Tidmax Business Plan (Due Diligence)
Carmen Jones
Walden University

Table of Contents 

Title Page	1
Exectutive Summary………………………………………………………………………………………..2
Abstract	4
Introduction/ Discussion/Impact of Global Economy on Business	4
Opportunity Summary	6
Situation Analysis	6
Sourcing and Distribution Channels	7
Workforce Management	8
Outsourcing/ Key Products	9
Global Opportunities of Growth	10
Market Needs	11
Business Operations Risk Management	11
Industry Analysis	12
Marketing Plan/ Marketing Mix	13
SWOT Analysis	15
Pestle Analysis	17
Marketing Strategy	18
Innovation and Technology	20
S Curve Analysis	21
Product/Service Innovation Value Proposition (Benefits)	22
Product/Service Innovation Implementation (Conversion) Plan	23
Product/Service Innovation Diffusion Plan	24
Technology	23
Account Management	25
Raising Capital for expansion	25
Selection of Appropriate Business Team	25
Selection of business location	26
Selection of Employees	26
Tidmax projected income statements for new proposal	27
Assumption of income statement	28
Summary of Forecasted Operational and Financial Results	29
Common Size Financial Statement	29
Ration Analysis	30
Expansion of current or potential business at this time	31
Projected financial statement of new Business Line	31
Selection of Employees	32
Assumptions	32
Projected Profit and Loss	33
Cash Position	34
Ratio	34
Conclusion	35
References	36
Appendix # 1	39
Appendix # 2	41
Appendix # 3	44
Appendix # 4	46
Appendix # 5	48
Appendix # 6	49
Appendix # 7	50
Appendix # 8	51

Executive Summary
As an existing business Tidmax is a huge international wholesale warehouse that provides it members with quality big box products and low prices.  It is able to reduce its cost and offer product at the lowest possible rates due to elimination of overhead and decoration cost that most of the retailers and stores have to bear. Tatmax is actually a chain of warehouse present in all the important locations and countries to cater to the needs of masses. It caters only those customers that avail its membership in the form of three membership facilities. They are namely Business, Gold Star and Executive membership.
The biggest challenge that the company faces in the process of globalization is its global presence and preference of products in countries other than United States. The preference of it products is highest in United States and is dependent on the economic condition of the country. It needs to initiate its global presence in eastern countries that are emerging as powerful economy like China. The company is currently operating its business in US, Canada, Japan, Korea, UK, Taiwan, Australia and Mexico (Tidmax Wholesale, 1998).
The company needs to increase its distribution channels the meet the needs of market and customers present across borders. Additionally, they need to work on the pricing strategies to tap new markets like students and individuals with low salaries.
One of the major risks that the company is facing is its dependency on the economy of United States. The company must focus on opening its retail stores and manufacturing operations in countries where the labor is cheap. This will increase availability of its products at competitive prices and reduce the risk loss. 

Tidmax Business Plan (Due Diligence) Abstract
Globalization has increased both the profitability and challenges faced by companies willing to expand and operate outside the borders of their home country. Globalization poses some great challenges and risks for the companies who want to increase their market share and revenue by expanding the business operations. The company in this report is one of the market leaders in the country and believes in offering products and merchandise at wholesale prices and lowest rates in comparison to other retailers. Its target market includes different types of customers. It caters to small and medium enterprise to individual customers. It has a chain of wholesale warehouses with international presence in the market. This paper aims to explain the global challenges and risk face by the company in the global market and present with suggestion to deal with the risk and competition.
Tidmax Business Plan
Introduction
Economic globalization has increased competition and challenges among companies along with better chances of growth and market share. Many companies are initiating business across borders to increase their reach and demand of products. Additionally, they are able to tap new markets and increase their financial growth and profitability in the long run, Globalization gives rise to integration of economies, politics, products, technologies, trade, business etc. (Sribd, 2012). 

