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IMMANUEL FARMS BUSINESS PLAN

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Confidentiality Agreement

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

It is acknowledged by reader that information to be furnished in this business plan is in all


respects confidential in nature, other than information which is in the public domain through
other means and that any disclosure or use of same by reader may cause serious harm or damage
to Immanuel Farm.

Upon request, this document is to be immediately returned to Immanuel Farms.

Executive Summary

Immanuel Farms is a small farm located in Choma, Southern Province. The company is
requesting funding of $595,000 for immediate purchase of the land, building and other assets
necessary to open an organic chicken farming operation. The company will be the only farm in
the area to provide the local community with organically grown vegetables, organically raised
chickens and goats, goat milk, cheese & butter and eggs.

During the Year 1 start-up phase, Immanuel Farms will require a period of time to raise and
cultivate the products the company intends to market for sale. As soon as the company has
accumulated sufficient product to sell, Immanuel Farms will establish a customer base at local
point of sale farmers' markets. The projected Profit and Loss Table for Year 2 and Year 3 for
Immanuel Farms reflects the company operating at the expected full capacity. After the demand
of this market has been adequately serviced, Immanuel Farms plans to consider expanding
operations by including various other venues to market their products including but not limited to
obtaining shelf space at small local grocery businesses within the target market area and possibly
expanding the product line to include ducks and geese.

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Chart: Highlights

1.1 Objectives

The objective of Immanuel Farms for this business plan is to obtain funding of $595,000 for the
following:

 Purchasing land and a building.


 Purchasing machinery and equipment.
 Purchasing animal’s grain and feed.
 Purchasing fencing.
 Hiring employees.
 Advertising and marketing expenses.

1.2 Mission

The mission of Immanuel Farms is to establish an organic farming business capable of servicing
the local community by creating jobs and producing healthy, high-quality products that
customers will benefit from.

1.3 Keys to Success

The key to success for Immanuel Farms will be to produce healthy, high-quality products with
minimum waste while providing customers with service that is superior to the competition.

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2.0 Company Summary

Immanuel Farms is a farming operation that provides the local community with organically
grown vegetables, organically raised chickens and goats, goat milk, cheese & butter and eggs.
The company will establish a customer base at the local farmers' markets and expand operations
through internet marketing and other venues. The company's products may be acquired at
various local point-of-sale markets, they may be picked-up at the business location or they may
be freshly delivered to the customers.

2.1 Company Ownership

Immanuel Farms is a Subchapter S Corporation located within the outskirts of Choma 11Km
away from Choma town. The company is principally owned and operated by Mwendalubi, E. as
a Manager with a 70% stake in the ownership of the company. Within the structure of the
Subchapter S Corporation, Immanuel Farms’S loyal employees, Dr. Frendo is the Vice Manager
and Chineva is the Secretary and each have a 15% ownership stake in the corporation.

Mwendalubi has over 35 years of experience in the agriculture and animal care business.
Mwendalubi was born and raised on the family farm where he, along with other family members,
seeks to start an organic farming operation. In the past, Mwendalubi has managed a wholesale
petroleum business and currently owns and operates a petroleum storage tank excavation &
removal business. Throughout the last several years, however, Mwendalubi has been actively
involved with organic farming and the marketing and distribution of organically grown products
and would like to be involved with organic farming on a full-time basis.

2.2 Start-up Summary

Immanuel Farms is requesting total funding of $595,000. Start-up expenses of $5,000 will be
incurred prior to opening for legal fees, labor, office equipment & supplies and grain & feed.
Before Immanuel Farms can begin operations, $515,000 of the requested funding is required to
purchase the start-up assets including the land, building, fencing, machinery & equipment, and
an inventory of animals and seeds. The remaining $75,000 of the total funding is to be retained
as available cash which will permit the company to maintain operations during the initial start-up
period while the company must wait for sufficient product to become available for sale.

