Foursight- Business Plan (1) (1)

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Foursight

Foursight’s Executive Team

Executive Team from left to right: Jake Brown- COO, Miguel Quintero- CIO, Teri Bunn- CEO, Christopher Estrada- CMO, Eugenie Chung- CBDB, Jonah Chung- CFO

- Teri Bunn, our CEO, has a few years of professional experience in the Managerial Industry. She has worked on

multiple school projects other than the IBSCS Competition such as the Diversity in Leadership Conference held at

CSULB in 2015 and the Boeing Case Study Competition. Currently, she is an MBA candidate with an emphasis in Project Management and Strategy using her expertise to help manage company affairs.

- Jake Brown, our COO, our Chief Operations Officer, brings 3 years of management experience, in which he

was in charge of hiring, scheduling, and inventory management for a small business to the team. He is

currently pursing a bachelor’s degree in business management and bachelor’s degree in supply chain and

operations management. Jake’s real world experience and problem solving skills will help the team compete

at a high level.

- Miguel Quintero, our CIO, has organizational experience in working in data-driven environments. He is

graduating with a bachelor's degree in international business, which included a research component. His

education and a minor background in accounting and rhetoric helps him fulfill his role in the company.

- Christopher Estrada, our CMO, is graduating with a bachelor’s of science in Business Administration

with an emphasis in Marketing. He is currently developing statistical and analytical skills to utilize Big

Data. He has worked with several CSULB student run marketing teams as a Director of Marketing and

creative art.

- Eugenie Chung, our COO, has been a working professional for the last 9 years, and a business owner and

operator for the last three. Her experiences founding a successful business, along with the educational

backing stemming from her undergraduate studies in Business Management and Psychology at CSULB,

enable her to successfully serve as Chief Business Development Officer.

- Jonah Chung, our CFO, is obtaining a BS degree in Finance and is aspiring to work in as a financial analyst in the

business industry. He volunteers primarily on campus with the integration of incoming freshman through the CSULB SOAR program and has also participated in the Boeing Case Study Competition alongside our CEO.

Contents Contents...............................................................................................................................................................2

Executive Summary ..............................................................................................................................................3

Our Vision .......................................................................................................................................................4

Our Mission .....................................................................................................................................................4

Situational Description and Its Analysis .................................................................................................................4

External Market Analysis ..................................................................................................................................4

Internal Market Analysis ...................................................................................................................................5

Swot Analysis ......................................................................................................................................................7

Objectives and Goals ............................................................................................................................................8

Strategies and Tactics ...........................................................................................................................................9

Funds Required and Their Use............................................................................................................................. 11

Appendix A........................................................................................................................................................ 12

Summary of Key Financial Data ...................................................................................................................... 12

Appendix B ........................................................................................................................................................ 13

Consolidated Pro Forma Income Statement (000s) ............................................................................................ 13

Appendix B (con.)............................................................................................................................................ 14

Consolidated Pro Forma Income Statement (000s) Continued ............................................................................ 14

Appendix C ........................................................................................................................................................ 15

Pro Forma Cash Flow Sheet (000s) .................................................................................................................. 15

Appendix C (con.)............................................................................................................................................ 16

Pro Forma Cash Flow Sheet (000s) (con.)......................................................................................................... 16

Appendix D........................................................................................................................................................ 17

Pro Forma Balance Sheet (000s) ...................................................................................................................... 17

Appendix E ........................................................................................................................................................ 18

Sales Forecast ................................................................................................................................................. 18

Appendix F ........................................................................................................................................................ 19

GAR – Goals Attainment Report...................................................................................................................... 19

Executive Summary

Foursight is a prominent manufacturer of high-quality and multi-feature pens that provide

our customers with reliable writing utensil alternatives. Our company defines itself by being at the

forefront of writing utensils, offering solutions to those that want the most out of their personal and

professional lifestyles. This summary will provide details to our company’s internal and external

market conditions that Foursight faces, of which the company has used to create our goals and

strategies. Our financial and forecasting plans, will outline how our company expects to reach our

desired optimal strategic industry position and generate shareholder value through the end of our

company’s seventh year.

