ZippyTech Financial Plan

Name: Kshitij Modak

PRN: 20230305031

Company : ZippyTech

Background:

ZippyTech is a young and ambitious company founded in 2020 by [a team of passionate

engineers with a vision to create innovative and ergonomic computer mice. They
identified a gap in the market for affordable, high-quality mice that cater to the growing
needs of gamers, professionals, and everyday computer users.

About ZippyTech:
 Mission: To design and manufacture high-performance computer mice that are
accessible, comfortable, and enhance user experience.
 Vision: To become a leading player in the global computer peripherals market,
recognized for its commitment to cutting-edge technology, ergonomic design,
and user satisfaction.
 Products: ZippyTech focuses on a core line of wired and wireless mice, offering
a range of features to suit different user needs. They may include:
o Basic productivity mice for everyday use.
o Ergonomic mice designed for comfort and reduced strain during extended
computer sessions.
o High-performance gaming mice with features like customizable buttons,
programmable macros, and adjustable DPI settings.
  Focus on Innovation: ZippyTech prioritizes research and development to create
innovative features and functionalities that cater to evolving user demands. This
could involve:
o Ergonomic design principles to minimize wrist strain and discomfort.
o Lightweight and durable materials for improved user experience.
o High-precision sensors for accurate cursor tracking.
o Customizable software for personalized user settings.
 Target Market: ZippyTech targets a broad audience, including:
o Gamers seeking enhanced performance and control.
o Professionals who prioritize ergonomics and comfort for long work hours.
o Students and home users who desire a reliable and affordable mouse.
 Competitive Advantage: ZippyTech strives to differentiate itself by:
o Offering a balance between affordability and high-quality features.
o Employing user-centric design principles to ensure comfort and
functionality.
o Maintaining a commitment to research and development to stay ahead of
the curve.
o Building strong customer relationships through excellent customer service.
Future Plans:

ZippyTech aims to expand its product line by introducing new mice with advanced
features and exploring wireless charging options. They also plan to increase their brand
awareness and enter new markets through strategic partnerships and targeted
marketing campaigns. As they grow, they may consider:

 Expanding their manufacturing capabilities.

 Implementing sustainable practices in their production process.
 Exploring the development of other computer peripherals.
Assumptions
15,000,00
Investment (Building) 0 INR
Means of Finance
12,000,00
- Equity 0 INR
- Debt 3,000,000 INR
Sales Target (quantity) 100,000 per month
YoY Growth in Sales 10%
Selling Price of Mouse 1,100 INR
Cost price of Mouse 815 INR
Employee Cost 20% of sales
Others 5% of sales
Depreciation Rate 15% SLM
Debt Assumptions
installment
Repayment yearly installment 5 s
Interest rate 10%
Tax Rate 20%
100000
Profit & Loss Statement
In Lacs
Year 0 1 2 3 4 5

Proposed Sales Quantity 1200000 1320000 1452000 1597200 1756920

Revenue from Operations (sales) 13,200 14,520 15,972 17,569 19,326

Expenses 13,080 14,388 15,827 17,409 19,150

- Cost of RM 9,780 10,758 11,834 13,017 14,319

- Employee Expenses 2,640 2,904 3,194 3,514 3,865

- Others 660 726 799 878 966

- Change in inventory

EBITDA 120 132 145 160 176

Less: Depreciation 23 23 23 23 23

EBIT 98 110 123 137 153

Less: Interest 3 2 2 1 1

EBT 95 107 121 136 153

Less: Tax 19 21 24 27 31

PAT 75.6 85.7 96.7 108.8 122.1

Cash flow Statement
In Lacs
Year 0 1 2 3 4 5

Cash flow from Operations 98 108 119 131 145

Profit After Tax 76 86 97 109 122

Depreciation 23 23 23 23 23
(Increase)/Decrease in Debtors
(Increase)/Decrease in Inventory
Increase/(Decrease) in Creditors

Cash Flow from Investing 0 0 0 0 0

(Increase)/Decrease in Investments 0 0 0 0 0

Cash Flow from Financing -6 -6 -6 -6 -6

Infusion of Equity 0 0 0 0 0
Increase in Long Term Borrowings 0 0 0 0 0

Repayment of Long Term Borrowings (6) (6) (6) (6) (6)

Increase/(Decrease) in Short term
Borrowings

Net cash flow during the year 92 102 113 125 139
Opening Cash Balance 0 92 194 307 433
Closing Cash Balance 92 194 307 433 571
Balance Sheet
In Lacs
Year 0 1 2 3 4 5

ASSETS

Non Current Assets 150 128 105 83 60 38

- Fixed Assets 150 128 105 83 60 38

- Investments

Current Assets - 92 194 307 433 571

- Debtors
- Inventory

- Cash 92 194 307 433 571

- Others

TOTAL ASSETS 150 220 299 390 493 609

EQUITY 120 196 281 378 487 609

- Share Capital 120 120 120 120 120 120

- Reserves & Surplus 76 161 258 367 489

LIABILITIES

Non Current Liability 30 24 18 12 6 -

- Long Term Debt 30 24 18 12 6 -

Current Liability - - - - - -
- Creditors
- Short Term Borrowings
- Others

TOTAL EQUITY & LIABILITY 150 220 299 390 493 609
CHECK 0 0 0 0 0 0
Financial Analysis

Weigthed Average Cost of Capital (WACC)

Cost post
Source of Finance Amount Proportion Cost Tax WACC
Equity 120 0.80 15% 15% 12.00%
Debt 30 0.20 10% 8.00% 1.60%
Total 150 13.60%

Net Present Value

Year 0 1 2 3 4 5
Cash Inflows

- PAT 76 86 97 109 122

- Depreciation 23 23 23 23 23

- Interest 3 2 2 1 1
Cash Ouflow

- Investment (150)
Terminal Value

- Net Block 38
Total Cash Flows -150 101 111 121 133 183
Discount Rate is WACC 13.60%

NPV of the Project 283.36 lakhs

Internal Rate of Return (IRR)

Year 0 1 2 3 4 5

Total Cash Flows -150 101 111 121 133 183

IRR 71%

Profitability Index (PI)

P/V ₹ 478.16
Investment 150
PI 3.19

PI>0, DO the project