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Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $1,500
Labor $2,000
Office Equipment and Supplies $700
Grain and Feed $800

Total Start-up Expenses $5,000

Start-up Assets
Cash Required $0
Start-up Inventory $0
Other Current Assets $0
Long-term Assets $0

Total Assets $0

Total Requirements $5,000

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Chart: Start-up

3.0 Products

Immanuel Farms is a small farming operation that offers customers organically grown
vegetables, organically raised chickens and eggs, goats, goat milk, goat cheese and butter.
Organic farming is the form of agriculture that utilizes techniques such as crop rotation, green
manure, composting and biological pest control to maintain soil productivity and control pests on
a farm.

4.0 Market Analysis Summary

Farming excludes or strictly limits the use of synthetic fertilizers, pesticides, plant growth
regulators, livestock antibiotics, food additives, and genetically modified organisms.
Approximately 2% of the U.S. food supply is grown using organic methods. Over the past
decade, sales of organic products have shown an annual increase of at least 20%. Retail sales of
organic food and beverages were nearly $13 billion in 2015. Organic foods are found at natural
food stores and major supermarkets, as well as through grower direct marketing groups such as
CSAs (Community Supported Agriculture) and farmers' markets.

Price premiums are important for the profitability of small organic farmers, and so many sell
directly to consumers in farmers' markets. While organic farms have lower yields, organic

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methods require no synthetic fertilizer and pesticides. The decreased costs on these expenses,
along with the premiums which consumers pay for organic products, create higher profits for
organic farmers. Organic farms have been consistently found to be as or more profitable than
conventional farms with premiums included, but without premiums profitability is mixed
depending on the efficiency and management of the farming facility.

Immanuel Farms is a small family-run business that exercises care and diligence in managing
operating expenses while providing a variety of healthy products that customers will enjoy and
consider an exceptional value.

4.1 Market Segmentation

Immanuel Farms is located in Harmony (population 6,555 in July 2017). The expanded market
for Immanuel Farms consists of the local population of Choma (population 23,154 in July 2009).
The nearest large cities within an hour drive of Choma are Harmony (34.5 mi., pop. 59,107) and
Chanda-mali (62.5 mi., pop. 382,618).

Choma has over 2,500 households, there are in excess of another 2,000 households in the various
cities within four miles of the city and there are over 8,500 household units in Harmony. The
median household income for residents in Choma is over $36,000 and in excess of $51,000 in
Chanda-mali.

In Harmony, 33.70% of the households had children under the age of 18 living with them,
61.50% were married couples living together, 6.30% had a female householder with no husband
present, and 28.60% were non-families. 24.40% of all households were made up of individuals
and 12.00% had someone living alone who was 65 years of age or older. The average household
size was 2.58 and the average family size was 3.07. In the county, the population was spread out
with 27.00% under the age of 18, 7.40% from 18 to 24, 26.40% from 25 to 44, 23.00% from 45
to 64, and 16.30% who were 65 years of age or older. The median age was 38 years. For every
100 females there were 101.70 males. For every 100 females age 18 and over, there were 98.90
males.

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Table: Market Analysis

Market Analysis
Year Year Year Year Year
1 2 3 4 5
Potential Customers Growth CAGR

Choma households 0% 2,624 2,624 2,624 2,624 2,624 0.00%


Surrounding city 0% 2,048 2,048 2,048 2,048 2,048 0.00%
households
Other town households 0% 3,918 3,918 3,918 3,918 3,918 0.00%

Total 0.00% 8,590 8,590 8,590 8,590 8,590 0.00%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

Immanuel Farms will establish a customer base at the various local farmers' markets and proceed
to solicit customers through internet marketing. The website will include pictures of the farm and
animals as well as a brief description of the products and services offered by the company. The
company's products may be acquired at the various local point-of-sale markets, they may be
picked-up at the business location or they may be freshly delivered to the customers.

