References
Our business plan refers to the elements of this document to show how figures are being calculated.
Example: Profit and Loss Forecast refers to Gross Profit
Those to whom terminology is not familiar may also view the following online dictionaries:
~ Merriam-webster.com
This business plan also gives links to other online sites so that the reader is able to compare
figures to those in similar industry. It must be noted that those links constantly change.
The content at those sites is based on the content providers and channels used.
We don't take any responsibility for the figures seen on other sites.
Read our legal notice!
See the following web sites:
spacedaily.com
uavworld.com
israelnewsagency.com
sinodefence.com
defense-aerospace.com
flightinternational.com
airforce-technology.com
isr.dnmediagroup.com
sdchamber.org
mil.no
army-technology.com
washtimes.com
paktribune.com
For news worldwide see our links to online content: Newspapers.
[000] Financial Dictionary
Gross Income
investopedia.com/terms
~ A company's revenue minus cost of goods sold. Also called "gross margin" and "gross profit".
~ This is an important number when analyzing a company, it indicates how efficiently management uses labor and supplies in the production process
~ four product lines consisting of Unmanned Aerial Vehicles ("UAV Systems"),
~ Net sales from continuing operations for the three months ended March 31,
~ 2005 increased 31.7% to $107.5 million compared to $81.6 million for the three months ended March 31, 2004.
~ The gross margin percentage for continuing operations increased to 24.2% in the first quarter of 2005
~ from 21.4% during the same period in 2004.
~ Net sales for the Defense segment in the first quarter of 2005 increased 33.9% to $100.2 million
~ compared to $74.8 million for the first quarter of 2004.
~ This increase was primarily due to higher production and support in UAV Systems and higher sales in Services mainly due to the Biological Detection System program awarded in the third quarter of 2004.
~ Selling and administrative expenses in the Defense segment increased to $11.4 million, or 11.3% of sales
~ The Company received $95.8 million of new orders and/or funding for products and services during the first quarter of 2005, an increase of $20.3 million, or 26.9%, compared to the first quarter of 2004.
~ During the first quarter of 2005, the Company's UAV Systems was awarded $22.7 million of additional contracts
~ for ongoing logistical support for TUAV systems deployed worldwide as well as
~ an award for $2.5 million to completely refurbish Shadow TUAV equipment
~ that has been deployed in Operation Iraqi Freedom.
~ UAV Systems also received a $14.4 million award for an additional Shadow TUAV system
~ to be produced in conjunction with the eight Shadow TUAV systems ordered in December 2004.
~ Including these awards, funded backlog for UAV Systems at March 31, 2005 was approximately $220.2 million.
~ Test and Training Systems had a funded backlog of $39.1 million at March 31, 2005, primarily related to its Joint Service Electronic Combat Systems Tester program
~ On April 4, 2005, the Company acquired ESL Defence Limited ("ESL"), an electronic warfare ("EW") systems company based in the United Kingdom
Cash Sales
Cash sales are estimated to be 2/3 of total sales.
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Credit Sales
Credit sales are estimated to be zero(0) of total sales.
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Total Sales
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Variable cost
Variable costs are estimated to be 50% of sales.
Variable Cost - A cost that is directly proportional to the volume of output produced.
When production is zero, the variable cost is equal to zero
variable cost definition
COST-VOLUME-PROFIT RELATIONSHIPS
~ The general case is costs and revenues – cost and revenue drivers – profit analysis.
~ The general case has many revenue and many cost drivers.
~ CVP is a special case where there is a single revenue driver (output units) and a single cost driver (output units).
~ Examples of cost drivers OTHER than units of output (either manufactured or sold) are:
Research and development Personnel hours on a research project
Design Number of parts per product
Production Number of setups
Marketing Number of sales visits made
Distribution Number of packages shipped
Customer Service Number of products recalled
Performance indicators for manufacturing
~ Variable manufacturing expense ratio: Variable manufacturing costs / Net sales,
~ Reflects variable manufacturing costs as a percentage of net sales
Example 3
~ Variable costing: includes only variable manufacturing costs --- direct materials, direct labor, and variable manufacturing overhead.
~ The entire amount of fixed costs are expenses in the year incurred.
~ When calculating Contribution Margin, Variable Cost of Goods Sold and Variable Selling and Administrative Expenses
~ and subtracted from Sales.
Example 4 this looks good!
~ variable cost 62% of sales, 51% in one hardware company....
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Gross Profit
Gross profit is calculated as follows:
Sales minus the cost of goods sold
Example 1
~ Gross profit as a percentage of net sales decreased to 26.9% in 1998 from 30.5% in 1997.
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Other Income
Other Income is estimated to be 25% of total sales and come from the following services:
research
develoment
design
system engineering; modelling,specifying,designing,programming
specification with clients
licensing
royalties
technical support
training
consulting
service
maintenance
selling of partner's products
developing standards
testing
prototyping
processing,filtering,analyses of target area sensor data
Note: the real value of Xi,Base4Xi and Sensor4Xi are the data and information they provide!
