Table of Content

    Do you want to start a Christmas tree farm business?

    Have you been thinking of starting a tree farm? There is no doubt a Christmas tree farm is a lucrative business venture that promises a handsome return. Christmas is undoubtedly the most popular annual celebration that is widely observed across the world. Amongst the must-haves for a Christmas celebration is a having a Christmas tree. If you’re thinking of how to transform your piece of land to a profitable venture with less risks and easy maintenance, planting Christmas trees is a great idea.

    The advantage of managing a Christmas tree farm is it comes with very little maintenance which allows you to concentrate and pursue other ventures. If well taken care of, you will enjoy great profits for an extended period of time. Without the need to spend so much money running a Christmas tree farm, it’s definitely a smart business idea that will always offer a product that is needed on the market. It takes about eight years for Christmas trees to fully mature, so it requires good planning, strategy execution and patience to see the fruits. To be a successful Christmas tree farmer, you need to plan early and lay good strategies at the beginning.

    To avoid undergoing the stress of what needs to be done, this well-articulated Christmas tree farm business plan experts with guide you every step of the way.

    Executive Summary

    2.1 The Business

    The Christmas tree farm will be registered as Cole Christmas Tree Farm and will be based in Spring Texas. Starting a Christmas tree farm business requires careful planning an expert management team to oversee and coordinate business activities. Since the owners of the business have property in Spring, Texas, it was found to be the best place to set up the business. The tree farm sits in a strategic location within easy reach of both individuals as well as corporate customers. In addition, the Christmas tree farm is located close to large cities that offer a stable and ready market for products. Cole Christmas Tree Farm will be owned and run by Stephen Copeland who is a Botanist by profession. Copeland has had a successful long career in Botany where he has served in various capacities in different organizations.

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    2.2 Management

    The tree farm will be managed by Mr. Copeland who will be assisted by his son, Andrew Copeland who is a recent business Management graduate from Texas State University. The management structure has been well-planned to ensure efficiency is achieved and professionalism is not compromised.

    2.3 Customers

    The tree farm will provide various types of Christmas tree varieties to both the residential and commercial market in nearby towns and cities. The aim of starting the business is to make sales both to individual buyers who need a Christmas tree in their home and various distributors and retailers. For corporate bulk sales, the trees are sold wholesale prices.

    2.4 Company Target

    Cole Christmas Tree Farm aims to start a Christmas tree farm that will be the most famous supplier of quality Christmas trees to both residential and commercial clients. The business is planning to leverage its success by introducing a wide variety of tree varieties to give customers a chance to choose from different species. Thanks to diversification, Mr. Copeland hopes to tap into a market where existing Christmas tree farms only focus on selling one or very few Christmas tree varieties.

    Christmas tree farm business plan - 3 Years Profit Forecast

    Company Summary

    3.1 Company Owner

    Mr. Copeland is an expert in Botany and has acquired immense experience in core areas of botany such as plant diversity, economic botany, plant breeding and dendrology among others. He has worked several in both local and international organizations spanning a period of over thirty years. During the course of his career, Stephen Copeland has attended numerous high-profile international meetings and conferences in different parts of the world.

    3.2 Reason for Starting the Business

    Throughout Copeland’s entire career, he has always strived to provide advice and expertise on how to utilize plant diversity for economic purposes. His in-depth study of tree species has enabled him understand how to successfully run tree farms and provide the best quality species. Christmas is a major holiday and the demand for Christmas trees is always at high but there is still lack of sufficient suppliers to meet the demand. Understanding the need to diversify Christmas tree species and offer clients better exemplary service their money, Mr. Copeland decided to start a Christmas tree farm to ensure customers can order nice Christmas trees.

    3.3 How the Business will be started

    In order to ensure the Tree Farm succeeds, Mr. Copeland has come up with a comprehensive Christmas tree farming business plan. The plan is intended to forecast what is required to start and successfully run the Christmas tree farm. With assistance from financial and business set-up experts, Copeland has forecasted amounts below required for investment group business plan, expenses, assets as well as loans required for the start-up.

