FINANCE&ACCOUNTING
In here you will find everything related to the financial status of the company. From start-up cost and investments to the balance sheet and the profits & losses general statment . We analized two basic scenarios, a pesimistic and a optimistic one.
To come up with this information we started from by the sales data of universitarian and professional books since 2008 and the income produced by this sales. We projected this information onto 2018 using the method of least squares. From the previous data we were able to forecast the growth in the industry and stablish an average price for the books sold.
Bogotá represents around 70% of the market and e-books account for 24% of the sales.
Editorial houses usually give a 30% discount to distributers and this will be our profit margin.
By not spending all of the 10.000.000 million pesos in initial investment we have work capital which will give us the liquidity to pay our suppliers whenever we receive an order and to maintain the company operative for some months in pessimistic scenarios.
We are planning on giving a 2% Comission for sales over the difference in profit between the pessimistic and the optimistic scenario
According to our survey, only 20% of our objective market uses credit cards, the other 80% uses debit cards
We took into account a 0,5% charged by online payment platforms for debit card transactions and 2% for credit card transactions
Usually, Banks deliver payments after 48hours so the sales of our last 5 days(6%) of each month will appear as Accounts receivable. 72
*All facts taken from Camara Colombiana del Libro. 71
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Start-up and investment
Shows all the investments made to get the company up and running. Those expenses include all the legal procedures incurred in the registration of the company, the stablishment of the platform and some basic office equipment.
Optimistic scenario
In this scenario we proposed the best possible situation for our company. We managed to consolidate sales since the first month of operations and dominate 0,5% of the market. We also projected growth according to the industry's growth.
BalanceSheet
Profits & Losses
The balance sheet is basically picture of three main things:
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What the company has or what is owed to the company(\(\(Assets)
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What the company owes(Liabilities)
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Shareholders' investment into the company(\(\(Equity)
In this specific case we can see small losses in the first month, followed by sustained earnings. Looking at the row of 'Cash and Equivalents' we can notice that higher sales will give the company more available cash(as compared to a pessimistic scenario) in order to perform it's operations.
The P&L shows the operations of a company in a specific period of time. In simple terms, it shows what entered and left the company in terms of money.
In this specific case we can see that the company has a return of around 13%/year which is relatively low and this will make the competition more intense and the environment more uncertain.
Pessimistic Scenario
In here we proposed a rough start for the company with two months of no sales, domination of only 0,2% of the market and growth under the average of the industry.
BalanceSheet
As compared to the optimistic scenario there is much less available cash in order to perform operations. Thanks to not spending all of the money in initial investments we are able to survive a pessimistic scenario and still have cash to keep the company running.
Profits & Losses
In this scenario we experienced a scenario of two months without any income and we also controlled less percentage of the market. We can conclude that this is a market in which quantity or sales mean a lot. With small profit margins, we need to focus in expanding our marketshare in order to increase the net profit.