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6.1 Operating Plan & Financial Model

Chapter 6.1 Additional Resources Ohr i s t Lk e n Vdo [] i s0 e U dt [] pa s2 e C at 6 poi st -ys pn rao f cm li t s pia e m n oai ni m dl hp r . rv e s pb-e iom tno o p tgh i r r l et f fac l oe e 1 d e t f i r en e x m y e s n a , i l i t oe tg l .Te t s e whv be ecrt f mt cat ad rpeet wt n u n h pri p n h s p bl ae en xe e r h hp rn a r n d i c d g e an a e o pd o e e e s e h ate e lk tast nvt sn ei s rd shy eko en ad adtt r ui fac l cv w bi so ssi oa rigt g tt a t se tri n vla h e l gi ni i n in o t ae n e fe i e e st n a n m dl oe . Develop Detailed Bottom-Up Financial Model 1 What to Cover neh i oa ra a u kh hl eudrad g f e o pnfac l i . O c t n vt hs qi ,i -vlne t i ot cm ay i nis t en o c g e sn n h s n a, incs rtc a a oe e idi ni m dl esrt acr y n c d iy f e s ees yo r t m rdtl fac l oet nu h cu c ad r il ot a ee ae n a o ee a e bi h t detnl f m tnIa btm u nli t i idapr ot fac l oea dvl e icoaio ao.n oo -p aa s, en v ulas f ei ni m dlr ee pd r i nr i t ys h d i t h n a e o idtl hnh pr a lkdoe etf mt fap nF lwn t gi ne n sm l n e iTe t as r i e t t roo h i ll . oo i h u ac ad a p s a. e t en gh r en a l ge d e poi dnh bcg ud etnt i oa ra c a t : rv e it akr n sco, en vt cn r t h d e o i h n o ee e O e tg l e i u tdvl i t oe tg l i l e sl udrad g f e pri P n K yn t o ee p gh pri p nn u a od ne t i ot an a ps o n e an a c d i sn n h s p r ue tbi t i oao, dtl udrad g fo t po cwl eeu t t se ido udh n vtna e id ne t i ohw h rj t ib r le e qr l en i ae sn n e e l ga d b t F A(c d gh et a deg ot cn at l,n ko l g aoto t yh D i l i t sm t l t f e li lis ad nwe e buhw h e n u n e i e n h h ic r ) a d e pout ib sl Iprnot tf mt oe tg l a a udrad g f hnh rdcwl e o .m ot tu u r h pri p n r n ne t i ow e t l d a p s o e an a e sn n e f ta wl cuadh et a dii f o ectamlt e t tfct oe l i sl iocrn t sm t t n o t rrcl is nsh aet e vrl r e l s e i e mg rh i i eo a f h a fac l oe i ni m dl n a . Sai P n K ynu tdvl i t s f g l i l eh oe tg l ad n tfg l e i t o ee p gh tf p nn u t pri p n n a f n a ps o n e ai a c d e an a n udrad g f e o p xi asc t wtbii t i oao. a c s aetnoh ne t i ot cm l i s s ie i ud gh n vtnPy l e tno tt sn n h et e o a d h ln e n i o ti e mlt e ad e ri hwm n s f ib r ue tah v ec oeA di aytn is ns n dtmn o ay tf l ee ido ci e ah n. di nl, i eo e e a wl q r e t l hk o

aot em at aec mlt e ihv o t cm ay n i s f gee a i oe but ipct tah is n wl ae nh o pn adt tf l l st vs h h eo l e s ai v s m n f w r. o a r d Ma eMoe ee p o a oo -p n ao-o n a em dln t neoceh r t dl D vl bt btm u ad t dw m r t oeadh r ni t k o h t p k e c l e toIt btm u m rem dldnf ()h ky ei ue tm au w .nh oo -p a t oe i t : t e m t s sdo esr e t k , ei 1 e y r c e por s ti d hsi sitl hsil e . 2 tin t e ad eue etprrnd rg s rn pyia , s ld opa,t; )rn gi s n r im n eti e ae c n n ae ts c ( a i m qr s ae pyia (r t rprpie ei)()ieo a p p n s ays tprrnd hsi o o eaportm t s 3 t tr u ad t d-a eti cn h a r ; m c m e te ae pyia;4 tgteom ne ei pra se;5 nm eosl r r eti sht i hsi ()a epr rac m t s esl r ()u br fa se e n te t wl cn r f r c e p e p s av a l ah v ad a tnh tgt ei. ci e n m ia t a em t s e ni e r r c C sPo cos T pea cspo cost s f g l ia iprni u a n wt ot rj tn o r r otrj tn, e tf p ns nm ot t pt l g i ei pe e i h ai a n a n ,o h cm ete ecm rso e p ye a rcs. h cm ay utl cni