    Christmas tree farm business plan - StartUp Coast

    A full breakdown of how much is needed to fund the business, sum assets, start-up funding, total liabilities, liabilities, total planned investment, capital required, capital and liabilities as well as start-up expenses as forecasted is indicated below.

    Start-up Expenses  
    Legal $2,000
    Consultants $1,000
    Insurance $10,000
    Rent $8,000
    Research and Development $10,000
    Expensed Equipment $15,000
    Signs $5,000
    TOTAL START-UP EXPENSES $51,000
    Start-up Assets $0
    Cash Required $60,000
    Start-up Inventory $30,000
    Other Current Assets $10,000
    Long-term Assets $4,000
    TOTAL ASSETS $10,000
    Total Requirements $15,000
    START-UP FUNDING $0
    START-UP FUNDING $50,000
    Start-up Expenses to Fund $20,000
    Start-up Assets to Fund $22,000
    TOTAL FUNDING REQUIRED $0
    Assets $12,000
    Non-cash Assets from Start-up $7,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $30,000
    Cash Balance on Starting Date $10,000
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $10,000
    Investor 2 $12,000
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $70,000
    Loss at Start-up (Start-up Expenses) $55,000
    TOTAL CAPITAL $35,000
    TOTAL CAPITAL AND LIABILITIES $40,000
    Total Funding $70,000

    Services for Customers

    Cole Christmas Tree Farm will provide different types of Christmas trees for their esteemed clients within Spring, Texas and other regions across the state and country. The unique thing about Cole Christmas Tree Farm will be the availability of various Christmas tree species allowing customers to make a choice from various options available. Emphasis has been placed on providing the best quality Christmas trees to ensure customers get full value for their money. Each of the farm’s products will meet the best quality standards.

    Cole Christmas Tree Farm intends to offer the following types of Christmas trees:

    • Fir Trees which include Douglas Fir, Balsam Fir and Fraser Fir
    • Pine Trees comprising of Afgan Pine, White Pine and Scotch Pine
    • Cypress Trees including Leyland Cypress and Carolina Sapphire
    • Cedar Trees such as Eastern Redcedar

    Clearly outlining the types of products to be offered is a critical issue that has been by Cole Christmas Tree Farm when planning how to start a Christmas tree business.

    Marketing Analysis of Christmas Tree Business

    In a bid to counter challenges that arise when starting a tree farm business, Cole Christmas Tree Farm has carried out an accurate and extensive market analysis. A detailed marketing analysis is aimed at helping the business to understand how to start a Christmas tree farm. This information is critical as it will guide the farm’s strategies that will be implemented over the next few years after inception of the business. This information is included in the initial Christmas tree farm business plan so that all future plans are made in accordance to the facts presented in the analysis of the market niche. Given the importance of having a solid marketing analysis for Cope Christmas Tree Farm, Mr. Copeland obtained help from marketing experts to help develop a solid marketing plan in line with current market demands.

    Christmas is a widely celebrated global holiday and as such, there is an increased demand for Christmas trees and other decoration which is expected to become higher in the future. Decorating Christmas trees is a tradition many people cherish. More individuals and businesses are increasingly putting up Christmas trees. According to statistics, about 10,000,000 artificial Christmas trees are sold in the United States each year but this is going down. This signifies the demand for live Christmas trees remains is rapidly increasing and a tree farm would definitely yield good results if well managed.

    The management of Cole Christmas Tree Farm knows the success or failure of the business wholly depends on how the enterprise will market itself to its target customers. For marketing analysis and strategy to succeed, it is critical to identify the target audience and prospective customers. Stephen Copeland has done extensive market research and sought help from experts to identify target customers and come up with a defined marketing strategy.

    5.1 Market Segmentation

    Cope Christmas Tree Farm has identified the following classes of target audiences which it intends to make them potential clients of the tree farm.

    Christmas tree farm business plan - Market Segmentation

    A comprehensive market segment that outlines the business target audience is explained as follows.

