71%

18.77%

17.45%

18.82%

Measuring Efficiency

Predicted Cost of Sales (Yr (n))

$1,417,622.48

$1,556,622.29

$1,406,231.70

$1,186,444.90

Direct Cost Efficiency Ratio

107.05%

97.74%

96.50%

103.05%

Predicted Net Operating Expenses (Yr (n))

$524,080.64

$548,237.90

$431,551.26

$402,227.58

Operating Cost Efficiency ratio

110.97%

102.59%

110.75%

93.28%

Fixed Asset Turnover (FAT)

522.36%

657.35%

645.72%

617.73%

Inventory Turnover

9.46

9.65

9.48

9.13

Debtor Age

35.35

57.53

54.82

58.88

Creditor Age

38

69

59

54

Stock Holding Period

56.15

58.96

58.63

58.77

Operating Cycle Analysis:

65.43

65.43

65.43

65.43

Measuring Risk

Gearing Ratio

13.48%

11.61%

2.12%

1.99%

Measuring Liquidity

Current Asset ratio

3.45

2.56

2.17

2.14

Acid Test ratio

2.65

2.02

1.70

1.59

The ratio analysis was done based on the annual report for Logitech Ltd in last four years. The calculations of the data that are tabulated are explained below;

Measuring performance

· Gross margin:

“Grossmargins reveal how much acompany earnstaking intoconsiderationthecoststhat itincurs for producing itsproductsand/orservices” (Gross margin: Definition, n.d.). From the financial statement it was found that the gross margin of the company is 31.29% (2009) and the average of 33.35% of the last four years which are considerably favour for the company to introduce its new product into the market. (Average was used here because there are small differences between the numbers).

· Operation margin:

“Operatingmarginis a measure of profitability that tells investors how much of revenue will eventually become profit for a company” (Operating margin, 2010).

The operating margin of the company is 4.96% (2009). Both the operating margin and operating income implies the same meaning. From this analysis it is very clear that the operation margin of the company is showing a positive result for the company to implement its new product into the market. Despite the fear of decreasing in the future because it decreases over last four years.

* Net margin:

Net margin reflects the ability of the company in controlling the cost of its production and how effectively it is able to control its expenses. In the financial statement of Logitech it was found that the net margin is 4.85%(2009), which is still good for the organization when compared to the previous year, and it still decreases over last four years.

· ROCE:

“ROCE is a ratio that indicates the efficiency and profitability of a company's capital investment” (Return on capital employed - ROCE, 2009). The ROCE in the financial statement for the company in the year 2009 is 11.20%. This ratio shows that the investment made in the capital is highly effective for the company. It still shrinking despite the new product might give a push to the capital.

· ROE:

“The amount of net incomereturnedas a percentageof shareholders equity” (Return on enquiry - ROE, 2010). The return on equity of the company is 10.73% (2009). Also, it's shrinking over last four years; however, this still depicts that the company is having a strong financial power and it is having the ability to meet the requirement of their shareholders.

· ROTA:

The return on the total asset of the company in 2009 is 7.71% which is less than half of the average for previous three years. This component must be monitored after introducing the new product. This is the company's earnings that are calculated before interest and tax is termed as the return on the total asset. This reflects the ability of the company to effectively manage the assets possessed by it and generating more earnings out of it.

Measuring efficiency:

The efficiency of the company is measured by calculating certain ratios such as predicted cost of sales, Direct cost efficiency ratio, Predicted net operating expenses, Operating cost efficiency ratio, Fixed asset turnover, Inventory turnover, Debtor age and creditor age. All the ratios calculated are favourable for the company and are very effective in introducing new product into the market. The predicted cost of sales is £1,417,622.48. The direct cost efficiency ratio is 107.05%. The predicted net operating expenses are £ 524,080.64%. The operating cost efficiency ratio 110.36%. The fixed asset turnover is 522.36%. The inventory turnover is 9.461003054. The debtor age is 35 and creditor age is 38 days. All these shows a positive impact on the company and this will be beneficial for the company in introducing a new product into the market.