The high-quality pen industry is highly competitive among the top six companies – in which

Foursight is fighting for the top position in market share. Foursight’s headquarters are located in

Southern California with our primary manufacturing location in the Merica 3 region. As of the end

of year 3, we also have manufacturing locations in the Pandau region and can still expand our

manufacturing and sale venues as needed in both countries. Foursight is proud to be a global

company and the economy in Merica has proven to be a stable and steady growth for us since our

company’s inception. Having two separate and independent markets means that Foursight will

continue to observe sales and expand production areas to create a diversified production footprint

that will permit the company to plan for contingencies by having high production levels in multiple

locations.

Foursight’s objective is to offer a high quality product. We have set our sights in proving that

the market will respond to quality and therefore have a goal of 23% market share by the end of year

7. We have also dedicated ourselves as a management team to increasing earnings per share and

return on investment by 10% annually starting year 5.To do this, the company will utilize the

strategies discussed in this document.

Foursight will meet our customers’ wants and desires for their writing references by offering

a high quality product with the most up to date technology and features. In order to achieve this, the

company has committed itself to investment in research and development and staff training and

delivering that a quarterly investment of $200k in R&D and $100k in training will meet our

company’s expectations of providing the best product at a reduced cost. We will increase our

advertising by at least 20% to optimize our forecasted sales. Foursight is committed to making sure

every customer has access to our product and so a buffer stock of 10 - 20% or more will be put in

place. To obtain our lower costs goals, we are expanding our overseas manufacturing into Pandau in

order to optimize the lower production costs. We currently anticipate that we will be able to finance

our future investments and working capital through our current internal operations. For the next 4

years, Foursight will relate more value for shareholders by increasing ROI by 8% annually through

year 7. To reach this goal, we will raise the net income by at least 8% annually and start paying

dividends from the end of year 4.

Our Vision

Our vision is to provide contemporary industry professionals with a writing tool that will fulfill their wants and needs at the right price. We produce our products and deliver them in a safe, reliable, efficient, and environmentally sound manner that makes our employees and customers proud to be a part of the

Foursight vision. Over the next four years, we are striving to become a performance leader in the industry and provide the best quality product for our customers at a reliable and affordable price.

Our Mission

At Foursight, our mission is to produce quality pens and bring them to the contemporary individual, at competitive prices, in order to gain market share. We support our mission by investing in the training of

our employees. In turn, the investment will lead to a cost reduction in the manufacturing of our product. Thus, we aim to benefit our stakeholders by adding value to their investment, as we increase our profit margin.

Situational Description and Its Analysis

External Market Analysis Macro Environment

Foursight is operating domestically in Merica and internationally in Pandau at the end of our 3rd

year. We are headquartered in Merica 3 in the city of Long Beach, California, from which we distribute our products to additional sales venues in Merica and overseas to Pandau. We are constructing a new plant in Pandau to increase production.

Economic characteristics of Merica and Pandau.

The GDP of Merica dipped nearly 4 points this year from 100 to 99.03 in our first Quarter and ended the year at 96.61. The GDP is forecast to increase substantially in the next 4 quarters. Pandau’s GDP has been relatively stable, dropping to 99.91 in quarter 1, peaking at 102.72 in quarter 2, and ending at 100.08

for the year. Pandau’s GDP is forecast to drop to 96.25 and stay near that level throughout the next year. Global demographics of country environments

Merica has a diverse population with a low growth rate, 25% of which is through immigration. Their standard of living affords them to purchase quality products. The workforce is highly skilled and mobile. A

quarter of its population has a college education. Pandau’s large population is at an annual growth rate of 2.3% with some of the most densely populated areas in the world. Over 50% of Pandau citizens are under the age of 20. They have a relatively high standard of living.