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Total Income
Total Income is calculated as follows:
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Overheads
Overheads is calculated as follows:
83 % of total income.
This leaves 17% as profit percent.
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Profit/Loss
Operating profit % of net sales is estimated to be 17,0%.
Compare:
~ Nokia 14,8% in 2004
~ In general good profit % of net sales seems to vary between 15 - 25 %
~ In defense sector sometimes near 30%
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Emloeyee's wages
~ Emloeyee's wages are expected to be 5% of total sales.
~ compare to Nokia; wages and salaries 9,58% of net sales in 2004
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Empoyeers' National Insurance
~ Empoyeers' National Insurance is calculated to be 9,0% of emloeyee's wages
~ compare to Nokia; pension expenses 0.86% of net sales, 9,02% of wages and salaries,year 2004
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Training of staff
Training of staff are calculated to be 1/24 = 4% of emloeyee's wages
This equals two weeks training per person during one year.
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Rent (rented premises)
Strategy is not to rent premises but own them as assets.
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Rates and water rates
Strategy is to negotiate free rates.
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Fuel (gas,petrol,electricity etc)
Fuel and electricity expenses are calculated to be 5% of total sales.
Testing of Xi helicopter requires fuel; longer periods of testing is required.
Part of fuel is estimated to be provided by partners such as oil companies and oil producers.
Clients such as military test themselves.
Production requires electricity.
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Telephone
Telephone cost are estimated to be 3% of total sales.
Testing of Xi helicopters and Base4Xis required telecommunication.
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Postage
Due to electronic transfer and handling of content and programs postage costs are practically zero.
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Printing and stationery
Due to electronic process and handling of printing and stationery costs are practically zero.
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Subsdcriptions and periodicals
Due to internet and digital channels and digital content subsdcriptions and periodicals cost are practically zero.
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Advertising and promotions
Advertising and promotions are estimated to be 5% of total sales.
Demonstrations are expensive requiring other aerial vehicles such as fighters and manned helicopters.
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Repairs and maintenance
Repairs and maintenance are estimated to be 5% of total sales.
Main costs are factory automation and development tools such as computer hardware and software.
Instead, devices to be manufactured and sold are expected to generate profit not cost:
Sensor4Xis may damage when dropped or stop working.
Xi helicopter is capable to deliver new sensors which means more sensor sales.
Xi helicopter is rapidly deployable and droppable and designed to operate in risky environment.
Maintenance of Xi helicopter is done either at Base4Xi or at the client's base such as carrier.
Base4Xi can handle several Xi helicopters, each extra Xi helicopter generates profit.
Base4Xi may require service and maintenance.However, in most cases they are dropped to remote
and dangerous places with back-up Base4Xi, which generates profit.
Xi helicopter, Base4Xi and Sensor4Xis are designed to operate autonomously.
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Insurances
Insurance costs are estimated to be 5% of total sales.
Testing of Xi helicopter is risky and requires safe and remote environment.
Clients are expected to arrange insurance for pilot tests.
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Professional fees
Professional fees are estimated to be 1% of total sales.
Autonomous and unmanned systems may require new legislation.
This is specially true with business and patrol series.
Military has so far used UAVs in enemy areas.
However, this might change. In Iraq fighting against terrorist may require
to use UAVs such as Xis in areas where there is other aerial vehicle traffic
and over civil buildings and facilities.
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Interest payments
Interest payments are estimated to be 7% of total sales.
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Bank charges
Bank charges are estimated to be 3% of total sales.
Company strategy is to sell using main currencies such as USD and sterling
and local currencies such as dirham in arab countries.
Euro currency is to be avoided, if possible.
Strategy to use several currencies causes more bank charges but reduces
currency risks.
Vehicles and travel costs
Vehicles and travel costs are estimated to be 5% of total sales.
Fighters and helicopters are needed to drop Xi helicopters.
Older air vehicles can be used to minimize cost during initial tests.
Clients are expected to perform their own tests and to pay them.
Helicopters are needed to drop Base4Xi with SOF troops.
Older manned helicopters can be used to minimize cost during initial tests.
Clients are expected to perform their own tests and to pay them.
Special vehicles are needed to test maintenance and support of Base4Xi bases
and to test fetching them from target area.
Clients are expected to perform their own tests and to pay them.
Simulators and models are needed to test Xis and Bases4Xi in laboratories.
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Depreciation - vehicles
Depreciation - vehicles is estimated to be 2% of total sales.
Vehicles to be used for own internal tests of Xi,Base4Xi and Sensor4Xi do not need to be the latest models.
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Depreciation - other
Depreciation - other is estimated to be 9% of total sales.
Factories producing Xi helicopters and Base4Xi bases are highly automated.
Automation machinery is expected to depreciate in three to seven years.
Development of new models and testing them can not automated as well.
Computer software and hardware depreciate in one to three years.
Other expenses
Other expenses are estimated to be 1% of total sales.
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TOTAL OVERHEADS
Total overheads are estimated to be 57,3% of total sales.