Measuring risk:

In order to measure the risks that are associated with the company various ratios are calculated. The important ratio that is calculated for assessing the risk is the gearing ratio. The gearing ratio derived for the company is 13.5%. This shows a positive impact on the company and it removes all the restriction that come across the way in implementing the new product into the product.

Measuring liquidity:

In order to measure the liquidity of the company the various ratios that are calculated for the company are the current ratios and the acid test ratios. The current ratio for the firm is 345.2% and the acid test ratio calculated is 271.3%. The current ratio shows a favourable direction to the firm. A positive current ratio enables the firm's ability to meet its current liabilities by using its current assets that are available with the firm.

From all the ratios calculated above it is clear that the organization is having a very good ability to introduce a new product into the market and increase the financial position of the company. The ratios reflect the over al performance of the organization. By analyzing all the ratios mentioned above, it is suggestible for the organization to carry out with new product that it is planning to get into. The strong financial capacity along with the innovative skills of the employees will lead the organization to overcome all the problems and will definitely lead to the successful performance of the organization. During the recession period even though the company faced many problems it never affected the productivity of the company. “Discerning consumers in this recessionary environment are expecting more from their product experience at whatever price they pay, and we're ready for them” (Designed for the digital future, 2009, p.3).

2.2 SWOT analysis for Logitech in the UK consumer electronics sector including the Sat Nav opportunity:

SWOT analysis is a wide term that has been frequently used by the organization to identify and analyze the various potentialities, weakness, opportunities available and the treats that has to be faced by the organization. SWOT analysis helps to understand the entire negative as well as positive aspects of the organization.

“The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant” (Strategic management: SWOT analysis, 2007).

The SWOT analysis helps in understanding the various areas where the organization has to concentrate to improve its overall productivity. Internal aspects of the organization that are benefit to the entire business of the organization is called the strength and aspects which are not beneficial to the organization are called the weakness of the organization. Also we can see that various factor which affect the organization in the surroundings this we becomeopportunities, and threats of the organization. Here it the case Logitech is the one the fastest communication device that is widely used in the U K people.

The SWOT analysis can be represented in a tabular format.

Strength

* Easy to use and handle the technology used to operate is not so completed.

* Modern technology is adapted to manufacturingLogitech product.

* Easy mobility is possible very large extent.

* A Sat Navs device helpsto faster communication.

* Ithelps to increase the revenue of the organization.

* Sound financial strength if the company

* Experience to be in the filed for a long year

* Leaders in of innovation

Weakness

* Modern technology is adapted to manufacturingLogitech product but this technology may changed

* More expensive

* Sat Navs devices sometimes createinconvenience to the customer.

Opportunities

* Sat Navs devices provide various opportunities in this fields because its not popularly used

* Sat Navs so most of them are interested to use it and know it

Threats

* Emerging lot of the competitions

* All over the pricing of the product is increased that will adversely affect the progress of the organization it will lead to one of the threats.

3 Logitech Resource and Cost Estimation:

3.1 Cash Flow Forecast:

Year 1

Year 2

Year 3

Year 4

Unit Sales

56,447

67,319

87,033

111,351

Unit Price (£)

200

Total Sales (£)

11,289,400

13,463,800

17,406,600

22,270,200

Table 3.1

Table 3.1 shows the cash flow forecast for the first four years of production of Sat Nav by Logitech. It's clearly shows the increase of sales over the years, and in year four it almost double. (See the monthly forecast for 4 years in Apndx A)

Costs £

Year1

Year2

Year3

Year4

Materials cost

3,104,585

3,702,545

4,786,815

6,124,305

Direct Labour

846,705

1,110,764

1,579,649

2,223,123

Electricity for machinery

112,894

134,638

174,066

222,702

Packaging

282,235

471,233

783,297

1,224,861

Shipping

169,341

336,595

435,165

779,457

Consumables

169,341

134,638

87,033

111,351

Rent

1,000,000

1,000,000

1,000,000

1,000,000

Marketing

564,470

677,364

812,837

975,404

Office staff Salaries

112,894

124,183

136,602

150,262

Insurance

130,000

130,000

130,000

130,000

Site Maintenance

55,000

56,650

58,350

60,100

Total Cash out (£)