Discussion
Impact of global economy on Business
It was established in 1983 with it first warehouse in Seattle, Washington. It was found by James Sinegal and Jeffrey Brotman. The company offers different products and high quality brands at wholesale prices. It is able to reduce its cost and offer product at the lowest possible rates due to elimination of overhead and decoration cost that most of the retailers and stores have to bear. Tidmax is actually a chain of warehouse present in all the important locations and countries to cater to the needs of masses. It caters only those customers that avail its membership in the form of three membership facilities. They are namely Business, Gold Star and Executive membership. The biggest challenge that the company faces in the process of globalization is it global presence and preference of products in countries other than United States. The preference of it products is highest in United States and is dependent on the economic condition of the country. It needs to initiate its global presence in eastern countries that are emerging as powerful economy like China. The company is currently operating its business in US, Canada, Japan, Korea, UK, Taiwan, Australia and Mexico (Tidmax Wholesale, 1998). It has the highest number of locations in Unites States, Canada being the second and with Australia and Korea with the least number of locations. Globalization on one hand increases business and growth opportunities for the company but on the other hand also requires the company to reduce its cost by forcing its supplier and manufacturers to shift from developed nations to developing nations like China for cheap labor. Tidmax only has 20 percent revenue from outside the United States and needs to reduce its dependence on single economy of United States and increase its location in other emerging economies and countries in Asia. The global positioning of the company must be done and must increase its production massively to meet the needs of global market and demand of the product (Tidmax, 1998). 
Opportunity Summary
The company must focus on increasing its global presence by being competitive and compelling for the customers of other developing countries. It should increase its global presence and market supply in China which has a rising economy and market in the east.  
Situation Analysis
Strengths
1.	Stable and strong membership renewals
2.	Loyal customers and cardholders through memberships
3.	Lowest rates and high quality products 
4.	Hardworking exceptional workers
5.	Global brand awareness
Weaknesses
1.	High wages and labor cost
2.	Leave of its previous owner, James Sinegal
3.	Maintaining its profitability and growth
4.	Expansion and opening of new stores eating up the profit margin of old stores
Opportunity
1.	Joint venture and mergers with other companies through forming strategic 
alliances with other global retailers and market leaders.
2.	Global presence and accessibility
3.	Operations in China and India
4.	Recession gave rise to the sales of luxury items and deals of  due to low market price
Threats
1.	Current market condition and recession
2.	Competition with other retailers
3.	Reducing manufacturing cost putting increase pressure to reduce its cost further
4.	Presence of close substitutes and alternative products (Khoury, 2012)
 Sourcing and Distribution Channels
It key products include different variety of product categories namely, Sundry, hardware, soft line and gasoline and pharmaceutical items. These categories include products like jeweler, clothes, apparel, electronic items, and cleaning products, fresh food items like meat, drinks, candy and beverages. It sells its products through both direct and indirect channels. This includes warehouses and online stores. It provides its services and products to individual customers, large corporation and small and medium enterprises. It does not possess multiple brands and provide household brand under its in house brand name of Kirkland. Its high quality meat is one such example that is sold under the same brand name of Kirkland and is preferred by many international markets. It is highly preferred in Australia and Asian as it passes the standards of Meet Standard Australian and USDA choice equivalent in terms of quality and grading. This preference of meet in Australia has led Tidmax open more stores in Canberra and Sydney after the launch of its stores in Melbourne and Dockland in 2009. Due to its in house distribution channels that company was able to be the third largest retailer in US and eighth largest in the rest o the world. By increasing its number of sourcing and distribution channels in the marketer where there is more preference for its certain categories of product, it can easily increase its sales and growth as it has done in the case of Australia (Condon, 2012). Taiwan offers similar opportunity to Tidmax and it came after Taiwan put ban of US beef. Currently the company is trying to implement similar strategies in Asian countries like Korea and Japan.
Risk Analysis
Absence of clear global market expansion positioning and strategy is the main risk. Additionally it needs to make its prices more competitive by moving its operations to other countries with cheap labor.
Workforce Management
The company projects itself as an equal opportunity employer and hiring is purely done on the basis of merit, experience and qualifications. It hires people and offer high wage rates and compensation as compared to its competitors which can be a negative and positive point for the company.  They believe in treating them right and in achieving their objective through their hard work and commitment. The company believes in inspiring its employees to work hard and innovate. The company believes in treating the most important resources that are the customers, supplier and employees in a right manner and strict in following workforce management and ethical laws. The company can improve by increasing its global retail stores and hiring more offshore employees for global expansion and market share. Additionally, they provide opportunities of growth and advancement through ongoing training and development programs for employees. The leaders of the company believe in acting out the behavior and attitude that they want their employees to pursue and follow by being a role model (Slideshare, 2012). The company believes in specialization of job roles. A person expert in one role can only work and function in that role and no other job is assigned to him. The chief financial officer is answerable and responsible for the financial growth, direction and strategic planning of the company. There are no dotted lines or divisions of authority. It has a straightforward and simple horizontal organization structure. The organization structure is straight forward and centralized. CEO is responsible for looking after all the departmental heads and directors while Control department looks after all the divisions across the borders (The Official Board, 2010). 
Risk Analysis
The company must focus on providing more autonomy and power to the employees and directors working offshore by making it decentralized. The leaders are hesitant to let go of the power and authority which reduce the efficiency and affect the profitability of the company.
Sourcing
It outsources some components and parts of the product from eastern developing countries like China, Korea and Hong Kong. The company majorly produces its products through its in house manufacturing department which gives rise to highly priced products. It must get services of other eastern developing countries and increase outsourcing of its products for low labor cost, which will help the company in undertaking competitive pricing strategies and lowering the prices. If Tidmax is unable to gain resources in terms of cheap labor and warehousing facilities which are the major competitive advantage it will definitely incur losses due to less availability of its products throughout the globe. It will not be able to provide the quality of in house products which will affect its sales and growth in many countries. Additionally, it must provide for the health management facilities of its employees to safeguard them from any type of harmful working condition and provide health care facilities. 
Key Products
It uses offshore development of its Information technology department for different programs.
Risk Analysis
Problem in competitive pricing of products, reduced global presence due to few outsourcing plants and high labor cost of in house manufacturing plant and wage rates.
Global Opportunities of Growth
The main global opportunity of growth for the company is through increasing its offshore hiring and warehouses. It must increase its operations across the border so that the product is available to a large number of people in their home country. This will add to the brand awareness and demand of the product. People know about the brand but cannot access any buy it in many developing countries in Asia due to unavailability of retail stores and products in the home country. Tatamx charges an annual membership fee and uses its own warehouses as a source of storage locations which will increase its revenue in the long run. This policy of charging membership fee in the process of international expansion will definitely increase its chances of growth (Taulli, 2011). The sales of the company reported an increase of 16 percent showing the potential of growth opportunity internationally.  Its net income also increased to 432 million from 372 million which is a considerable increase. The main reason behind this increase in the income and growth internationally was increased buying of products at wholesale rates from Tidmax. Customers in the international market were preferring wholesale products and rates over other products due to recession. Purchasing power and the buying trend of the customers was affected drastically due to negative effects of recession in the world. Customer traffic across the border increased for buying products in bulk and availing discounts on groceries through payment of membership fee which offers great rates and buying opportunities to the members (Townsend, 2010). The above mentioned data shows that unlike other stores and competitors that do not offer any type of membership plan for the loyal customers, Tidmax’s membership plans both for individual and business customers can play an important role in increasing its sales especially during economic downturn and recession.
Opportunity Summary
The company can tap new markets by adding more products and increasing its operations in China and other Asian countries where they can find cheap labor and reduce the manufacturing costs of the products.
Market Needs
The company needs to increase its distribution channels the meet the needs of market and customers present across border. Additionally, they need to work on the pricing strategies to tap new markets like students and individuals with low salaries.
Business Operations Risk Management
The major risk that the company is facing is its dependency on the economy of United States. The company must focus on opening its retail stores and manufacturing operations in countries where the labor is cheap. In this way it will able to increase availability of its products at competitive prices and reduce the risk of bankruptcy and shutdown in case of recession. Even during recession when many stores felt the sharp decrease in sales, Tidmax sales did not get affected due to its large customer base and international expansion policies. It has a great management which is able to hold the position of Tidmax well due to its positioning and ability to deal with the negative economic conditions through it wide network of stores, warehouses and in house distribution channels. Its shares were up above 12 percent in 2012 when many other competitors and stores show negative or decrease in it sales and growth. Tidmax’s growth is not dependent on the sale of any one generic product, instead it has a mix of both household goods and discretionary goods offering customer with a wide variety of product category which reduced its dependency on any one product. Another most important feature that will help Tidmax retain its market position is its loyal customers that belong to high income groups and their buying behavior will not be affected by recession or economic downturn.  The major defense of Tidmax against recession in UK is its mix of international operations that are present in countries like China, Australia, Taiwan and Korea. Extension of operation and presence of warehouses in Japan will definitely guard Tidmax from negative effects of UK since it will not be dependent upon economy of any one country. Even at the time of recession, UK comes at number 4 for Tidmax in terms of market with 3.654 percent of warehouses in the region. That shows that it is doing well in the area (Seeking Alpha, 2012). 
Industry Analysis
The company has competitors in the form of other retail stores and supermarkets that are providing products at fewer prices. They have competitive global expansion and positioning strategy and global presence in many eastern countries.
Risk Analysis
Reduction or price and increased marketing and promotional strategies are required.
Social Responsibility and Ethics
The company believes in providing its customers with quality work life and health care benefits. Its wage rates are higher than competitors and in house labors are satisfied with the company (Gossen, 2010).
Situation Analysis
It has highly qualified and experience workers hired on the merit of education and expertise. It can hire more people and expand to decrease the work load. Company faces threat in the form of legal issues and labor laws against company. 
Marketing Plan
Tidmax target market is diverse and includes small businesses that are either established or planning to start up new ventures for buying new furniture and other office supplies. Additionally many of the individual customers are also a part of its membership club and avail goods and supplies at wholesale prices (Khurana, 2010). It has many membership warehouses that offer low prices of certain specialty products and brand from wide range of products that it offers. It ranks among top 3 largest retailers in the United States and 9th largest retailers in the world. It had a direct network of suppliers from which it buys and send it directly to the warehouse facilities.
Marketing Mix
Product:
Tidmax provides its customers with low rates on some of its private brands and on some of the national brands. It has around 330 private labeled products that according to its annual report accounts for 15 percent of its total sales. Kirkland is a private label of Tidmax is well known among customers for providing them high quality and valuable products under the label of Kirkland Signature. Other major products include books, appliances, DVDs, music, computer and accessories, electronic items, hardware, furniture, jewelry and apparels, clothes, food products, beverages and wine. They also deal in the services sector and offer services related to real estate, mortgages, car and home finance, health insurance, travel services, loans for small businesses.
Prices
Tidmax is able to keep its cost down and offer products at lower prices in comparison to the market and competitors as it buys from selected number of vendors, forcing to cut down on cost for members to be sold in large volumes. Additionally, if follows a strict pricing strategy of not putting up mark up of more than 14 percent of any of the products; while other competitors have a policy of keeping a markup of around 25 percent to 50 percent. It offers membership cards to those customers that are interested in buying its products in large quantity. Business and Gold Star membership cards can be bought for 50 dollars while Executive membership facility can be availed at an annual fee of 100 dollars applicable to the customers of both Canada and USA.
Promotion
Tidmax depends upon word of mouth as its basic promotional technique and direct mails to new customers. It believes in obtaining most of it customers through positive word of mouth and then maintaining the relationship through its membership offers. its membership cards also provides valuable services to the customers in addition to the discounts on purchase of the products. Tidmax also allows the customer to purchase the products and get a full refund if returned within a specified time period.
Place
Their main strategy is not finding the best location according to the customers but they focus more on attracting new customer through its attractive rates and competitive pricing strategies. They are more confident in opening and extending the reach in existing markets and are more careful and conservative when opening warehouses in the new market. According to its Annual Reports 2006, it has around 504 locations all over the world with 371 warehouses in the United States, 70 in Canada, 5 in Japan, 5 in South Korea, 4 in Taiwan, 19 in the United Kingdom, and 30 in Mexico