Legal and regulatory

There is a 39% percent tax on corporate income in Merica. It has no value added tax or a capital tax

on corporations. There are also import and export taxes, payroll taxes, principally social security, state and local taxes, and taxes on real property. Pandau offers several benefits and tax breaks to exporters in the

country. General tax on corporate income is 39%. Other taxes in Pandau are payroll taxes, principally social security, local taxes, taxes on salaries, and taxes on real property.

Business Environment

1. Target Market. Foursight aims to be the best provider by offering high quality products at a reduced cost. Therefore our target market is a large demographic ranging from lower-middle class to upper

class and age range from 13-60 that primarily reside in urban and suburban areas.

2. Market Size. The market size for Foursight is very large. More than 75% of the population use pens

and the demand for pens is very consistent as the need for pens does not fluctuate. There is a large demand for everyday pens and there is also a demand for high quality pens as well. Foursight will be

able to make an impact on the industry by not only producing high quality fancy pens for upper class citizen but also mass produce everyday pens that are more durable, last longer, and cost less than other regular pens.

3. Competitors. The current business environment is very tight and there are a lot of opportunities to

fill a niche. Currently, LIONS VENTURE, LLC and Hydrate are our competitors for production capacity. LIONS VENTURE, LLC recently ramped up production by opening a 8 line plant in

Pandau and Hydrate also opened a 4 line plant in Pandau. LIONS VENTURE, LLC and Hydrate both seem to be filling a low cost provider, which would explain their decisions to increase capacity. InPremier and Sol Capture recently released high quality high cost products, which indicates they

are aiming for a upper-middle class and upper class demographic. While our competitors have been successful in their individual areas we are confident that we can succeed by providing the high

quality products that InPremier and Sol Capture provide while selling them at prices that LIONS VENTURE, LLC and Hydrates demographic can also afford. Foursight’s best provider strategy aims to achieve success in both of these markets.

Internal Market Analysis Marketing

Foursight offers pens of great quality at attractive prices. Marketshare in year 3 was 17.19%, ending at 14.5%, and peaking at 19.7% in quarter 3. Our goal was to maximize our market share in the first 3 quarters before shifting into higher quality positioning in the 4th quarter with a bigger focus on profitability.

Finance

Our cash balance at the end of year 3 was $1.9 million and we have managed our cash reserves up to

expectations throughout the previous 4 quarters to meet the overseas operation expansion. We have

capitalized on the capacity expansion in Merica which allows us to catch up with the surge in market

demand over the last two quarters of year 3.

With a net income of $306K in year 3, we achieved a net profit margin x.xx% and ROE of x.xx%.

These results are very encouraging given the fact that we have heavily invested in plant expansion and

innovation in year 3.

At the end of year 3, our debt-to-equity ratio remained stable at xx.xx% and interest coverage stood

at xx.xx, (place) highest in the industry. Our credit rating of x was maintained and Altman Z score improved

from x.xx to x.xx at the end of year 3. We ended the year with EPS of x.xxx and stock price standing at

x.xx, an increase of xx% compared with last year.

Production / Operations

In order to meet the overall business objectives and goals, we have established the following operational

goals:

Have no product stock outs in any quarter

Reduce product cost by 20% by year 5

Keep safety stock within 10-20% in all areas

Steadily invest in R&D and increase by 1-4 thousand each quarter

Following our business plan, we have increased our investment in training costs over the first 4 quarters. We

started in year 3 quarter 1 with $68,000 in training and by year 3 quarter 4 we had increased training to

$97,000. This increase of $29,000 shows our dedication to lowering costs. Similar to training we also

increased our investment in R&D in year 3. We started in year 3 with $75,000 in R&D and by the end of

year 3 we had increased R&D to $98,000. This increase of $23,000 is consistent with our strategy of being

able to have access to new models. Our production can adequately produce for our demand. We opened two

new lines in year 3 quarter 2 and started production for a four-line plant in Pandua in response to our

forecast that our demand will increase in year four. Overall we have adequate production capacity, and

increased investment in both training and R&D all of which support our strategic plan.