6,547,465

7,878,610

9,983,813

13,001,565

Table 3.2

In table 3.2, fixed costs and variable cost as the variable costs increase yearly due to the increase of the unites selling. However, marketing increases because the need of advertisements. Moreover, Site Maintenance is increases during the years because the increase in the production. The staff salaries also increase because they deserve the prise for the high increase of sales. They don't need to increase the storage capacity because the rent is high which means bigger warehouses. (See the monthly forecast for 4 years in Apndx B)

Net cash flow

4,741,935

5,585,190

7,422,787

9,268,635

Opening balance

411,000

5,152,935

10,738,125

18,160,912

Closing balance

5,152,935

10,738,125

18,160,912

27,429,547

Table 3.3

Table 3.3 show the cash flow for the first four years with opening balance of my student number. As it appears in the table how the balance is increased rapidly by closing balance for year four by more than 6000%. (See the monthly forecast for 4 years in Apndx D)

3.2 Contribution Margin and Break-Even Analysis:

Graph 1 shows how many units are needed to prevent loosing and going to the profit stage. As it shows, all the units over the blue bar are profits, and it's significantly higher in whole four years. This means the firm cover the costs early which give a green light to launch the project. (See the calculation for 4 years in Apndx C).

Graph 2 shows the contribution margin for the product which clearly illustrate that for entire four years the price still cover over 50% of the variable cost that also encourage the start of the new product. (See the calculation for 4 years in Apndx C).

4 Xgage Financial Analysis:

Sales ( With estimated 17.7%)

Less : Costs :

(1) Materials

(2) Machining Costs

(3) Variable Selling

(4) Production in labour

(5) Packing costs

(6) Rent ( with provision for expansion)

5000 X 6 months = 30,000

6000 X 6 months = 36,000

(7) Marketing ( semi variable costs)

2000 X 6 months = 12,000

2500 X 6 months = 15,000

(8) Property rates

1600 X 12 months

Profits/ Incomes

600,000

200,000

60,000

400,000

30,000

66,000

17,000

19,200

2,000,000

13,92,200

6,07,800

4.1 Financial Accounting:

Sales

£2,000,000

Less COGS

Material:

Machining Costs:

Production Labour:

Packing Costs

Total COGS

Gross Profit

£600,000

£200,000

£400,000

£30,000

£1,230,000

£770,000

Less Operation Expenses

Variable Selling:

Rent:

Marketing:

Property Rates:

Total Operation Expenses

Operation Profit

£60,000

£66,000

£17,000

£19,200

£162,200

£607,800

4.2 Management Accounting:

Sales

£2,000,000

Less Variable costs

Material:

Production Labour:

Machining Costs:

Variable Selling:

Packing Costs

Total Variable Costs

Contribution Margin

£600,000

£400,000

£200,000

£60,000

£30,000

£1,290,000

£710,000

Less Fixed Costs

Rent:

Property Rates:

Marketing:

Total Fixed Costs:

Profit / Income

£66,000

£19,200

£17,000

£102,200

£607,800

5 Logitech Business Case
5.1 Prepare Profit and Loss Projections:

Year 1

Year2

Year3

Year4

Sales

£11,289,400

£3,386,820

£1,128,940

£2,257,880

£169,341

£6,942,981

£4,346,419

£13,463,800

£4,039,140

£1,346,380

£2,692,760

201,957

£8,280,237

£5,183,563

£17,406,600

£5,221,980

£1,740,660

£3,481,320

£261,099

£10,705,059

£6,701,541

£22,270,200

£6,681,060

£2,227,020

£4,454,040

£334,053

£13,696,173

£8,574,027

Less COGS

Material:

Machining Costs:

Production Labour:

Packing Costs

Total COGS

Gross Profit

Operation Expenses

Office staff Salaries:

Insurance:

Site Maintenance:

Rent:

Marketing:

Total O. E.