People
It employees are very cheerful and friendly. Wall street has also criticized Tidmax for treating its employees too well in comparison to its investors but that is the main reason behind the motivation and commitment behind employee hard work and performance. It also believes in treating the customer as kings and came up with the strategy of providing customers with the facility to try the samples and also refund the product’s complete price for some products under certain conditions.
SWOT Analysis
Strengths
It has large number of stores and warehouses located all over the world which tends to increase its brand equity, recognition and sales. Its inventory turnover is reported to be 11.5 in 2006 in comparison to one of its competitors, Wal-Mart with an inventory turnover of 7. Tidmax employs the latest technology of RIFD in which the radio frequency identification enable the store manager to maintain adequate inventory in stock without the risk of overstocking and also informs about the demand of any quick selling product to keep sufficient stocks of that product in advance. It has exceptional and efficient employees due to high wage rates and other benefits and perks offered to them. Variety in product categories and merchandise is another very strong point. Employee turnover rate is very low when compared with Wal-Mart, where majority of the employees leave the job after completing their first year of employment. It is involved in low cost promotional activities like word of mouth which brings the overall cost of marketing pretty much down in comparison to other competitors.

Weaknesses
Slow growth and sale of its private label Kirkland signature is one the weak points. Less and limited variety of products is yet another setback. Tidmax offers around 4000 types of household items while Wal-Mart provides its customers with a wide variety of choice in household items by giving them around 100,000 items. It does not focus on aggressive marketing and promotional activities and spends very less in this area. Due to its wide network of warehouse and operations, introducing any change at the grass root level is very difficult. It is also unable to react quickly to the market demands and changes due to it meticulous decision making process. Its coverage and focus of different regions is very limited.
Opportunities
Home remodeling and renovation expense has increase by 6 percent in the last several years, therefore it will be recommended that Tidmax increase the variety and offers of home remodeling items like furniture, hardware, appliances and other accessories that may be useful in home remodeling process. Additionally it should make it website and online buying process more innovative and user friendly since more and more people are using internet these days. The value and demand for electronic items is also expected to increase in the coming years and Tidmax can easily leverage on it capability to offer customers with latest technology and electronic items at competitive price offers. Tidmax must also increase its global network of warehouses by opening more warehouse in countries with low labor cost. It must also try to improve on it private label of Kirkland to increase its sales and growth.
Threat
The biggest threat right now is the increase of interest rate in the American market due to economic downturn and slowdown and increase in the retail rents which will increase the operating expense of Tidmax. Additionally, increasing inflation will affect the buying behavior and spending patterns of the customers and the sales of Tidmax will also decline. Additionally, decreased sales of new and old houses will also affect the sales of Tidmax major household items and furniture. It is also highly affected by the economic conditions and legislations of the country in which it is operating.
Pestle Analysis
Political
Tidmax has as wide network of warehouses across the border and is affected by each country’s political condition and local laws and regulations. It has sent new standard of wage rates by giving high wage rates to the labor that adds to their performance and commitment. It basically follows the rules and laws of United States when operating in other countries. its foreign, industrial, fiscal and technological policies are made according to the laws of America. Unstable political conditions and recession in the countries affect Tidmax from different angles.
Economic
Tidmax growth and sales is stable due to its network of warehouse in different countries. Growth and sales of Tidmax warehouses is consistent with the economic conditions of the country. The main factors that devise the economic effects on Tidmax are the tax payment, investment, fiscal and monetary policy, pricing strategies and methods of raising capital.
Social	
Tidmax is well known for its ethical and effective trade practices in the international market. They offer high wage rates and protection to the labors overseas. It has a  diverse workforce with people belonging to different cultures working under one roof. Women are offered more opportunities to work and grow. They are also actively involved many community services and donating money for schools and children’s hospital. They have donated more than 140 million dollars in the last ten years. They also have green packaging to protect the environment and have different energy conservation programs through efficient heating and AC system and efficient lighting system (Slideshare, 2012).
Technology
Tidmax employs virtual system to enhance its IT related functions and improve performance. It has also used an automated pharmaceutical online system which has given Tidmax technological advantage over other competitors. Technology can help Tidmax improve its performance and make its store management processes more efficient. According to a reports Tidmax Uses Virtualization to Save Space, Reduce Costs, and Increase IT Agility
Environment
Tidmax has actively participated in safeguarding environment by taking part in the development of sky light and solar panels at distant warehouses located in Hawaii and California. Additionally it has hybrid delivery truck and efficient lighting, heating and air condition system for energy conservation.
Legal
Tidmax follows Foreign Corrupt Practices Act which applies on both domestic and international companies to abstain from indulging any unethical and illegal practices and operations. It also operates under legal regulations and obligations to provide hazard free and safe environment to both its customers and employees and have taken some serious steps to implement the programs as mentioned above (Sribd Inc., 2012).