Personnel

At Foursight we believe that our employees are vital parts of our success and expansion in our

market. Our employees starting pay and commissions have increased during year three and will continue to

see both salary and commission rises in the future. Between our starting salary and sales commission, our

sales personnel average 7,200 units of sales, which are some of the highest numbers in our market. Striving

to have the most efficient employees we have also increased training by $29,000 over four quarters and this

number is expected to continually grow in the future. We believe in compensating our workers for the work

they do and we strive to continually be investing in training in order to keep our workers up to date with the

latest innovations.

Organization and General Management

Our operational goals are reducing costs, steady investments in R&D, matching production output

closely with forecasted sales, and expanding production capacity in proportion to expanding sales. Our team

is aiming to achieve a best provider strategy and therefore one of the main goals for operations is lowering

costs.

Our first strategy for our operation goals is to reduce the amount it costs to produce goods. Sticking

with our best provider strategy, it is important that we invest in training, as it will decrease the cost of our

product allowing us to sell it at a cheaper cost in order to maintain profit. Increasing steadily in R&D is also

important as it allows us to get access to new model numbers.

Matching production output with sales is important because it reduces our holding cost. By limiting

our safety stock and closely forecasting sales we can produce close to the exact amount we need and overall

lower costs. Our goal is to keep safety stock between 10-20% therefore keeping holding costs low but still

maintaining enough product in order to eliminate a stock out. Expanding capacity is also important but

making sure that it is in proportion to forecasted expansion. Having more lines producing than overall

demand will cause unnecessary costs and having too few lines puts us at risk of stocking out. By forecasting

how much we need to produce, it will allow us to plan when to open a new plant or add new lines.

Swot Analysis

Strengths Weaknesses

Highly trained staff Product safety stock

High quality product Large production capacity

Consistently increased advertisement

R&D spent

Selling expense Net income

Certificates of Deposit too low Loss in marketshare

Loss in workforce

Opportunities Threats

Real GDP growth in Merica Increasing marketshare

Few competitors in target markets

Becoming a Best Provider

Increasing inflation New product models

Pandau’s decreasing real GDP Competitor’s international

production plant

Objectives and Goals Foursight aims to meet the following goals and objectives:

General Company Objectives:

Capture and maintain 23% market share by the end of year 7.

Raise investor ROI by 10 % annually.

Increase stock prices by 20 % annually.

Raise EPS by 10% annually.

Grow net income by at least 10% annually

Marketing Objectives and Goals:

Maintain highest market share of competitors with a differentiated best – provider strategy.

Increase sales by 20% annually.

Introduce a two new models by the end of year 4 and one new model in subsequent years.

Maintain an advertising strategy that leads the industry in market awareness by increasing

advertising by at least 20 % per year.

Production / Operations and Goals:

Reach an increased savings level once every other year. Attaining savings level of at least 3 by year

7.

Maintain the ability to add capacity to Pandau and Merica plants, as needed. This enables the

production of at least 70% of merchandize worldwide at either plant.

Maintain a 10 - 20% safety stock every quarter beginning Year 3, Q1 through Year 7.

Finance Objectives and Goals:

Archive a Return-on-Equity (ROE) of 8% annually

Maintain the Credit rating at 2 and upgrade the rating to 1 (highest rating) from the end of year 5.

Improve the Altman Z score to 3 by the end of year 6.

Maintain a sound capital structure with Debt to Equity ratio being kept at below 30% at any time.

Human Resource Objectives and Goals:

Increase sales per salesperson to 9,000 units in Merica and 5,000 units in Pandau. We also must

maintain enough staff to meet project sales.

Reduces turnover to less than 10% per year.

Strategies and Tactics

General Company Strategy

Foursight will compete in the market, increase shareholder value, and differentiate itself from its

competitors by employing a broad differentiation strategy. This strategy will allow us to achieve a

sustainable competitive advantage by producing unique, high quality products with features our customers’

want. Generous investment policies in research and development and training, will result in continuously

being the first to market with new models as well as having low production costs.