    5.1.1 Individuals

    Individual customers will be catered for under the retail scheme. Customers here are diverse and range from residents who live near the tree farm and can therefore, easily buy a Christmas tree from the farm. This category covers all customers living around the Cole Christmas Tree Farm as well as those who reside in the nearby cities and towns. Given the high population of neighboring towns and cities, the demand from individual buyers is extremely high and Cole Farm has to figure out how to ensure there is a steady supply of Christmas trees during peak time. Individual customers are very diverse and consist of people drawn from various social, religious and cultural backgrounds but who dedicate themselves to the spirit of Christmas. Cole Christmas Tree farm has identified individual customers as a lucrative market segment that needs to be adequately catered for.

    5.1.2 Companies and Businesses

    Cole Christmas Tree Farm intends to sell Christmas trees to various businesses which in this regard, are considered as wholesale customers. Businesses will buy Christmas trees from the business in bulk at wholesale prices and thereafter, sell them to their customers are retail prices. Given the rising demand for Christmas trees, retailers are always on the lookout for suppliers who can guarantee a steady supply chain. Since they purchase in bulk, corporate customers are key to the success of the tree farm considering revenue obtained from their purchases is high. When thinking of how to start a Christmas tree farm, the business knows wholesale buyers are critical for success and have to be accorded utmost professionalism.

    5.1.3 Nonprofit Organizations

    Cole Christmas Tree Farm hopes to sell their trees to Nonprofit organizations who in most cases, often have no problem spending more to buy trees compared to businesses buying on a wholesale basis. In most cases, this category of clients will buy many Christmas trees and sell them during fundraising and charity events.

    5.1.4 Local Councils and Governments

    Though not as common as the above customer groups, Cole Christmas Tree Farm will at times sell a few large trees to local councils and governments. Local councils will in most cases buy a tree or two, but will pay a much higher rate than individual customers, wholesale customers and nonprofit organizations. These sales are not easy to come by, but when they do, Cole Farm will earn a significant amount of income.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Individuals 35% 10,000 13,000 16,000 19,000 22,000 12.00%
    Companies and Businesses 25% 20,000 25,000 30,000 35,000 40,000 10.00%
    Non Profit Organizations 18% 6000 8,000 10,000 12,000 14,000 14.00%
    Local Council &Government 22% 9000 10,500 12,000 13,500 15,000 8.00%
    Total 100% 45,000 56,500                68,000 79,500 91,000 10.00%

    5.2 Business Target

    The business aims to be the best Christmas tree grower in Spring and the entire Harris County in Texas. Cole Christmas Tree Farm hopes to recover the initial capital within the first three years of starting the business as well as grow annual sales by an average of 20%. In order to meet its targets, the farm will emphasize on superb customer service and offer quality Christmas trees. There are concerted efforts to ensure every customer is welcomed in a friendly environment and treated with respect and dignity. The aim of this Christmas tree farm business is to build long-term and sustainable relationships with customers.

    5.3 Product Pricing

    Product pricing is a key factor that will affect the sales of Christmas products and buyers are keen when it comes to pricing. For this reason, Cole Christmas Tree Farm endeavors to strategically set prices in order to attract more customers, but at the same time, ensure good profits are realized. Given the fact trees take an average of 6-8 years to mature, it makes sense for the business to obtain good profits. Product prices have been determined after doing extensive market research to determine what competitors are charging.

    Cole Christmas Tree Farm intends to charge the following average prices for its products:

    • Fir Trees $130.00
    • Pine Trees $200.00
    • Cypress Trees $300.00
    • Cedar Trees $400.00

    Strategy

    After the completion of an extensive market analysis, Mr. Copeland has come up with a winning strategy that will be used to target and reach out to identified customer segments in Section 5.1. The sales strategy has been carefully formulated by the Founder of Cope Christmas Tree Farm with assistance from experts.
    The sales strategy entails the following aspects:

    6.1 Competitive Analysis

    The tree farm will face competition as there are other similar establishments around Spring, Texas and neighboring towns and cities. While deliberating how much does a Christmas tree cost , Cole Farm will keep its prices slightly below the market price for the first few years in order to attract more customers and gain a market presence. Given the fact that the farm sits on a large acreage, it will be easy to strike a balance between offering lower prices and securing good profit margins. The business also understands the competitive nature of the business and thus understands the need to be unique and innovative.