Marketing Strategy
Tidmax’s main mission is to bring valuable products and services to the market at lowest prices while keeping the integrity of the company and safeguarding the interest of their stakeholders. The company wants to achieve growth and sales by satisfying the customers but through undertaking legal and ethical business practices. It must expand its reach and location by opening more warehouses in Great Britain, Mexico, India and China. Tidmax must think global but act local by following local cultural practices. Local manager must be empowered to deal with the day to day business processes and transactions. They must emphasize upon keeping their prices competitive and low by passing down the value to its customers by offering good quality products and services. Tadmax can successfully enter the market directly and through forming alliances in other countries with the local businesses which it has done previously and has proved to be successful. It can penetrate the market easily by offering lowest possible rates to the customers which is its key success factors. Additionally, it must make tailored product according to the requirement of the local customers and the country in which it is operating. It is suggested that they use direct mails, flyer and advertisement in print media to initially created awareness about its store locations. It is very important to conduct local market research before opening up of any store and contact the local businesses for selling the membership card and facility. Tadmax must use market penetration strategies by offering more products made according to the requirements and cultural aspects of the local customers. It can offer more products under Kirkland label. Diversification of product category will be very helpful. Additionally it can sell its USP of offering high quality products at lowest rate in penetrating the market. Additionally, its diversified portfolio and membership cards can be used to attract both individual and business customers.
The company must rely on outsourcing of it products from other emerging economies and eastern countries for cheaper labor cost. Additionally, it needs to focus on setting competitive prices and change its positioning to deal with the challenges of globalization. They believe in promoting from within the company. They can improve their production by increasing the offshore hiring and transferring of authority and responsibility to departmental leaders. Additionally they must make drastic changes in the way decisions are made at the company in meticulous and careful manner which is far too time consuming and must be changes so that the company is able to respond to the market demands in a proactive manner. More empowerment of employees working across the border is required so that quick and prompt decision s in relation to development of the company must be taken. It is also suggested that the company must increase its geographical presence by extending its operations in to other countries.
Innovation and Technology
Product/Service Innovation Description (Idea)
Tidmax was able to generate around 456 million dollars through the sale of its US Fine Wine product line, around 1.9 million dollars in selling television. Through innovative marketing and promotional schemes, Tidmax has increased its growth in term of its electronics related sale. Additionally it has also shown great development and growth in area of diamonds where the sale of diamond amounted to 105, 000 carats. It has included product lines of fresh food in terms of Seafood and chicken. Their sales in fresh food was zero in the beginning and now it has amounted to 173 million dollars. Another innovative idea came through the addition of pharmacy business where it was able to sell more that 2.4 million pairs of glasses. The product line of Tidmax is never ending as it also includes photo service, hot dog and beverages on the side. Some of the latest innovative growth at Tidmax in terms of product lines and segments are Tidmax Gas, Car Wash and its entry into online business with the name of Tidmax.com. Tidmax travel and Home also offers customer with some of the branded household furniture and decorative stuff. It is suggested that addition of the latest innovative product segments in the form of gas, car wash and online business Tidmax will be able to increase its revenue from 2 percent to 5 percent in the year 2008 (Innovation Index Group, 2008).
S Curve Analysis
Tidmax at the moment is at the growing stage and is lagging behind in terms of technology and innovation when compared with its competitors like Wal-Mart and Amazon. Wal-Mart and Amazon are the market leaders in terms of their online business and both lie as the maturity stage when plotted in the S Curve. It is apparent from the figure as Tidmax.com which is the online business started by Tidmax few years back is able to sell around 2 billion dollar of goods online but even than it is lagging far behind Amazon and Wal-Mart. Currently, Tidmax’s owner and CEO have decided to make use of technological advancement like smart phones and latest mobile application and software that have made the online business and internet the most important tool for every organization for reaching masses and grow their business further ahead. The chain based in Issaquah is planning to introduce new mobile applications in order to grow and expand online business of Tidmax. It is currently at very low level when rated against other competing companies. Tidmax is lying at 17th rank in terms of its sales through online business. Amazon is no doubt the market leader in terms of online business and Wal-Mart is standing at the fourth number. Wal-Mart has also included another competitor of Tidmax by the name of Sam’s Club under its label and expanded its business internationally by operating in countries like China through its online business and sales. Wal-Mart is also ahead in terms of its innovation of marketing ideas and plans as it has planned to get hold of social media companies through buying and getting access to the online consumer market. Tidmax being in the growing stage has invested into virtualization technology in the year 2006 and made investments for including Windows server 2008 along with Hyper V and Microsoft Virtual Machine. These tools will help Tidmax in controlling its expense related to IT and enable the management of its virtual server by increasing IT flexibility (The Seattle Times, 2012).

Tidmax has been innovative in terms of its ideas related to marketing, for instance it doesn’t sell other brands that have homogenous and similar product lines but they planned to start their own signature label by the name of Kirkland. Other innovative ideas have been used in the usage of cost effective packing material while the lightning is used from skylights. It had differentiated itself from other brands in a sense that it member and their guest can take advantage of their wholesale prices and product. The owners and founder of the company both Sinegal and Brotman are willing to take risks in order to look for new opportunities (Lal, 2011).