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Venture capital
See the venture capital estimations with the following series as the first one to start with:
Military
Patrol
Business
In all above scenarios core revenue comes from Base4Xi and Xi helicopters.
Return of investment can be high with the following smaller products:
(1) $$$ 70:1
Sensor4Xis can be given to partners to be manufactured and developed.
In that case revenue would come from the core devices and
and from services such as data mining and processing of sensor data.
(2) $$$ 210:1
Mobile Freedom devices complement the core platform helicopter,base and sensors, but
they can be sold separately for mobile solutions. Licensing is also one option.
Risk are high; hydrogen H2 based products are new.
On the other hand demand for new kind of power solutions has grown rapidly in mobile markets
with over 1 billion mobile phone users and growing number of laptop owners!
Stakes are high in the mobile phone markets!
Private investments
Private investments with the following series as the first one to start with:
Military
Patrol
Business
In all scenarios core revenue comes from Base4Xi and Xi helicopters and they create the critical platform.
Sensor4Xis can be given to partners to be manufactured and developed.
In that case revenue would come from the core devices and
and from services such as data mining and processing of sensor data.
Other freedom devices complement the core platform.
They can be sold separately for mobile solutions. Licensing is also one option.
Owner's investment
Private investments with the following series as the first one to start with:
Military
Patrol
Business
In all scenarios core revenue comes from Base4Xi and Xi helicopters and they create the critical platform.
Sensor4Xis can be given to partners to be manufactured and developed.
In that case revenue would come from the core devices and
and from services such as data mining and processing of sensor data.
Other freedom devices complement the core platform.
They can be sold separately for mobile solutions. Licensing is also one option.
Loans
Loans are calculated as follows:
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Cash sales
Cash sales are calculated as follows:
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Credit sales
Credit sales are calculated as follows:
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Asset disposals
Asset disposals are calculated as follows:
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Interest received
Interest received are calculated as follows:
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TOTAL RECEIPTS (R)
TOTAL RECEIPTS (R) is calculated as follows:
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PAYMENTS
PAYMENTS are calculated as follows:
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Premium on lease
Premium on lease is calculated as follows:
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Purchase of property
Purchase of property is calculated as follows:
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Purchase of plant,furniture and fittings
Purchase of plant,furniture and fittings is calculated as follows:
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Purchase of vehicles
Purchase of vehicles is calculated as follows:
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Raw materials
Raw materials is calculated as follows:
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Goods for sale
Goods for sale is calculated as follows:
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Employees' net wages
Employees' net wages are calculated as follows:
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Income tax and NI
Income tax and NI is calculated as follows:
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Training expenses
Training expenses are calculated as follows:
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Rent(rented premises)
Rent(rented premises) is calculated as follows:
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Rates and water rates
Rates and water rates are calculated as follows:
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Fuel(gas,electricity etc)
Fuel(gas,electricity etc) is calculated as follows:
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Telephone
Telephone is calculated as follows:
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Postage
Postage is calculated as follows:
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Printing and stationery
Printing and stationery is calculated as follows:
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Subscriptions and periodicals
Subscriptions and periodicals is calculated as follows:
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Advertising and promotions
Advertising and promotions is calculated as follows:
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Repairs and maintenance
Repairs and maintenance is calculated as follows:
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Vehicles and travel costs
Vehicles and travel costs are calculated as follows:
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Insurances
Insurances is calculated as follows:
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Professional fees
Professional fees is calculated as follows:
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Loans repayments
Loans repayments is calculated as follows:
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Bank charges
Bank charges is calculated as follows:
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Bank interest
Bank interest is calculated as follows:
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Value Added Tax
Value added Tax is calculated as follows:
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Other expenses
Other expenses are calculated as follows:
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TOTAL PAYMENTS (P)
Total payments (P) are calculated as follows:
70% of TOTAL RECEIPTS (R) years 1-4; production partly automated
This will leave 30% of which 15% is the net profit
50% of TOTAL RECEIPTS (R) years 5-8; production fully automated
This will leave 50% of which 20% is the net profit
30% of TOTAL RECEIPTS (R) years 9-12; mass production of all series
This will leave 70% of which 30% is the net profit
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RECEIPTS LESS PAYMENTS
Receipts less payments for the month,example, will yield the net income
for the month (M=R-P).
If you add the opening balance,this will indicate how much cash is left in the
company at the month's end(C= B + M).
This figure C for the month x becomes the opening balance for Month x+1
and the process is repeated.
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CASH REMAINING IN THE BUSINESS (C)
Cash remaining in the business is calculated as follows:
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Capital Item
Capital items are:
buildings
vehicles
testing sites
fixed wing aerial vehicles for test
rotary wing aerial vehicles for test
simulators
wind tunnel
test tools
industrial robots
assembly lines
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Initial cost
Initial cost, millions of USD dollar.Purchasing currency can be different such as sterling,dirham.
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Anticipated purchase date
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Method of payment
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Completion of loan or end of lease
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Small & Smart Inc reserves rights to change this document without any notice
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