    6.2 Sales Strategy

    With help from experts, Cole Christmas Tree Farm has come up with an ambitious and exciting strategy to make sure business goals are realized. These strategies entail:

    • Maintaining superb quality of trees by ensuring they are well taken care of by professionals from the time the trees are planted until they mature.
    • Sell trees at a slightly lower price than competitors and at the same time, offer amazing discounts on bulk purchases.
    • The farm will be established in an area that is easily accessible with a good road network to allow customers to visit the business.
    • Cole tree farm will focus on selling a great variety of tree species that comes in different sizes and shapes to ensure customers can choose from amongst many options.
    • The business will study the market to understand what customers want, identify challenges and loopholes to come up with products that will satisfy client expectations.
    • Selectively offer free delivery services especially to a few local residents with an aim of building lasting relationships.
    • Intensively market the tree farm on local media platforms, events and exhibitions as well as digital media platforms i.e. social media.
    • Build a digital platform to allow customers purchase Christmas trees online without having to physically visit the property.

    6.3 Sales Forecast

    The business strongly believes in its unique, quality-oriented and superb customer service to attract a loyal customer base. For this reason, the business has forecasted a steady increase in its annual sales. After carefully analyzing the market segmentation, the tree farm has forecasted to achieve the following sales on an annual basis.

    The information in the table and column charts below contains details about sales forecasts.

    Christmas tree farm business plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Fir Trees 200,000 300,000 260,000
    Pine Trees 300,000 350,000 450,000
    Cypress Trees 350,000 450,000 480,000
    Cedar Trees 500,000 550,000 600,000
    TOTAL UNIT SALES 1,350,000 1,650,000 1,790,000
    Unit Prices Year 1 Year 2 Year 3
    Fir Trees $130.00 $150.00 $170.00
    Pine Trees $200.00 $300.00 $400.00
    Cypress Trees $300.00 $400.00 $500.00
    Cedar Trees $400.00 $500.00 $600.00
    Sales
    Fir Trees $150,000 $200,000 $300,000
    Pine Trees $100,000 $120,000 $200,000
    Cypress Trees $30,000 $40,000 $60,000
    Cedar Trees $120,000 $170,000 $200,000
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Fir Trees $0.50 $0.60 $0.70
    Pine Trees $0.30 $0.35 $0.40
    Cypress Trees $0.25 $0.30 $0.35
    Cedar Trees $2.00 $3.00 $4.50
    Direct Cost of Sales
    Fir Trees $80,000 $100,000 $150,000
    Pine Trees $45,000 $70,000 $105,000
    Cypress Trees $15,000 $25,000 $40,200
    Cedar Trees $14,000 $36,000 $70,000
    Subtotal Direct Cost of Sales $154,000 $231,000 $365,200

    Personnel Plan

    In order to be the market leader in selling Christmas trees, Cole Christmas Tree Farm plans to put together a dedicated, knowledgeable and experienced staff to be involved in day-to-day operations of the business. The following plan is a proposed personnel plan to start Christmas farm as well as their average salaries.

    7.1 Staff Plan

    Mr. Stephen Copeland who is the business owner will be the General Manager of Cole Christmas Tree Farm. In addition, the business intends to hire the following staff.

    • 1 Manager to oversee operations and administration of the tree farm
    • 1 Cashier to receive and process payments from customers
    • 1 Administrator to perform general admin duties and work closely with the manager
    • 2 Sales and Marketing Executives responsible for marketing the Christmas tree farm
    • 2 Gardeners to take general care of the farm and ensure favorable conditions for growth of trees
    • 2 Tree Farmers to provide advice, supervise and monitor the growth and maintenance of trees
    • Cleaners to perform general cleaning duties in the business premises
    • Drivers to run various errands for the business as well as deliver customer orders

    To keep standards high, all employees will undergo intensive interviews and vigorous on-job training before assuming their positions.