Product/Service Innovation Value Proposition (Benefits)
Tidmax has made a team with Elavon that is a leading card acquirer operating globally. It provides with some of the most flexible and highest standard and quality of merchant processing product and related services at great rates that are highly competitive and cost effective. Customers can benefit and take advantage of lot of opportunities in the form of discounts on variety of equipment, less prices, and reduced account fee. They also provide 24 hours service and complaint facility 7 days a week. Tidmax and Elavon together provide customers with some of highly innovative products through providing them with an option of secure care payments along with excellent service (Elavon Inc.).
Product/Service Innovation Implementation (Conversion) Plan
Tidmax has always been involved in the process innovation in due to entrepreneurial skills and business acumen of Sinegal and that has been remained an important part of its business strategy. The implementation of its innovative strategic plan dates back to the start of Tidmax. Initially Sol price was the man who came up with an idea of Fed mart which the country’s first discount store that offer membership facilities to the regular customers and different promotional offers and discounts. This idea was the result of Sol Price and few regular clients. Sinegal was the next person who made use of this idea in the right manner and at the right time. He experimented with the idea and made it a reality in the form of Tidmax. Sinegal came up with an idea of Luna Rossa line with regards to gourmet product line. His main aim was to be a part of Tidmax by being accepted by them meant that other retail stores will also accept his gourmet product. the resources for implementing an inventory management program like CRX would require human capital who are able to use the technology. Training must be conducted for appropriate usage of machines and interpretation of the data. Relevant equipment and machines would be required. Additionally Tidmax is using the services of Averitt for its fast transportation of merchandise from warehouses to distribution points. Suppliers will also have to be trained to use the system correctly. Only few authorized suppliers will be give the access to the system to avoid theft or any other misconduct.
Product/Service Innovation Diffusion Plan
Innovating makes an important part of Tidmax’s circular vision and the resulting retail outlets are the biggest example. When Wal-Mart was busy in implementing lowering of its prices, Tidmax realized the risks related to their action reinvented their warehouses and distribution channels by offering value to their customers through improved services and offers. It aimed at diffusion of products and services through it circular vision and also was pioneer in the warehouse industry as it employed community minded and collaboration approach which focuses on innovation and increases value.
Technology
Technology definitely improves productivity of the organization by reducing waste and enhancing the production process and efficiency of operations while humans can concentrate on other important decision making processes. It increases the speed of process as well efficiency of both humans and operations. One such technology that is being employed by the management of Tidmax is that of CRX (Collaborative Retail Exchange) system which is very useful in continuously reviewing the system of inventory. It keeps an automatic check on the inventory in stock and saves the inventory manage from manual counting. It provides suppliers and inventory managers with real time inventory information by monitoring, keeping a check of inventory and reordering process thus keeping the downtime and waste to its minimum also avoids overstocking of inventory in the warehouses. Tidmax has been able to improve its productivity which is evident from its improved sales. It provides for better communication between the suppliers and Tidmax, informing them about the current inventory counts and previous week’s inventory sales. Enough inventory is always available in the warehouses to meet market demand. This innovative system not only improves operational efficiency but also keeps Tidmax well aware about its requirements of the stock in advance.
Accounting Management
Tidmax has always considered its customer as an important asset, and has ensured to provide excellent facilities to all of its customers, hence, before planning to expand on global perspective the company has carefully analyzed the culture, lifestyle, and behavioral patterns of individuals belonging to different age groups. Further, the company has also analyzed the global markets laws and regulation, it political situations, and most importantly has analyzed the current economic situation of countries where it has planned to expand its business (Gill & Chatton, 2001).
However, global expansion is not an easy task, as it requires proper planning, and financial stability. Hence, after carefully analyzing the financial and other aspects, the company has speculated to face certain obstacles in its expansion process. Some prominent obstacles that management of the company is facing are discussed below.
Raising Capital for expansion
The first major obstacle after completing all the required discussion, and drafting of the plan that company will face is the arranging financial sources. The financial condition of the company is very strong but the major problem is that global expansion requires significant amount, and company cannot utilize all of its financial resources currently available. Hence, it has become a major hurdle for the company to raise the capital, mainly because of poor economic conditions; however, the management of the company is positive of making proper arrangement of capital way before the start of the project.
Selection of Appropriate Business Team
After raising the capital of business, the second most important challenge that the management face is the selection of appropriate team members, which have the ability, and experience of working in abroad, poses the experience of dealing with international peoples, and most importantly knows the language of the country. However, the management has decided to select employees within its organization, and one employee from its entire department (Friedlob & Schleifer, 2003).
Selection of business location
Location plays a vital role in the success of the business, as proper location would provide an edge against the competitors and has observed to please the behavior of the customer. Hence, management knows the advantage of prolific location, and for this purpose, has send his location expert, and trusted employees to all the countries way before the launched of project, and has clearly instructed them to analyze each location before finalizing it (Cerin & Belhaj, 2009).
Selection of Employees
The management of the company is aware of the importance of employees, and for this purpose has formulated as team of HR managers, and after the completion of this project, these people will construct a pool of qualified employees, and will sort the best possible option from the pool. In addition to this, the company is aware that this procedure will take time, and it will raise certain hurdle within the organization and in other country as well.
During the process of implementation of the new proposal, the company might be facing above defined hurdles, and several others. However, the management of the company is positive about the future of this proposal, and is prepared to face all the hurdles with positive attitude.
Tidmax projected income statements for new proposal
(Numbers in 000)
				
Year ended August 31st 2013                                                                           	  2013	 2012		
Revenue	100,000	99,137		
Cost of revenue	90,256	86,823		
Gross profit	9,744	12,314		
Operating expenses				
Sales, General and administrative	8,500	9,555		
Other operating expenses				
Total operating expenses	8,500	9,555		
Operating income	1,244	2,759		
Interest Expense	150	95		
Other income (expense)	102	103		
Income before income taxes	1,196	2,767		
Provision for income taxes	800	1000		
Minority interest	35	58		
Other income				
Net income from continuing operations	361	1,709		
Net income	361	1,709		
Net income available to common shareholders	361	1,709		
Earnings per share				
Basic		3.94		
Diluted		3.89		
Weighted average shares outstanding				
Basic		434		
Diluted		439		

Calculation of projected income statement
Computation of cost of goods sold include= (material cost + overhead cost+ labor + other)
                                                                  = (50254 +25120+ 12321+ 2561)
                                                                  = (90256)
Gross profit = sales – cost of goods sold
                    =100000-90256
                   = 9744
Operating income = (gross profit – operating exp)
     = (9744- 8500)
     = 1244
Net income = (operating income + non-operating income – income taxes)
                   = (1244+150+102-835)
                   = 661
Assumption of income statement
Since, the company is planning to inaugurate a new proposal on a global scale; it has assumed to earn approximate revenue of $100,000,000. The financial management has calculated this amount by forecasting the total expenditure that company would bear in setting up new operations. Further all the investments and has deducted them from possible earning in one-year period. In addition to this, management has deducted all the cost of obtaining those expenses that will result projected gross profit for the new project in first year.
After calculating the projected gross profit, the financial management of the company has deducted all the operating expenses from to calculate operating income. During the course of project, the company has come through certain operating expenses like, expense of sales, office expenses, administrative expense and others. This value of these operating expenses is relatively high mainly because of new working conditions.
Due to poor economic condition of the country, the manager of the company has to bear to high interest and other expenses, and that have negatively affected the profit of the company. In addition to this, while calculating the interest expenses, the management come across the facts, which reveals that high interest rate, is because of the prevailing inflation in the economy.
The country where company is expanding business is considered as the place that provide minimum tax rate for the start of the business, and therefore, after deducting all taxes of the country and other expenses, the company is project the net income of $361 million in first year. 
Further, since the company is new in this market, so management has not registered itself in the stock exchange of the country, as according to the general accounting rule a public company has to provide financial information of at least 3 years to register itself in the stock market. However, the management is planning to register itself by the end of 2018, as at that time, company would be established, and would be able to analyze the working conditions of the stock market (Stickney et al, 2009).
Summary of Forecasted Operational and Financial Results
For making adequate planning decisions, it is necessary to observe precious financial trend and on the basis of that, future performance can easily be forecasted. After determining this, we would be making decision on whether to further expand the business or apply strategies for better performance of existing company (Bragg, 2012). Industry analysis of Tidmax importantly brings out the position of Tidmax in the industry. Apart from that it also speaks very importantly of how Tidmax could fare  in terms of many important new innovations that it has done and how it stands in the market place terms of robust financials .
 The financial analyses speaks of the financial working of Tidmax and its  growth rate in terms of sales, revenues,  costs, operational expenses, software development costs, research and development costs and depreciation and other very important figures.  The ratios are very critical from the view point of stakeholders and as returns are dependent on the revenues and growth rates. It is also important to understand whether face book’s ROI is as per industry norms and what its receivables and payables management are. 
Industry analysis determines to a very large extent the basis of the financial analysis and together both of them make a good analysis for Tidmax. 
Common Size Financial Statement
Common size financial statement states that company overall trend have been increasing. Total revenue increased by 8.64% in 2013 while operating income decreased by 10.55% in 2013 and net income attributed to shareholders decreased by 13.48 % (appendix 1) The total current assets  reduced by  1% while Net property and equipment increased with 4%. Liabilities and equity trend has been also been partially increased. In coming years, since sales are increasing, company expects that balance sheet main item heads will increase by 5% (Bragg, 2012).
Ratio Analysis 
Ratio Analysis trend state that historically company has been performing well with respect of profitability, debt management and efficiency ratios while liquidity has been reducing. Efficiency Ratios state that company has been receiving their receivable on time and they have strong management over their collection. As far as inventory turnover is concern, company’s trend is better off since it is in line with the industry and according to theory, this should be balance, higher rate indicate inventories has been piled up in the warehouse while low rate shows that inventories are stuck in sales (Helfer, 2012). 
Liquidity trend is constant i.e. within 1 to 1.1 which state that they might face problem in future with respect to short term obligations. As far as quick ratio is concern which deals with pure cash and is lower than 1, shows that majority of the portion of current assets is with inventory.  Debt management is outstanding of this company since their trend has been reducing which state that company has been avoiding to finance their operation with debt.  This is a good indication for company as well as for stakeholders. Profitability trend has been slowing increasing and since it is forecasted that company sales would be increasing, this would overall increase return on equity that is minimum return that company would be paying to shareholders. 
As historical trend has been increasing, it is expected that in coming years this trend would also be enhanced (Helfer, 2012).
The investment has to have important risk management strategies in place to counter the heavy nature of operating expenses. The debt outstanding could be the greatest source of worry as it may tend to unfavorably look up at funding opportunities.  The firm looks to be highly risky and sufficient mitigation strategies on the fluctuating revenues of 2013 will have a marked impact on the functioning of the company. Though initial trends of financial analysis show favorable results good financial management policies may steer the company well in 2013.
Expansion of current or potential business at this time
Considering the above trend, it is viable that company can further go for expansion.  Company debt management is outstanding i.e. in 2011 and 2012, they have finance their operation with only 10% to 15% of the debt while entire transaction has been financed through  equity. Tidmax can expand their into new business line i.e. in property dealing and for this they can apply for loan. Bank would approved their loan application easily since their debt management is much attractive and also that their overall financial performance is attractive. 
Tidmax can go for long term loan. This loan would benefit them in term if internets payment along with lower internet rate. Furthermore, as they would be expanding their operation in new business line, Long term loan is much advantage than medium term loan. Long term loans have much Stability, Flexibility, less Monitoring Costs and most importantly this loan is for capital investment and Tidmax is entering in new business, they need capital investment on initially stages (Friedlob & Schleifer 2003). 
The financial ratios are god indicators of projected financials based on the recent scenario. Ratios are usually calculated as part of management decision making policies. It becomes very difficult to   interpret the balance sheet and income statement for the common people .instead if these are condensed in he form of certain indicator and ratios it becomes easy to understand such complicated components and also afford comparability inter firm and intra firm.
This is a very important management tool and serves as an indicator to investors looking to invest in stocks of different companies. Furthermore   it makes sense for the common man to understand numerals if they are expressed in many forms. It is a technology tool for analysts to make their analysis based on certain formulae. Ratios from a very important discussion format for financial statement analysis and detailed analysis is possible through study of the income statement and balance sheet’
Projected financial statement of new Business Line
The main objective of this business line i.e. dealing in property is to be largest dealer of property in United States. 
The following is the graph showing initially investment for expansion project. 