Marketing Strategies

Foursight is committed to bringing a high quality differentiated product to the market. With that in

mind, we expect to maintain the highest market share of those companies that will choose to compete on a

differentiated strategy. Our product, one that will maintain the highest quality with the most features in all

markets, will allow us to be flexible with our prices with each new model will allow us to see increased

profits based on the market, but will also signal to the market the higher perceived value of owning the

latest. Based on our aggressive advertising strategy and forecasts we have set a goal to increase sales

volume by 10% annually.

In order to meet these expectations, we will have to lead the market in introducing new technology

and maintain an aggressive advertising strategy. Foursight plans to introduce 2 new models in year 4 and

follow that up with one new model in the subsequent years, all with the highest quality and improving

features. The company will also increase advertising by 20% year over year. We will spread the increase in

advertising dollar equally over each Merica location with the highest expenditure in our home area, Merica

3, to capitalize on the low storage costs in that region. We will maintain a lower overall advertising amount,

only increasing 15%, in Pandau because of the limited sales volume in this market.

Production / Operations Strategies

The production department is highly committed to Foursight’s overall business goals and objectives.

IN order to reach a new, increased savings level per y ear and attain a savings level of at least 4 by year 7;

we will invest heavily in training our employees. The training policy will be to consistently invest a

minimum of $100K every quarter, stating quarter 1 of year 4.

We ended year 3 with the production of a 4 line plant in Pandau, we also began by expanding our

Merica plant by adding 1 additional line to it at the beginning of year 3. Another 2 lines of capacity are

scheduled to be added to a plant by year 4 quarter 3. This will allow us to expand our production capacity if

needed and enable the production of at least 70% merchandise at either the Merica or Pandau plants. We can

then rest assured during unpredictable growth, or in the case of a catastrophe that at least one plant can pick

up production for the other.

The production team will employ a level production strategy. During low demand quarters, we will

still produce at capacity to ensure there is enough inventory to cover sharp boosts in sales and demand. We

will also ensure we have enough capacity to cover standard peak seasonal periods in quarter 2 and quarter 4.

This strategy will allow us to maintain an inventory level at the end of each quarter equal to at elast one

month of sales.

Finance Strategies

Foursight has set a policy of keeping cash reserves in the home area to meet at least 25% of total

operating expenditures and investment requirements in the enxt quarter. The quick ratio is also maintained

at 2.5 or higher in every quarter. Our company will begin paying a dividend beginning in year 5. The payout

ratio is projected at 20% of EPS. The company will also buy back shares beginning at the end of year 5,

reducing the number of outstanding shares by 5% annually. In the period from year 5 to year 7, we plan to

retire 25% of the outstanding bonds in each year to reduce the debt-to-equity ratio to below 15%. These

strategies will support the stock price, and consequently have positive effect on our company’s Altman Z

score and credit rating.

We will use retained earnings to finance the business expansion as this is the funding source of

lowest cost. Bond issuanance will be used to provide additional funds after the retained eranings have been

exhausted. Bond issuance, hwoever, will be avoided when debt-to-equity ratio exceeds 30% and the

company will then turn stock issuance.

Human Resource Strategies

At Foursight our company success is dependent on investing in our people and keeping them as part of our

team. With that said, we expect to keep our turnover rate at below 10# to keep a consistent presence in the

market. We will do so by offering a competitive compensation package that will allow for an annual salary

adjustment comparable to GDP increases of x% and a bi-annual commission raise of x-x%. We also expect

each of our sales representatives to generate x,xxx sales units in Merica and x,xxx units in Pandau and will

maintain enough staff to reach that goal based on sales projections. In order to reach this sales force capacity

we will check forecasted sales one quarter in advance versus the amount of staff on hand and hire based on

the next quarters projections.