    7.2 Average Staff Salaries

    The table below clearly illustrates forecasted staff data and the salaries they will earn in the first three years.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $80,000 $85,000 $90,000
    Cashier $40,000 $45,000 $50,000
    Administrator $35,000 $40,000 $45,000
    2 Sales and Marketing Executives $100,000 $120,000 $130,000
    2 Gardeners $55,000 $65,000 $75,000
    2 Tree Farmers $120,000 $160,000 $180,000
    Cleaners $20,000 $30,300 $35,000
    Drivers $50,000 $53,000 $60,000
    Total Salaries $500,000 $598,300 $665,500

    Financial Plan

    The business enterprise come up with a detailed and elaborate financial plan that will help the business attain its goals. The Cole Christmas Tree Farm will be financed by Stephen Copeland and two investors. At the moment, the funding is sufficient to cater for starting a Christmas tree farm business so no outside loan is required.

    8.1 Important Assumptions

    Cole Christmas Tree Farm’s financial projections have been forecasted based on the assumptions below.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.00% 10.00% 11.00%
    Long-term Interest Rate 6.00% 6.00% 6.00%
    Tax Rate 15.00% 16.00% 18.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    The graph and table below illustrates Cole Christmas Tree Farm Brake-even Analysis.

    Christmas tree farm business plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 4000
    Monthly Revenue Break-even $100,000
    Assumptions:
    Average Per-Unit Revenue $200.20
    Average Per-Unit Variable Cost $0.40
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

    The charts below seek to explain the company’s anticipated Profit and Loss statistics based on monthly and annual rates. Using the information, it is easier to see forecasted financial figures for Cole Christmas Tree Farm.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $600,000 $750,000 $900,000
    Direct Cost of Sales $45,000 $50,000 $60,000
    Other $0 $0 $0
    TOTAL COST OF SALES $45,000 $50,000 $60,000
    Gross Margin $300,000 $350,000 $400,000
    Gross Margin % 80.00% 84.00% 90.00%
    Expenses
    Payroll $500,000 $600,000 $700,000
    Sales and Marketing and Other Expenses $2,000 $4,000 $6,000
    Depreciation $1,000 $2,000 $3,000
    Leased Equipment $0 $0 $0
    Utilities $3,000 $5,000 $7,000
    Insurance $1,000 $1,500 $1,700
    Rent $5,000 $6,000 $7,000
    Payroll Taxes $25,000 $30,000 $40,000
    Other $0 $0 $0
    Total Operating Expenses $150,000 $200,000 $250,000
    Profit Before Interest and Taxes $70,000 $80,000 $90,000
    EBITDA $30,000 $35,000 $40,000
    Interest Expense $0 $0 $0
    Taxes Incurred $12,000 $15,000 $18,000
    Net Profit $60,000 $75,000 $90,000
    Net Profit/Sales 20.00% 30.00% 40.00%

    8.3.1 Monthly Profit

    Christmas tree farm business plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Christmas tree farm business plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Christmas tree farm business plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Information about profit and loss as well as total cost of sales has been summarized in the chart below.

    Christmas tree farm business plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    Cole Christmas Tree Farm projected cash flow is indicated in the column diagram below.

    Christmas tree farm business plan - Projected Cash Flow

    The table below shares comprehensive data about pro forma cash flow, subtotal cash received, subtotal cash spent, sub-total cash from operations and sub-total spent on operations.