Operation Profit

£112,894

£130,000

£55,000

£1,000,000

£564,470

£1,862,364

£2,484,055

£124,183

£130,000

£56,650

£1,000,000

£677,364

£1,988,197

£3,195,366

£136,602

£130,000

£58,350

£1,000,000

£812,837

£2,137,789

£4,563,752

£150,262

£130,000

£60,100

£1,000,000

£975,404

£2,315,766

£6,258,261

 

5.2 Capital Investment Appraisal 1:

Year

Net Cash Flows

Discount Factor (13%)

Cash Flows (PV)

Discount Factor (27%)

Cash Flows (PV)

1

£2,484,055

0.8850

£2,198,279

0.7874

£1,955,949

2

£3,195,366

0.7831

£2,502,440

0.6200

£1,981,131

3

£4,563,752

0.6931

£3,162,909

0.4882

£2,227,978

4

£6,258,261

0.6133

£3,838,309

0.3844

£2,405,685

Total

£11,701,937

Total

£8,570,743

Less Year 0

£9,000,000

Less Year 0

£9,000,000

NPV (13%)

£2,701,937

NPV (27%)

-£429,257

By estimating £9,000,000 as an invested money in year, and table 5.2.1 shows the Net Present Value (NPV) with discount rates of (13%) and (27%). The results found were one positive and another one negative.

Table 5.2.1

IRR = 13%+ 27%-13%*2,701,9372,701,937+429,257= 25.1%

Equation 1

Equation 1 shows how the IRR was calculated and result by 25.5% which is good because it's significantly higher than 13%. Thus, IRR of 13% is excellent to start the project.

5.3 Capital investment appraisal 2:

Table 5.3.1 shows the same NPV that used in previous question, but with different investment value of £9,400,000. This increase in the investment occurs due to buying specialist software, which result in decreasing the IRR (Internal Rate of Return).

Year

Net Cash Flows

Discount Factor (13%)

Cash Flows (PV)

Discount Factor (27%)

Cash Flows (PV)

1

£2,484,055

0.8850

£2,198,279

0.7874

£1,955,949

2

£3,195,366

0.7831

£2,502,440

0.6200

£1,981,131

3

£4,563,752

0.6931

£3,162,909

0.4882

£2,227,978

4

£6,258,261

0.6133

£3,838,309

0.3844

£2,405,685

£11,701,937

Total

£8,570,743

Less Year 0

£9,400,000

Less Year 0

£9,400,000

NPV (13%)

£2,301,937

NPV (27%)

-£829,257

Table 5.3.1

IRR = 13%+ 27%-13%*2,301,9372,301,937+829,257= 23.3%

Equation 2

When comparing Equation 1 and Equation 2, we found the IRR before the new specialist software investment is better than after buying this software. Therefore, it's better not to proceed buying this product.

6 Conclusion:

It is necessary to state that, in so far as the Logitech is concerned, it would be unwise to invest in the Satellite Tracking system because all capital budgeting exercised do not approve of this. Besides, the NPV, which is considered an important derivative, has also been negative, thus adding to the woes of this company. Capital budgeting is a critical area of business, especially when this company is contemplating a major capital expenditure in terms of starting a new division or business line. Financing must be provided well in advance in order to ensure that adequate resources are available for financing the scheme. However, in this case it is seen that the financial forecasts and projection do not add up to confirming the project's financial competence and economic success, since they do not cause value addition. It is well advised that Logitech seeks out ways and means by which more prospective and profitable business ventures are take up , which could not only increase its bottom line, but could also offer incremental revenues and profits in the years to come. Since the underlying reason for diversification and acquisition plans are to consolidate business and add revenues and financial strength to stakeholders, unviable and non potential business diversification plans, on its part, could also cause severe damage to business, if implemented.