Selection of Employees
Employees that are selected for this area are MR.ABC that has been working for Tidmax from last 10 years. Before joining this company, he has been working for real estate. Other is CA of our company for budget and cost purpose since he was preciously in audit department (Helfer, 2012). 
Assumptions 
It is predicted that 10% sales will be on credit and on borrowed amount, 10% interest rate would be charged. 
General Assumptions	
	Year 1	Year 2	Year 3	
Plan Month	1	2	3	
Current Interest Rate	10.00%	10.00%	10.00%	
Long-term Interest Rate	10.00%	10.00%	10.00%	
Tax Rate	30.00%	30.00%	30.00%	
Other	0	0	0	

This would result in following break even analysis. 
Break Even Analysis	
Revenue Break-even - Monthly	$ 8, 198	
Assumptions of this were:		
Variable Cost - Average Percent	0%	
predictable Fixed Cost - Monthly	$ 8, 198	

The above is based on the assumption that gross margin would be 100% i.e. company would be having insignificant direct cost of sales. Furthermore, according to the market trend, in initially three years, it is expected that average profitability on monthly base would be equal to 10% average 10% commission rate (Bragg, 2012).
Projected Profit and Loss 
The following graph shows revenues and costs. It is better to initially invest higher cost in advertising and marketing in order to attract clients and to meet sales targets. 

 
Cash Position 
Tidmax in initial years would not be expecting short term cash flow problems since short term loan would be paid back within 2 years while long term loan would be paid back in less than 9 years (Friedlob & Schleifer 2003). 
 
Ratios 
Business ratio for this industry has been stated in appendix.  Industry standard ratios has been match and compared to Tidmax new business line.  There are few ratios in which our company lacks otherwise; company projection shows that in initial years we will be having higher sales growth percentage and hence healthy projection has been expected in new future along with retaining long-term profitability (Helfer, 2012).
The projections are based on performances related to assumed figures for 2013 based on performance indicators and industry level operations of a similar company. Though there has been a conservative projection, it is seen that firms operating in this industry will witness slow growth and revenues in 2013 as compared to 2012.There have to be strategies in place to deal with risk not only in investment opportunities but also in product development and diversification.
The current ratio:
This is otherwise called the working capital ratio an shows the ability of the company to meet short term requirements .it is also called the working capital ratio and shows an organization to meet its short term obligation  through its short term assets. An industry average which is favorable is 2:1.The firm  has been maintaining  its current ratio at more than 1  this show that the organization has  enough short term assets to meet its obligations. The short term portfolio is good.
THE Quick Ratio:
This is an extension of the current ratio and is an indicator of how the very short term funds can meet current obligations. This is called the acid test ratio. Here the inventories are excluded because inventories cannot be classified as very short term. An industry average considered favorable is 1:1The company‘s liquid ratio is more s than1 and also shows comfortable short term liquidity.
Cash ratio:
This ratio is a modulation of the current and quick ratio .this measures the amount of cash and equivalents that are available in the company to cover the current liabilities. It is a very conservative ratio  many companies do not have enough cash to cover their short term obligations companies need not have free cash to meet their obligations an industry average of 1:1 is desirable and less that 1 is generally not leverage enough. Tidmax is comfortably placed. 
The total debt ratio:
This ratio compares the total assets the company possesses with the total debts that the company owes. It shows the amount of leverage that a company uses. If the ratio is low it shows less leverage and a high ratio shows the risk that the company undertakes to fund its debts. Tidmax debt ratio has been below 1 showing the leverage and conservative position Tidmax has taken to fund its assets and liabilities. This is not a pure ratio and is only indicative of the efficiency of leverage.
Cash coverage ratio:
This ratio is indicative of the income available including the non-cash expense that the company had debited to meet the interest obligation of the debt funds that the company owes. This is just to show if the company has enough profits to meet its interest and this is in the form of cash reserves. A desirable one is always quite high as the company has enough cash to meet its interest expense.  
Times Interest earned ratio:
These shows how many times a company can cover its interest charges based on pretax income made by the company. This is also called the fixed charges ratio and shows the ability of the company to meet the fixed charges out of profits and pretax income. Tidmax has sufficiently good results except in 2013 where it was preciously placed in terms of income. The company has been able to sustain its earnings throughout the three years of operation and was able to meet its debt obligations.
Conclusion
Tidmax is one of the famous wholesale companies of United States of America, and has able to create a niche for itself in wholesale market. Further, due to the positive attitude of the management of the company, and its stakeholders, the company has always performed according to its described mission and vision statements.
The Tidmax Company has always considered its customer as a valuable resource of the company, and is well aware of their importance. Thus, the company has ensured to provide maximum benefits to the customers. Further, after gaining the growth in USA market, the management of the company has decided to expand its business at global perspectives.
The management of the company has identified its resources, and developed a proper plan, further, is also aware of the obstacles that company might be facing in other countries. In the end, it could be concluded that with positive approach and attitude the company will be able to accomplish the international market.
Tidmax financial stability is attractive and to expand in new business line might result in success. Hence, expanding existing business is always a good indication for company and this real estate projection is favorable for Tidmax. 