Funds Required and Their Use

1.2 million (Pay in full) for a factory (two lines) in Merica A by year 4, build another factory in

America B by year 5. Assuming higher demand, extend line extension in any Merica extension in

year 7. Total cash requirement 1.2 million to 4 million dollar. Invested 4 line plant in Pandau dated

in year 3.

Use for expansion in production(factory), pay off bond, repurchase stock, invest in CD only of

higher than 5%, in certain dilemma; get loan from bank.

Issue one million dollar worth of stock to pay majority of the factory in year 4. Issue stock is

recommended during higher prices(CPI). Want sufficient cash flow in avoidance for emergency loan

and investment in CD.

Bond payment 100k quarterly by year 4(bond retirement), repurchase stock by year 5. Give out

reasonable dividend to shareholders by year 4.

Current building in Pandau is quarterly 699k, assuming inflation remain the same.

Appendix A

Summary of Key Financial Data

Year 4 Year 5 Year 6 Year 7

Q1 Q2 Q3 Q4 TOT TOT TOT TOT

Last Quarter Sales 4413 5027 4686 5234 19360 20909 22587 24388

Current Sales 4413 5027 4686 5234 19360 20909 22587 24388

CD Interest 200 234 274 192 720 652 641 559

Net Sales to Affiliates 1700 2049 2061 2074 7884 8514 9196 9932

Sales to Liquidators 0 0 0 0 0 0 0 0

Subsidiary Dividends Rec’d 2513 3146 2798 3424 11881 12831 13769 14996

Total Receipts 10 16 24 19 69 75 80 87

Operating Expenditures 2282 2346 2416 2546 9590 10357 11186 10280

Interest Paid 100 115 96 140 451 487 526 568

Production Cost 2382 2681 2270 2688 10021 10822 11688 12623

Purchases from Affiliates 174 177 180 183 714 771 832 899

Operating Expense 135 138 140 142 555 599 647 699

Taxes Paid 65 68 70 72 275 297 320 346

Net Operating Cash Flow 459 472 498 5412 1941 2096 2263 2445

Investment Receipts 98 100 102 104 404 436 471 508

CDs Matured 100 102 104 106 412 444 480 519

Fixed Assets Sold 12 21 33 16 82 88 95 103

New Equipment 215 221 227 234 897 912 934 956

Sales Office Investment 0 5 10 10 25 20 20 20

Plant Investment

Subsidiary Stock Purchase

Net Investment Cash Flow

Appendix B

Consolidated Pro Forma Income Statement (000s)



Net Sales to Customers 4413 5027 4686 5234 19360 20909 22587 24388

Total Sales 4413 5027 4686 5234 19360 20909 22587 24388

Beginning Inventory 200 234 274 192 720 652 641 559

Goods Manufactured 1700 2049 2061 2074 7884 8514 9196 9932


Goods Available 2513 3146 2798 3424 11881 12831 13769 14996

Ending Inventory 10 16 24 19 69 75 80 87

Cost of Goods Sold 2282 2346 2416 2546 9590 10357 11186 10280

Less Value Added Tax 100 115 96 140 451 487 526 568

Gross Profit 2382 2681 2270 2688 10021 10822 11688 12623

Advertising Expenses 174 177 180 183 714 771 832 899

Sales Salaries 135 138 140 142 555 599 647 699

Sales Commissions 65 68 70 72 275 297 320 346

General Selling Expense 459 472 498 5412 1941 2096 2263 2445

Transportation Expense 292 335 339 345 1331 1437 1552 1676

Sales Office Depreciation 12 12 12 12 48 48 48 48

Total Selling Expenses 1137 1202 1274 1331 4944 5339 5766 6228

Research & Development 98 100 102 104 404 436 471 508

Total Training Expense 100 102 104 106 412 444 480 519

Storage Expense 12 21 33 16 82 88 95 103

Executive Compensation 215 221 227 234 897 912 934 956

Other Expenses 0 5 10 10 25 20 20 20

Appendix B (con.)