Thus, it is in Logitech's financial and economic interests to take up projects that are not only viable per se, but are also capable of increasing the revenue generation potential in later years. Saddling themselves with cost burdens could, in effect, tell upon the financial health and sustainability of this business that could, in real terms be economically crippling in later years.

7 References

Analytical tools in financial modelling - financial ratios, 2010. [Online] Financial Modelling Guide. Available at: http://www.financialmodelingguide.com/financial-ratios/financial-ratios/ [Accessed 25 January 2010].

Designed for the digital future, 2009. [Online] Logitech, p.3. Available at:http://files.shareholder.com/downloads/LOGI/828124383x0x308649/2E8292E0-A5EF-4804-97A6-2273EFBA14D7/Logitech_2009_AR_Inv_Proxy_Web-ready_072309.pdf [Accessed 25 January 2010].

Financial management statement, 2009. [Online] Accountingformanagement.com. Available at: http://www.accountingformanagement.com/accounting_ratios.htm [Accessed 25 January 2010].

Financial ratio analysis, n.d. [Online] Financial Management Resources. Available at: http://www.bizmove.com/finance/m3b3.htm [Accessed 25 January 2010].

Gross margin: Definition, n.d. [Online] Investorwords.com. Available at: http://www.investorwords.com/2245/gross_margin.html [Accessed 31 January 2010].

Operating margin, 2010. [Online] Investing Answers. Available at: http://www.investinganswers.com/term/operating-margin-370 [Accessed 31 January 2010].

Ratio analysis, n.d. [Online] Universal Teacher Publications. Available at: http://www.universalteacher4u.com/cbse/xii/acctheory/ch11/page1.htm [Accessed 25 January 2010].

Return on capital employed - ROCE, 2009. [Online] Value Based Management.net. Available at: http://www.valuebasedmanagement.net/methods_roce.html [Accessed 31 January 2010].

Return on enquiry - ROE, 2010. [Online] Investopedia. Available at: http://www.investopedia.com/terms/r/returnonequity.asp [Accessed 31 January 2010].

Sales and distribution, 2009. [Online] Logitech. Available at: http://www.logitech.com/index.cfm/about/&cl=in,en [Accessed 25 January 2010].

Strategic management: SWOT analysis, 2007. [Online] NetMBA. Available at: http://www.netmba.com/strategy/swot/ [Accessed 25 January 2010].

8 Appendix:

Apndx A:

Year 1

Jan

Feb

Mar

Apr

may

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Unit Sales

4,110

4,110

4,110

4,200

4,150

4,201

5,570

6,311

4,110

5,754

4,521

5,300

56,447

Unit Price (£)

200

Total Sales (Thousands £)

822

822

822

840

830

840.2

1,114

1,262.2

822

1,150.8

904.2

1,060

11,289.4

Year 2

Jan

Feb

Mar

Apr

may

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Unit Sales

4,900

5,100

4,900

5,100

5,100

5,100

7,100

7,200

5,100

7,000

5,300

5,419

67,319

Unit Price (£)

200

Total Sales (Thousands£)

980

1,020

980

1,020

1,020

1,020

1,420

1,440

1,020

1,400

1,060

1,083.8

13,463.8

Year 3

Jan

Feb

Mar

Apr

may

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Unit Sales

6,300

6,500

6,100

6,500

6,900

6,800

8,633

8,900

6,900

8,700

7,300

7,500

87,033

Unit Price (£)

200

Total Sales (£Thousands)

1,260

1,300

1,220

1,300

1,380

1,360

1,726.6

1,780

1,380

1,740

1,460

1,500

17,406.6

Year 4

Jan

Feb

Mar

Apr

may

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Unit Sales

8,100

8,300

7,700

8,500

8,900

9,100

10,700

11,900

8,900

10,700

9,251

9,300

111,351

Unit Price (£)

200

Total Sales (£Thousands)

1,620

1,660

1,540

1,700

1,780

1,820

2,140

2,380

1,780

2,140

1,850.2

1,860

22,270.2

Apndx B:

*

Y1

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

Total

1

226,050

226,050

226,050

231,000

228,250

231,055

306,350

347,105

226,050

316,470

248,655

291,500

3,104,585

2

61,650

61,650

61,650

63,000

62,250

63,015

83,550

94,665

61,650

86,310

67,815

79,500

846,705

3

8,220

8,220

8,220

8,400

8,300

8,402

11,140

12,622

8,220

11,508

9,042

10,600

112,894

4

20,550

20,550

20,550

21,000

20,750

21,005

27,850

31,555

20,550

28,770

22,605

26,500

282,235

5

12,330

12,330

12,330

12,600

12,450

12,603

16,710

18,933

12,330

17,262

13,563

15,900

169,341

6

12,330

12,330

12,330

12,600

12,450

12,603

16,710

18,933

12,330

17,262

13,563

15,900

169,341

7

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

1,000,000

8

47,039

47,039

47,039

47,039

47,039

47,039

47,039

47,039

47,039

47,039

47,039

47,039

564,470

9

9,408

9,408

9,408

9,408

9,408

9,408

9,408

9,408

9,408

9,408

9,408

9,408

112,894

10

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

130,000

11

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

55,000

496,327

496,327

496,327

503,797

499,647

503,880

617,507

679,010

496,327

632,779

530,440

595,097

6,547,465

*

Y2

Jan

Feb

Mar

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec

Total

1

269,500

280,500

269,500

280,500

280,500

280,500

390,500

396,000

280,500

385,000

291,500

298,045

3,702,545

2

73,500

76,500

73,500

76,500

76,500

76,500

106,500

108,000

76,500

105,000

79,500

81,285

1,009,785

3

9,800

10,200

9,800

10,200

10,200

10,200

14,200

14,400

10,200

14,000

10,600

10,838

134,638

4

24,500

25,500

24,500

25,500

25,500

25,500

35,500

36,000

25,500

35,000

26,500

27,095

336,595

5

14,700

15,300

14,700

15,300

15,300

15,300

21,300

21,600

15,300

21,000

15,900

16,257

201,957

6

14,700

15,300

14,700

15,300

15,300

15,300

21,300

21,600

15,300

21,000

15,900

16,257

201,957

7

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

1,000,000

8

56,099

56,099

56,099

56,099

56,099

56,099

56,099

56,099

56,099

56,099

56,099

56,099

673,190

9

11,220

11,220

11,220

11,220

11,220

11,220

11,220

11,220

11,220

11,220

11,220

11,220

134,638

10

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

130,000

11

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

55,000

572,769

589,369

572,769

589,369

589,369

589,369

755,369

763,669

589,369

747,069

605,969

615,846

7,580,305

* Y3

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

1

346,500

357,500

335,500

357,500

379,500

374,000

474,815

489,500

379,500

478,500

401,500

412,500

4,786,815

2

94,500

97,500

91,500

97,500

103,500

102,000

129,495

133,500

103,500

130,500

109,500

112,500

1,305,495

3

12,600

13,000

12,200

13,000

13,800

13,600

17,266

17,800

13,800

17,400

14,600

15,000

174,066

4

31,500

32,500

30,500

32,500

34,500

34,000

43,165

44,500

34,500

43,500

36,500

37,500

435,165

5

18,900

19,500

18,300

19,500

20,700

20,400

25,899

26,700

20,700

26,100

21,900

22,500

261,099

6

18,900

19,500

18,300

19,500

20,700

20,400

25,899

26,700

20,700

26,100

21,900

22,500

261,099

7

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

1,000,000

8

72,528

72,528

72,528

72,528

72,528

72,528

72,528

72,528

72,528

72,528

72,528

72,528

870,330

9

14,506

14,506

14,506

14,506

14,506

14,506

14,506

14,506

14,506

14,506

14,506

14,506

174,066

10

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