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4.3 Industry Analysis

Immanuel Farms is determined to take advantage of increased consumer awareness in the value
of organic farming and food products. As of 2017, there were approximately 13,000 certified
organic producers in the U.S. The growth in the number of organic farmers has increased
steadily, similar to the growth of the U.S. organic industry, which has increased by rates of
approximately 20% per year for more than 10 years. When the Organic Farming Research
Foundation first began tracking certified organic producer numbers in 1994, there were
approximately only 2,500 - 3,000 certified organic growers in the U.S. at that time. As this
market continues to grow, making and selling organic food products will continue to be a viable
and attractive economic option for a growing number of producers such as Dean's Organic
Farming.

4.3.1 Competition and Buying Patterns

The competition for Immanuel Farms consists of several large farms using traditional chemicals
and pesticides in their operations. The higher yields and lower prices are factors to consider for
the company to compete in the market. Although costs for organically produced products are
lower, the increasing trend of consumers and the premium pricing for healthier, more nutritious
products will permit Immanuel Farms to operate successfully in the local target area.

5.0 Strategy and Implementation Summary

As soon as Immanuel Farms has accumulated sufficient product to sell, the company will
establish a customer base at local point of sale farmers' markets. After this objective has been
met, and the company adequately meets the demand within the immediate local target market
area, Immanuel Farms intends to expand operations. It is the intention of Immanuel Farms to be
the first company in the area to supply organic products to the growing trend of consumers
seeking healthier eating alternatives.

5.1 SWOT Analysis

Immanuel Farms is the only farm using organic farming methods in the area. The company is a
relatively small operation and faces competition from many larger traditional farms in the area

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that use chemicals and pesticides. Immanuel Farms should be able to take advantage of the trend
of consumers towards healthier eating habits with the products it offers.

5.1.1 Strengths

As a small operation, Immanuel Farms can take advantage of increased consumer awareness in
the value of organic farming and food products. As the only producer of organic products in the
area, the company will be able to satisfy the needs of the growing trend of consumers in the local
area searching for healthier organic products.

5.1.2 Weaknesses

One of the weaknesses of Immanuel Farms is the size of the operation. The company is located
in an area of the country where several larger farming operations do business.

5.1.3 Opportunities

Currently there are no other organic farming operations in the area. Although there are several
large farms, they all rely on traditional farming methods using chemicals and pesticides to
produce their products. Immanuel Farms is establishing itself to take advantage of the growing
trend among consumers towards living a healthier lifestyle. Consumers are willing to pay a
premium for the products that offer these advantages and Immanuel Farms is supplying the
products that meet the needs of the market demand.

5.1.4 Threats

The most significant threat to Immanuel Farms is unforeseen disease among the livestock or
contamination of the products they sell. Other potential threats may come in the form of
government restrictions and regulations, especially if Immanuel Farms grows and expands in
size to warrant closer scrutiny of the company's operations. Another significant threat for the
company is the traditional farming operations that service the local target market area.

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5.2 Competitive Edge

The competitive edge for Immanuel Farms is the fact that it is the only company in the local area
to offer healthy, organically grown and raised products. The various competing farms in the area
are all traditionally run operations that utilize chemicals and pesticides.

5.3 Marketing Strategy

As soon as Immanuel Farms has grown and raised sufficient products, the company will begin to
establish a customer base at local point of sale farmers' markets. After this objective has been
met, and the company sufficiently meets the demand within the immediate local target market
area, Immanuel Farms intends to expand operations. Expansion of the operations may include
offering the company's fresh organic products at local grocery markets, soliciting local
restaurants and eating establishments that prefer to offer customers healthy organic alternatives,
approaching various local businesses to consider offering healthy organic products at their
outings and functions and targeting an expanded market area through internet sales of the
company's products.

5.4 Sales Strategy

Immanuel Farms will build and establish a customer base with point of sale sites at various
farmers' markets throughout the local area. In an effort to insure customers are satisfied with the
freshness of their products, Immanuel Farms offers customers the option to have their purchase
freshly delivered or they may pick up their purchase directly from the business location if they
do not wish to carry their purchase with them from the point of sale locations.