Consolidated Pro Forma Income Statement (000s) Continued



Total Admin and General Expense 425 460 464 470 1219 131 1421 1535

Total Operating Expense 1562 1581 1596 1615 5346 5773 6235 6734

Operating Profit (Loss) 341 465 516 702 2024 2185 2360 2549

CD Interest 17 16 15 14 62 48 54 50

Capital Gain (Loss) 0 0 0 0 0 0 0 0

Loan Interest 0 0 0 0 0 0 0 0

Bond Interest 48 43 38 33 162 142 102 82

Net Profit (Loss) Before Tax 308 412 533 601 1854 2002 2162 2335

Less Income Tax 120 161 208 234 723 780 843 910

Net Profit (Loss) After Tax 188 251 325 467 721 778 840 908

Foreign Currency

Adjustment 0 0 0 0 0 0 0 0

Comprehensive Income 188 251 325 467 1141 1232 1330 1397

Dividends Subsidiaries 0 0 0 0 0 0 0 0

Dividends to Parent 0 0 0 0 0 0 0 0

Dividends Shareholders 145 153 161 174 633 633 633 633

Accumulated Earning 44 142 267 355 808 858 945 1002

Appendix C

Pro Forma Cash Flow Sheet (000s)



Last Quarter Sales 3806 4133 5027 4686 17652 19064 20589 22236

Current Sales 2071 2245 2103 2456 8875 9585 10351 11179

CD Interest 17 16 15 14 62 58 54 50

Net Sales to Affiliates 0 0 0 0 0 0 0 0

Sales to Liquidators 0 0 0 0 0 0 0 0

Subsidiary Dividends Rec’d 0 0 0 0 0 0 0 0

Total Receipts 5579 4572 4890 5374 20620 22269 24051 25975

Operating Expenditures 0 0 0 0 0 0 0 0

Interest Paid 50 43 38 33 164 177 191 206

Production Cost 2143 2456 2491 2434 9524 10285 11108 11997


Operating Expense 1193 1372 983 785 4333 4679 5054 5458

Taxes Paid 275 283 299 315 1172 1265 1367 1476

Net Operating Cash Flow 2711 3100 3678 2745 12234 13212 14269 15411

Investment Receipts 0 0 0 0 0 0 0 0

CDs Matured 1000 1000 1000 1000 4000 4000 4000 4000

Fixed Assets Sold 0 0 0 0 0 0 0 0

Investment Expenditures:

New Equipment 0 221 227 234 897 912 934 956

Plant Investment 549 5 10 10 25 20 20 20

Sales Office Investment 0 0 0 0 0 0 0 0

Subsidiary Stock Purchase 0 0 0 0 0 0 0 0

Net Investment Cash Flow (549) 0 0 0 (549) 0 0 0

Appendix C (con.)

Pro Forma Cash Flow Sheet (000s) (con.)



Financing Receipts:

Loans from Bank 0 0 0 0 0 0 0 0

Stock sold to Parent 0 0 0 0 0 0 0 0

Bond Sale 0 0 0 0 0 0 0 0

Stock Sale 0 0 0 0 0 0 0 0

Financing Expenditures:

Dividends Paid 0 0 0 0 0 10 10 10

Dividends to Parent 0 0 0 0 0 0 0 0

Bank Loans Repaid 0 0 0 0 0 0 0 0

Bonds Repurchased 100 200 200 200 700 200 200 200

Stocks Repurchased 0 0 0 0 0 0 0 0

Net Financing Cash Flow (100) (200) (200) (200) (700) (200) (200) (200)

Beginning Cash Balance 2823 2899 3185 3341 2823 3341 3658 4122

Quarter Net Cash Flow 76 286 156 211 729 787 850 918

End Quarter Cash Balance 2899 3185 3341 3552 12977 3457 3758 4315

Required Loan + Interest 0 0 0 0 0 0 0 0

Appendix D

Pro Forma Balance Sheet (000s)