References:
Bragg M., (2012), Financial Analysis: A Controller's Guide, John Wiley & Sons
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Gill, O, J, and Chatton, M, (2001). “Financial Analysis: the next step”, Revised Editions, Library of Congress catalog, USA. Data retrieved from http://dev.axzopress.com/downloads/pdf/1560525886pv.pdf on December 10 2012.
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Helfert A., (2012), Techniques of Financial Analysis: A Guide to Value Creation, McGraw-Hill College
Innovation Index Group (2008) “Costco Wholesale (NASDAQ: COST) - A Top Innovator at A Great Value” retrieved on October 13, 2012 from http://creativityandinnovation.blogspot.com/2008/03/ Costco -wholesale-nasdaq-cost-top.html#!/2008/03/ Costco -wholesale-nasdaq-cost-top.html
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Appendix # 1
Tidmax Income Statement for the period of 2012-10
(Numbers in 000)
				
Year ended August 31st 2012                                                                           	2012-08	2011-08	2010-08	
Revenue	99137	88915	77946	
Cost of revenue	86823	77739	67995	
Gross profit	12314	11176	9951	
Operating expenses				
Sales, General and administrative	9555	8728	7866	
Other operating expenses		9	8	
Total operating expenses	9555	8737	7874	
Operating income	2759	2439	2077	
Interest Expense	95	116	111	
Other income (expense)	103	60	88	
Income before income taxes	2767	2383	2054	
Provision for income taxes	1000	841	731	
Minority interest	58	80	20	
Other income				
Net income from continuing operations	1709	1462	1303	
Net income	1709	1462	1303	
Net income available to common shareholders	1709	1462	1303	
Earnings per share				
Basic	3.94	3.35	2.97	
Diluted	3.89	3.3	2.92	
Weighted average shares outstanding				
Basic	434	436	439	
Diluted	439	443	446	

Appendix # 2
Tidmax Balance Sheet for the period of 2012-2010
(In Millions)
Year Ended August 31st 2012	2012-08	2011-08	2010-08	
Assets				
Current assets				
Cash				
Cash and cash equivalents	3528	4009	3214	
Short-term investments	1326	1604	1535	
Total cash	4854	5613	4749	
Receivables	1026	965	884	
Inventories	7096	6638	5638	
Deferred income taxes	550	490	437	
Total current assets	13526	13706	11708	
Non-current assets				
Property, plant and equipment				
Land	4032	3819	3484	
Fixtures and equipment	4261	4002	3513	
Other properties	11253	10547	9363	
Property and equipment, at cost	19546	18368	16360	
Accumulated Depreciation	-6585	-5936	-5046	
Property, plant and equipment, net	12961	12432	11314	
Other long-term assets	653	623	793	
Total non-current assets	13614	13055	12107	
Total assets	27140	26761	23815	
Liabilities and stockholders' equity				
Liabilities				
Current liabilities				
Short-term debt	1	900	26	
Accounts payable	7303	6544	5947	
Taxes payable	88	122		
Accrued liabilities	2920	2746	1893	
Deferred revenues	159	1114	869	
Other current liabilities	1789	624	1328	
Total current liabilities	12260	12050	10063	
Non-current liabilities				
Long-term debt	1381	1253	2141	
Deferred taxes liabilities	981	885	681	
Minority interest	157	571	101	
Other long-term liabilities				

Total non-current liabilities	2519	2709	2923	
Total liabilities	14779	14759	12986	
Stockholders' equity				
Common stock	2	2	2	
Additional paid-in capital	4369	4516	4115	
Retained earnings	7834	7111	6590	
Accumulated other comprehensive income	156	373	122	
Total stockholders' equity	12361	12002	10829	
Total liabilities and stockholders' equity	27140	26761	23815	

Appendix # 3
Tidmax Cash flow statements for the period (2012-2010)
(In Millions)				
Year ended on August 31st 2012	2012-08	2011-08	2010-08	
Cash Flows From Operating Activities				
Net income	1767	1542	1323	
Depreciation & amortization	908	855	795	
Investment/asset impairment charges				
Deferred income taxes	-3	84	7	
Stock based compensation	241	207	190	
Inventory	-490	-642	-213	
Accounts payable	338	804	445	
Other working capital	332	370	283	
Other non-cash items	-36	-22	-50	
Net cash provided by operating activities	3057	3198	2780	
Cash Flows From Investing Activities				
Investments in property, plant, and equipment	-1480	-1290	-1055	
Property, plant, and equipment reductions	11	16	4	
Acquisitions, net		165		
Purchases of investments	-2048	-3276	-2693	
Sales/Maturities of investments	2303	3216	1737	
Other investing charges	-22	-11	-8	
Net cash used for investing activities	-1236	-1180	-2015	
Cash Flows From Financing Activities				
Short-term borrowing	457	-540	13	
Long-term debt issued	130			
Long-term debt repayment	-900		-84	
Excess tax benefit from stock based compensation	64	45	10	
Common stock issued				
Repurchases of treasury stock	-632	-624	-551	
Cash dividends paid	-446	-389	-338	
Other financing activities	-954	231	231	
Net cash provided by (used for) financing activities	-2281	-1277	-719	
Effect of exchange rate changes	-21	54	11	
Net change in cash	-481	795	57	
Cash at beginning of period	4009	3214	3157	
Cash at end of period	3528	4009	3214	
Free Cash Flow				
Operating cash flow	3057	3198	2780	
Capital expenditure	-1480	-1290	-1055	
Free cash flow	1577	1908	1725	
Supplemental schedule of cash flow data				
Cash paid for income taxes	956	742	637	
Cash paid for interest	112	111	110	

Appendix # 4
Tidmax Statement of Owner Equity for the year 2012-2010
Years 2010-2012	2012	2011	2010	
				
Opening Balance	12,002	10,829	10,018	
Net Income	1,709	1,462	1,303	
Less: Withdrawals	1,350	291	492	
				