5.4.1 Sales Forecast

Initially, Immanuel Farms will require a period of time to raise and cultivate the products the
company intends to market. Vegetables will need to be planted and have time to grow before
they are harvested for market. Chickens require approximately six months to mature before they
are able to produce eggs. They generally have a practical egg producing period of two years
before they are slaughtered and sold. Goats will require a gestation period of four months before
they are ready to produce sufficient milk to sell and make cheese and butter.

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During Year 2 and after the company has established a customer base, Immanuel Farms is
expected to be operating at full capacity. This will permit the company to expand the business to
include various other venues to market their products.

Table: Sales Forecast

Sales forecast
Year 1 Year 2 Year 3
Sales $28, 000 $75, 000 $75,000
Eggs
Goat Milk $21, 600 $45, 000 $45, 000
Goat Cheese $21, 600 $45, 000 $45, 000
Goat Butter $21, 600 $45, 000 $45, 000
Vegetables $15, 000 $20, 000 $20, 000
Chicken and Goat $ 0 $ 0 $20, 000
Total Sales $107, 800 $230, 000 $350, 000
Direct Cost Sales

Grain & Seed $9,600 $14,400 $14,832


Labor (Associated with Preparing Product) $24,000 $75,000 $77,250
Subtotal Direct Cost of Sales $33,600 $89,400 $92,082

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Chart: Sales by Year

5.5 Milestones

By obtaining the $595,000 in requested funds, Immanuel Farms will be able to open and
establish an organic farming operation in an area that currently does not provide organic
products. The company will have to initially purchase the land and building, fencing, machinery
& equipment and acquire the necessary inventory to start the business. Once the company has
established a customer base within the local market area, Immanuel Farms will expand to
increase sales utilizing various other venues to sell their products.

Table: Milestones
Milestones

Milestone Start Date End Date Budget Department

Advertising 1/1/2011 12/31/2013 $5,000 Owner

Fencing 1/1/2011 1/31/2011 $15,000 Owner

Salaries 1/1/2011 12/31/2013 $75,000 Owner

Machinery and Equipment 1/1/2011 1/31/2011 $115,000 Owner

Inventory and Grain & Seed 1/1/2011 1/31/2011 $10,000 Owner

Land and Buildings 1/1/2011 3/31/2011 $375,000 Owner

Totals $595,000

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The company sells and are accounted for as Cost of Sales expenses. Mwendalubi is the principal
owner/operator of the company and does not expect to draw a salary from the operations.

Chart: Milestones

Table: Personnel

Personnel Plan

Year 1 Year 2 Year 3

Farming Labor $0 $0 $0

Owner $0 $0 $0

Total People 1 3 3

Total Payroll $0 $0 $0

7.0 Financial Plan

The financial plan for Immanuel Farms is to obtain funding of $595,000 and utilize these funds
to open and establish an organic farming operation. The business will depend on obtaining the
requested funding to make the farm successful. Upon receiving the requested funds, after the
start-up expenses, Immanuel Farms will immediately purchase the land, building, fencing,
machinery & equipment and the inventory of animals and seeds necessary to begin operations.

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Because the farming business is subject to a growth and maturity period, a sufficient cash reserve
will be maintained from the requested funds by Immanuel Farms to sustain the business until the
company is able to harvest sellable product. As illustrated in the cash flow tables that follow,
once the company is able to begin generating revenues from the organic products that Immanuel
Farms offers, there will be an adequate cash flow to sustain the operations and become a
successful business.

7.1 Start-up Funding

The start-up costs for Immanuel Farms consists of $5,000 for legal fees, labor, office equipment
& supplies and grain & seed. The investment for these start-up costs is expected to be acquired
from the funds requested in this business plan. Additionally, $515,000 of the acquired funding
will be utilized immediately to purchase the land, building, machinery & equipment, fencing and
the inventory of animals required to start the farm.