Assets

Cash Balance 2899 3185

35413

952 13577 14663 15826 17103 24388

Time Certificates of Deposit 1000 1000 1000 1000 4000 4000 4000 4000

Accounts Receivable 2207 2514 2343 2617 9681 10455 11291 12195

Inventory 456 562 742 421 2181 2355 2543 2747

Total Current Assets 7090 10511 13350 16858 16858 16858 16858 16858

Net Sales Office 1379 1367 1355 1343 5444 5315 5247 5102

Net Manufacturing Plant 4678 4626 4574 4522 18490 18123 17852 17589

Manufacturing Equipment 2068 1961 1854 1747 7630 7562 7428 7346

Equity in Subsidiaries 0 177 180 183 714 771 832 899

Other Investments 2000 2000 2000 2000 8000 8000 8000 8000

Total Fixed Assets 2000 2000 2000 2000 8000 8000 8000 8000

Total Assets 9090 12511 1530 18858 20366 21995 23755 25655

Liabilities and Equity

Accounts Payable 456 575 257 260 1548 1671 1805 1950

Bank Loans 0 102 104 106 412 444 480 519

Taxes Payable 100 115 96 140 451 487 526 568

Total Current Liabilities 556 690 749 8111 2806 3030 3272 3534

Bonds Outstanding 1900 1700 1500 1300 1100 900 700 500

Total Liabilities 2456 2390 2249 2111 9206 9942 10737 11596

Capital Stock 9500 9500 9500 9500 9500 9500 9500 9500

Accumulated Earnings 44 142 267 355 808 872 942 1017

Acc. Foreign Currency Adj. 3851 4123 4366 4253 16523 17844 19272 20813

Total Equity 9500 9500 9500 9500 9500 9500 9500 9500

Total Equity & Liability 12056 11990 11653 11700 47399 48346 49312 50299

Appendix E

Sales Forecast

Section 1: FORECAST OF PROJECTED INDUSTRY SALES IN UNIT (000) FOR EACH

MARKET

1 Year 4 Year 5 Year 6 Year 7


M1 520 655 625 725 2560 2700 2825 3055

M2 553 570 545 645 2280 2580 2710 2880

M3 535 555 530 630 2220 2490 2500 2685

P 373 425 400 500 1700 1945 1945 2090

TOT 1981 2205 2100 2500 8760 9715 9980 10710

Section 2: COMPANY FORECAST IN MARKET SHARE FOR EACH MARKET



M1 19.2 19.4 19.6 19.8 20 21 22 23

M2 19 19.2 19.4 19.6 19.8 20.8 21.8 22.8

M3 18 18.2 18.4 18.6 18.8 19.8 20.8 22.6

P 20 20.2 20.4 20.6 20.8 21.8 22.8 23.8

TOT 19 19 19 19 20 21 21.4 21.1

Section 3: COMPANY FORECASE IN UNITS (000) FOR EACH MARKET



M1 111 131 125 145 512 540 565 611

M2 104 114 109 129 456 516 542 576

M3 101 111 106 126 444 498 500 537

P 75 85 80 100 340 389 389 418

TOT UNIT 391 441 420 500 1752 1943 1996 2142

TOT $(000) 3190 4410 4200 5000 17520 19430 19960 21420

Appendix F

GAR – Goals Attainment Report

Foursight CSU, Long Beach W8C7

Goal Attainment Report

Year 4 Year 5 Year 6 Year 7 MARKETING Goal Actual Goal Actual Goal Actual Goal Actual

Company Market Share 20 21 22 23 Gross Sales Growth 30% 31% 32% 33%

Salesperson Productivity 10200 10500 11000 12100

PRODUCTION

Savings Level 2 3 4 5 Model # 2 3 4 5

Unit Production Cost $ 4.41 4.67 4.98 5.26

FINANCE Growth Net Income 20% 22% 23% 24%

Net Income to Equity % 20% 17% 19% 21%

ROI % 10% 15% 20% 25% EPS (growth) 11% 11% 11% 11%

Stock Price (growth) 12% 12% 13% 13%

Foursight- Business Plan (1) (1)

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