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $30,000 $35,000 $40,000
    Cash from Receivables $5,000 $7,000 $9,000
    SUBTOTAL CASH FROM OPERATIONS $35,000 $42,000 $49,000
    Additional Cash Received
    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 $0 $0 $0
    SUBTOTAL CASH RECEIVED $35,000 $42,000 $49,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $15,000 $17,000 $19,000
    Bill Payments $12,000 $20,000 $35,000
    SUBTOTAL SPENT ON OPERATIONS $27,000 $37,000 $54,000
    Additional Cash Spent
    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 $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $28,000 $40,000 $56,000
    Net Cash Flow $10,000 $14,000 $16,000
    Cash Balance $18,000 $20,000 $22,000

    8.5 Projected Balance Sheet

    The projected balance sheet below indicates key information pertaining to Cole Christmas Tree Farm’s total assets, total liabilities, total current assets, total liabilities and capital, total long-term assets, total capital and subtotal current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $140,000 $180,000 $220,000
    Accounts Receivable $9,000 $11,000 $14,000
    Inventory $1,500 $3,000 $4,500
    Other Current Assets $2,000 $2,000 $2,000
    TOTAL CURRENT ASSETS $152,000 $196,000 $240,500
    Long-term Assets
    Long-term Assets $8,000 $10,000 $12,000
    Accumulated Depreciation $11,000 $13,000 $15,000
    TOTAL LONG-TERM ASSETS $1,000 $500 $300
    TOTAL ASSETS $150,000 $180,000 $210,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $10,000 $12,000 $14,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $10,000 $12,000 $14,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $10,000 $12,000 $14,000
    Paid-in Capital $20,000 $20,000 $20,000
    Retained Earnings $25,000 $50,000 $75,000
    Earnings $80,000 $110,000 $140,000
    TOTAL CAPITAL $150,000 $180,000 $210,000
    TOTAL LIABILITIES AND CAPITAL $165,000 $195,000 $225,000
    Net Worth $190,000 $210,000 $250,000

    8.6 Business Ratios

    The following table has data regarding Cole Tree Farm business ratios, net worth, total assets and ratio analysis.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 5.00% 20.00% 40.00% 3.00%
    Percent of Total Assets
    Accounts Receivable 5.00% 4.00% 3.00% 8.00%
    Inventory 2.00% 1.80. % 1.60% 9.00%
    Other Current Assets 1.00% 2.00% 1.95% 20.00%
    Total Current Assets 100.20% 130.10% 150.25% 44.00%
    Long-term Assets -5.00% -20.00% -25.30% 40.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.00% 3.00% 2.50% 23.70%
    Long-term Liabilities 0.00% 0.00% 0.00% 20.50%
    Total Liabilities 4.10% 2.00% 1.50% 44.10%
    NET WORTH 80.30% 90.00% 100.10% 34.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 80.10% 82.00% 84.00% 0.00%
    Selling, General & Administrative Expenses 73.00% 70.00% 65.00% 62.00%
    Advertising Expenses 2.00% 1.00% 0.20% 1.20%
    Profit Before Interest and Taxes 22.00% 25.00% 28.40% 1.50%
    Main Ratios
    Current 10.1 13 16 0.5
    Quick 23 25.88 30.36 0.3
    Total Debt to Total Assets 2.08% 1.00% 0.66% 45.00%
    Pre-tax Return on Net Worth 60.00% 70.00% 72.20% 1.20%
    Pre-tax Return on Assets 54.20% 57.00% 60.00% 5.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 15.20% 18.10% 20.00% N.A.
    Return on Equity 40.00% 43.00% 46.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 3 4 5 N.A.
    Collection Days 82 89 104 N.A.
    Inventory Turnover 16 19 22 N.A.
    Accounts Payable Turnover 13.1 13.4 15 N.A.
    Payment Days 25 25 25 N.A.
    Total Asset Turnover 1.6 1.4 1.2 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.01 -0.03 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $100,000 $120,000 $140,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.35 0.38 0.41 N.A.
    Current Debt/Total Assets 3% 2% 1% N.A.
    Acid Test 20 24 27 N.A.
    Sales/Net Worth 1.3 1 0.4 N.A.
    Dividend Payout 0 0 0 N.A.

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