Table: Start-up Funding


Start-up Funding

Start-up Expenses to Fund $5,000

Start-up Assets to Fund $0

Total Funding Required $5,000

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $0

Additional Cash Raised $0

Cash Balance on Starting Date $0

Total Assets $0

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $0

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Capital

Planned Investment

Owner $0

Investor $0

Additional Investment Requirement $5,000

Total Planned Investment $5,000

Loss at Start-up (Start-up Expenses) ($5,000)

Total Capital $0

Total Capital and Liabilities $0

Total Funding $5,000

7.2 Break-even Analysis

The break-even analysis for Immanuel Farms is summarized by the following table and chart.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $8,208

Assumptions:

Average Percent Variable Cost 31%

Estimated Monthly Fixed Cost $5,650

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Chart: Break-even Analysis

7.3 Projected Profit and Loss

Immanuel Farms is a start-up farming operation. During the Year 1 start-up phase, Immanuel
Farms will require a period of time to raise and cultivate the products the company intends to
market for sale. Vegetables will require time to grow after they are planted before they can be
harvested. The chickens are not able to produce eggs until they become mature in six months
after they are purchased. Then, they only produce eggs for two years before they are slaughtered,
sold and replaced with a fresh generation of chickens. Goats cannot produce sufficient milk to
sell and make cheese and butter until they are at least four months old.

The projected Profit and Loss Table for Immanuel Farms reflects the company operating at full
capacity during Year 2 and Year 3. The company expects to have an established customer base
which will permit Immanuel Farms the opportunity to expand the business by including various
other venues to market their products including but not limited to obtaining shelf space at small
local grocery businesses within the target market area and expanding the product line to include
ducks and geese

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Table: Profit and Loss
Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $107,800 $230,000 $250,000

Direct Cost of Sales $33,600 $89,400 $92,082

Other Costs of Sales $0 $0 $0

Total Cost of Sales $33,600 $89,400 $92,082

Gross Margin $74,200 $140,600 $157,918

Gross Margin % 68.83% 61.13% 63.17%

Expenses

Marketing/Promotion $5,500 $3,600 $3,700

Depreciation $24,000 $24,000 $24,000

Truck Expense $15,000 $15,450 $15,914

Utilities $3,900 $4,017 $4,138

Insurance $3,000 $3,090 $3,183

Travel $15,000 $15,450 $15,914

Other $1,400 $1,942 $2,000

Total Operating Expenses $67,800 $67,549 $68,847

Profit Before Interest and Taxes $6,400 $73,051 $89,071

EBITDA $30,400 $97,051 $113,071

Interest Expense $0 $0 $0

Taxes Incurred $832 $9,497 $11,579

Net Profit $5,568 $63,554 $77,491

Net Profit/Sales 5.17% 27.63% 31.00%

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Chart: Profit Monthly

Chart: Profit Yearly

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Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

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7.4 Projected Cash Flow

Immanuel Farms is expected to retain an initial cash balance of $75,000 from the requested
funding. Because Immanuel Farms is a start-up farming operation, the available cash will permit
the company to maintain operations during the initial start-up period while the company must
wait for sufficient product to become available for sale. The monthly cash flow projections in the
appendix illustrate that the business is able to generate sufficient cash flow to support operations
after the animals are mature enough to yield sufficient organic products for Immanuel Farms to
sell to customers

Table: Cash Flow


Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $107,800 $230,000 $250,000

Subtotal Cash from Operations $107,800 $230,000 $250,000

Additional Cash Received

Non-Operating (Other) Income $0 $0 $0

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

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

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 $595,000

Subtotal Cash Received $702,800 $230,000 $250,000

Expenditures

Expenditures from Operations

Cash Spending $0 $0 $0

Bill Payments $77,855 $159,486 $135,635

Subtotal Spent on Operations $77,855 $159,486 $135,635

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Additional Cash Spent

Non-Operating (Other) Expense $0 $0 $0

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $505,000

Dividends

Subtotal Cash Spent $582,855 $159,486 $135,635

Net Cash Flow $119,945 $70,514 $114,365

Cash Balance $119,945 $190,459 $304,824

Chart: Cash

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7.5 Projected Balance Sheet

The following table presents the balance sheet for Immanuel Farms. The balance sheet reflects
healthy growth of net worth and a strong financial position. The monthly estimates are included
in the appendix.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash $119,945 $190,459 $304,824