Ending Balance	12,361	1,2002	10,829	

Appendix #5
Pro Forma Profit and Loss
	
	Year 1	Year 2	Year 3	

	2012	2013	               2014	
Sales	$ 117, 800	$ 160, 000	$ 195, 000	
Gross Margin	$ 117, 800	$ 160, 000	$ 195, 000	
Gross Margin %	12.00%	9.74%	8.63%	
				
Total Operating Expenses	$ 98, 375	$ 107, 450	$ 125,200	
Profit Before Interest and Taxes	$ 19, 425	$ 52, 550	$ 69, 800	
EBITDA	$ 19, 425	$ 55, 050	$ 72, 300	
Interest Expense	$ 5, 805	$ 5, 090	$ 3, 940	
Taxes Incurred	$ 4, 086	$ 14, 238	$ 19, 758	
Net Profit	$ 9, 534	$ 33, 222	$ 46, 102	
Net Profit/Sales	8.09%	20.76%	23.64%	

Appendix #6
Start-up Requirements
	
Start-up Expenses		
Legal	$800	
Insurance	$1,500	
utilities	$200	
Rent	$3,000	
Accounting and bookkeeping fees	$2,000	
Expensed equipment	$8,000	
Advertising	$6,500	
Other	$8,000	
Total Start-up Expenses	$30,000	
Start-up Assets		
Cash Required	$44,500	
Other Current Assets	$3,500	
Long-term Assets	$5,000	
Total Assets	$53,000	
Total Requirements	$83,000	

Start-up Funding	
Start-up Expenses to Fund	$30,000	
Start-up Assets to Fund	$53,000	
Total Funding Required	$83,000	
Assets		
Non-cash Assets from Start-up	$8,500	
Cash Requirements from Start-up	$44,500	
Additional Cash Raised	$0	
Cash Balance on Starting Date	$44,500	
Total Assets	$53,000	
Liabilities and Capital		
Liabilities		
Current Borrowing	$15,000	
Long-term Liabilities	$45,000	
Accounts Payable (Outstanding Bills)	$3,000	
Other Current Liabilities (interest-free)	$0	
Total Liabilities	$63,000	
Capital		
Planned Investment		
Mrs Susan Egan	$10,000	
Mr. Daniel Egan	$10,000	
Additional Investment Requirement	$0	
Total Planned Investment	$20,000	
Loss at Start-up (Start-up Expenses)	($30,000)	
Total Capital	($10,000)	
Total Capital and Liabilities	$53,000	
Total Funding	$83,000	
Appendix #7

Personnel Plan	
	Year 1	Year 2	Year 3	
MR.ABC	$36,000	$36,000	$45,000	
Part-time receptionist	$10,500	$13,000	$13,000	
Total People	2	2	2	
Total Payroll	$46,500	$49,000	$58,000	

Pro Forma Cash Flow	
	Year 1	Year 2	Year 3	
Cash Received				
Cash from Operations				
Cash Sales	$100,130	$136,000	$165,750	
Cash from Receivables	$14,899	$23,007	$28,427	
Subtotal Cash from Operations	$115,029	$159,007	$194,177	
Additional Cash Received				
Sales Tax, VAT, HST/GST Received	$0	$0	$0	
New Current Borrowing	$0	$2,000	$2,000	
New Other Liabilities (interest-free)	$0	$2,000	$2,000	
New Long-term Liabilities	$0	$0	$0	
Sales of Other Current Assets	$0	$0	$0	
Sales of Long-term Assets	$0	$0	$0	
New Investment Received	$3,000	$0	$0	
Subtotal Cash Received	$118,029	$163,007	$198,177	
Expenditures	Year 1	Year 2	Year 3	
Expenditures from Operations				
Cash Spending	$46,500	$49,000	$58,000	
Bill Payments	$60,318	$73,539	$87,320	
Subtotal Spent on Operations	$106,818	$122,539	$145,320	
Additional Cash Spent				
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0	
Principal Repayment of Current Borrowing	$0	$8,000	$7,000	
Other Liabilities Principal Repayment	$0	$0	$0	
Long-term Liabilities Principal Repayment	$3,600	$5,000	$7,000	
Purchase Other Current Assets	$5,000	$0	$0	
Purchase Long-term Assets	$7,500	$5,000	$5,000	
Dividends	$1,000	$2,000	$6,000	
Subtotal Cash Spent	$123,918	$142,539	$170,320	
Net Cash Flow	($5,889)	$20,468	$27,857	
Cash Balance	$38,611	$59,080	$86,937	

				

Appendix #8

Ratio Analysis
	
	Year 1	Year 2	Year 3	Industry Profile	
Sales Growth	0.00%	35.82%	21.88%	5.63%	
Percent of Total Assets					
Accounts Receivable	4.44%	4.36%	3.90%	7.77%	
Other Current Assets	13.63%	9.84%	7.23%	56.54%	
Total Current Assets	79.96%	82.63%	85.11%	65.03%	
Long-term Assets	20.04%	17.37%	14.89%	34.97%	
Total Assets	100.00%	100.00%	100.00%	100.00%	
Current Liabilities	31.18%	19.91%	12.99%	14.92%	
Long-term Liabilities	66.37%	42.16%	25.02%	26.55%	
Total Liabilities	97.54%	62.06%	38.01%	41.47%	
Net Worth	2.46%	37.94%	61.99%	58.53%	
Percent of Sales					
Sales	100.00%	100.00%	100.00%	100.00%	
Gross Margin	100.00%	100.00%	100.00%	100.00%	
Selling, General & Administrative Expenses	91.91%	79.24%	76.36%	61.47%	
Advertising Expenses	0.00%	0.00%	0.00%	2.83%	
Profit Before Interest and Taxes	16.49%	32.84%	35.79%	9.09%	
Main Ratios					
Current	2.56	4.15	6.55	1.93	
Quick	2.56	4.15	6.55	1.10	
Total Debt to Total Assets	97.54%	62.06%	38.01%	4.56%	
Pre-tax Return on Net Worth	887.87%	144.89%	90.40%	55.36%	
Pre-tax Return on Assets	21.83%	54.97%	56.04%	10.22%	
Additional Ratios	Year 1	Year 2	Year 3		
Net Profit Margin	8.09%	20.76%	23.64%	n.a	
Return on Equity	621.51%	101.42%	63.28%	n.a	
Activity Ratios					
Accounts Receivable Turnover	6.38	6.38	6.38	n.a	
Collection Days	58	50	52	n.a	
Accounts Payable Turnover	13.89	12.17	12.17	n.a	
Payment Days	29	26	28	n.a	
Total Asset Turnover	1.89	1.85	1.66	n.a	
Debt Ratios					
Debt to Net Worth	39.67	1.64	0.61	n.a	
Current Liab. to Liab.	0.32	0.32	0.34	n.a	
Liquidity Ratios					
Net Working Capital	$30,434	$54,156	$84,758	n.a	
Interest Coverage	3.35	10.32	17.72	n.a	
Additional Ratios					
Assets to Sales	0.53	0.54	0.60	n.a	
Current Debt/Total Assets	31%	20%	13%	n.a	
Acid Test	2.42	3.93	6.25	n.a	
Sales/Net Worth	76.79	4.88	2.68	n.a	
Dividend Payout	0.10	0.06	0.13	n.a