130,000

11

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

55,000

708,683

725,283

692,083

725,283

758,483

750,183

902,322

924,483

758,483

907,883

791,683

808,283

9,453,135

* Y4

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

1

445,500

456,500

423,500

467,500

489,500

500,500

588,500

654,500

489,500

588,500

508,805

511,500

6,124,305

2

121,500

124,500

115,500

127,500

133,500

136,500

160,500

178,500

133,500

160,500

138,765

139,500

1,670,265

3

16,200

16,600

15,400

17,000

17,800

18,200

21,400

23,800

17,800

21,400

18,502

18,600

222,702

4

40,500

41,500

38,500

42,500

44,500

45,500

53,500

59,500

44,500

53,500

46,255

46,500

556,755

5

24,300

24,900

23,100

25,500

26,700

27,300

32,100

35,700

26,700

32,100

27,753

27,900

334,053

6

24,300

24,900

23,100

25,500

26,700

27,300

32,100

35,700

26,700

32,100

27,753

27,900

334,053

7

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

83,333

1,000,000

8

92,793

92,793

92,793

92,793

92,793

92,793

92,793

92,793

92,793

92,793

92,793

92,793

1,113,510

9

18,559

18,559

18,559

18,559

18,559

18,559

18,559

18,559

18,559

18,559

18,559

18,559

222,702

10

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

10,833

130,000

11

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

4,583

55,000

882,401

899,001

849,201

915,601

948,801

965,401

1,098,201

1,197,801

948,801

1,098,201

977,934

982,001

11,763,345

Apndx C:

BEP (Y1) = 1862364200-83=15918 Units

CM% (Y1) = 117200=58.5%

BEP (Y2) = 2142580200-87.5=19046 Units

CM% (Y2) = 112.5200=56.3%

BEP (Y3) = 2652245200-90.2=24156 Units

CM% (Y3) = 109.8200=54.9%

BEP (Y4) = 3410662200-96=32795 Units

CM% (Y4) = 104200=52%

Apndx D:

Y1

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

325,673

325,673

325,673

336,203

330,353

336,320

496,493

583,190

325,673

518,021

373,760

464,903

OB

411,000

736,673

1,062,346

1,388,019

1,724,222

2,054,575

2,390,895

2,887,388

3,470,578

3,796,251

4,314,272

4,688,032

CB

736,673

1,062,346

1,388,019

1,724,222

2,054,575

2,390,895

2,887,388

3,470,578

3,796,251

4,314,272

4,688,032

5,152,935

Y2

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

407,231

430,631

407,231

430,631

430,631

430,631

664,631

676,331

430,631

652,931

454,031

467,954

OB

490,000

897,231

1,327,862

1,735,093

2,165,724

2,596,355

3,026,986

3,691,617

4,367,948

4,798,579

5,451,510

5,905,541

CB

897,231

1,327,862

1,735,093

2,165,724

2,596,355

3,026,986

3,691,617

4,367,948

4,798,579

5,451,510

5,905,541

6,373,495

Y3

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

551,317

574,717

527,917

574,717

621,517

609,817

824,278

855,517

621,517

832,117

668,317

691,717

OB

630,000

1,181,317

1,756,034

2,283,951

2,858,668

3,480,185

4,090,002

4,914,280

5,769,797

6,391,314

7,223,431

7,891,748

CB

1,181,317

1,756,034

2,283,951

2,858,668

3,480,185

4,090,002

4,914,280

5,769,797

6,391,314

7,223,431

7,891,748

8,583,465

Y4

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

737,599

760,999

690,799

784,399

831,199

854,599

1,041,799

1,182,199

831,199

1,041,799

872,266

877,999

OB

810,000

1,547,599

2,308,598

2,999,397

3,783,796

4,614,995

5,469,594

6,511,393

7,693,592

8,524,791

9,566,590

10,438,856

CB

1,547,599

2,308,598

2,999,397

3,783,796

4,614,995

5,469,594

6,511,393

7,693,592

8,524,791

9,566,590

10,438,856

11,316,855

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