Inventory $2,800 $23,362 $9,315

Other Current Assets - - -

Total Current Assets $122,745 $213,821 $314,140

Long-term Assets

Long-term Assets $505,000 $505,000 $505,000

Accumulated Depreciation $24,000 $48,000 $72,000

Total Long-term Assets $481,000 $457,000 $433,000

Total Assets $603,745 $670,821 $747,140

Liabilities and Capital

Current Liabilities

Accounts Payable $3,177 $6,699 $5,526

Current Borrowing - - -

Other Current Liabilities - - -

Subtotal Current Liabilities $3,177 $6,699 $5,526

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Long-term Liabilities - - -

Total Liabilities $3,177 $6,699 $5,526

Paid-in Capital $600,000 $600,000 $600,000

Retained Earnings ($5,000) $568 $64,122

Earnings $5,568 $63,554 $77,491

Total Capital $600,568 $664,122 $741,614

Total Liabilities and Capital $603,745 $670,821 $747,140

Net Worth $600,568 $664,122 $741,614

7.6 Business Ratios

The ratios analysis table for Immanuel Farms is shown below. These ratios were taken from
North American Industry Classification System (NAICS) code 112310 (Chicken Egg
Production). This industry is comprised of establishments primarily engaged in raising chickens
for egg production. The eggs produced may be for use as table eggs or hatching eggs. Many of
the ratios used for this comparison may vary significantly from the industry profile because
Immanuel Farms is a start-up business and has not established a history and the company is
engaged in various operations other than just egg production.

Table: Ratios
Ratio Analysis year 1 year 2 year 3 industry profile

Sales Growth n.a 113.36% 8.70% -0.65%

Percent of Total Assets

Inventory 0.46% 3.48% 1.25% 5.51%

Other Current Assets 0.00% 0.00% 0.00% 38.63%

Total Current Assets 20.33% 31.87% 42.05% 47.47%

Long-term Assets 79.67% 68.13% 57.95% 52.53%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 0.53% 1.00% 0.74% 19.01%

Long-term Liabilities 0.00% 0.00% 0.00% 79.98%

Total Liabilities 0.53% 1.00% 0.74% 98.99%

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Net Worth 99.47% 99.00% 99.26% 1.01%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 68.83% 61.13% 63.17% 71.78%

Selling, General & Administrative 63.67% 33.50% 32.17% 12.72%

Expenses

Advertising Expenses 5.10% 1.57% 1.48% 0.36%

Profit before Interest and Taxes 5.94% 31.76% 35.63% 5.06%

Main Ratios

Current 38.64 31.92 56.85 1.46

Quick 37.76 28.43 55.16 1.17

Total Debt to Total Assets 0.53% 1.00% 0.74% 98.99%

Pre-tax Return on Net Worth 1.07% 11.00% 12.01% 936.60%

Pre-tax Return on Assets 1.06% 10.89% 11.92% 9.43%

Additional Ratios

Net Profit Margin 5.17% 27.63% 31.00% n.a

Return on Equity 0.93% 9.57% 10.45% n.a

Activity Ratios

Inventory Turnover 10.18 6.8 35.64 -

Accounts Payable Turnover 25.51 24.33 24.33 -

Payment Days 13 11 17 -

Total Asset Turnover 0.18 0.34 0.33 -

Debt Ratios

Debt to Net Worth 0.01 0.01 0.01 -

Current Liab. to Liab. 1.00 1.00 1.00 -

Liquidity Ratios

Net Working Capital $119,568 $207,122 $308,614 -

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