ro m c o ptv bnh a f m l e sly ot Te o pn m sao os ehw uh i i k r o a s s d m nf ti ad o- au c rgaii saet ine,n solt n eet a s au c rg n nnm nf ti f le pc i l edad hu h gtsm t a un a un ci s t wl d e i e aotri f mt l am re E ul iprnidvl i a t n udrad g f e bupin r h o l a t qaym ot t ee p g sog ne t i ot cg o e c k. l a s on r sn n h r m tis otasc t wtt poutoht ee a acre b t e io con a a rlcs s ie i h rdcs t t s cn cu ty ea nn acut w ea s oad h e ah al k t w e dvl i t cspo cos hn ee p gh otrj tn. on e ei I o e te et Teno e te etrv e a u m rot cm ay ati t n m Sa m n h i m s t npoi s sm a f e o pn nc a d c t c am d y h s ip e fac lodi . e u t t eao (& / l, G Asl,t)rr snb o i a i ni cni nB sr h t ri R Dse S & / e e .a e oal r m y n a t o e a h ts as as c e a e t b a im d tw rn snonet sht e nrfac l oeif l. e nm eie a i i ti s rt t et i ni m dl a t a ng g v o ah i n a e s uy C s F wSa m n m ot t pttt cs fws t et c d t cm ay m s ah l te et Iprni u oh ahl te ni l eh o pn ot o t a n s e o a m nu e s r et cm s t eth nm eopo c d m l eset a s fah pnpr e ni o e te n t u br frj t e p ye,sm t ocs sete c n am , e ee o i e e p yecs le tb setn qi et n et a s f vn rr ue. h ot tf m l e,ahi l o e pno eu m n ad sm t oi et ye idTe u uo o ky p , i e n o qr p tste et t cm li cs t bses ised h h a b tnle ioh a on h s t ni h u u te ahh ui swlpn w i cn er st n t m ut i am s e av e n l c a ad t e om nyh cm ay ed trs. f oe t o pn neso ae e i 2 Where to Look . Ohrnoa r hs i ida m y e b tpoi vl b aedt iom tn bu t I vt s Teen v ul a b al o rv e a al nco l f ao aot e n o di s e d u e an r i aports f gee,ao,n cs,ai pei s f e s iri ni dci s prpie tf l l ri ad ot hv g r o l a d i l fac lei n. a ai v s ts n s n v uy c m a n a s o I ut C nuat osln it flm y l ps svl b iom tn bu n sy osln C nuat nh id a ao os s a al n rao aot d r ts t s ee s e u ef i cm o i ut fu ssc a sly ecm rsf ii cs,n r m tis ot o m nn syi r ,uh sa rbnh a , ci s ot ad a a rlcs. d r ge a k a le t s w ea s Ohr eor so T pD w ad oo - p reMoen t R su e f o- o n n B tm U Ma t dlg e c r t k i 2 Ma eA a s ad .Ma en &Saeo eSrey hp r . r t nli n 5 4 k ys 7 r tg t hl r tt cats ki k d ag e. H sil o pr nl e Mei rdtr a i t vl e frcdr pr re opaC m a I u s d a a e rn h o m opoeu s eom d t e cd c e a g dg e u e f propait US ehsil h .. tne D r otAl oH ah a a bs t tou etg rg aaosn o am u ts f el C r D t aeh dcm n li vrtn ihw t h a t e a a s an ii m d ar or s rd t u d n ue it US ei l su e a ir t ad sdnh .. c e c e si e b e Poeu Fe f mMei r rcdr isr e l o da ce Identify Proxy Companies 1 What to Cover iccm et syi l m k f t sogscm a b sH w vrsm t e . Dr to pt rt c l aeo h t neto pr l. o ee o em s e i o p ay rer ae , i m ai f ht i lo pr l ei w i a n l gr bsesWhn iccm a b s rnt en g lioc cm a b s xt h h r oo ei ui s n u s ra ae s c e n n n . e deto pr l a o r ae e aaal g daye xh cntiso rae t sm lstfo pn s h h a ats rx vib ,r ul ra t osa ttbodnh a p eocm ai w i cn ca poy le a l l e rn e e e c cm ai. ttydnfn apoia l1 pt tlrx cm ai adhn a o dw ts o pn sSa b i t i prx ty 0 o napoy o pn s n t nr w o nh e r ei g y me ei e e r i l tt oeooro pn s i t m sreathlne ad rcs sR m m etf u o i oh n tf cm ai wt h ote vncaegs n poes . e e broo s n s t e u e he l l e c cm ai t tae e osa d ucsieeuo. o pn sh hv dm ntt scesn xctn e a re i 2 Where to Look . Y ho F ac ao! i ne gr a sh fac la opbc o pn sB l k g ao! i ne Y ho F ac ag gt t i ni dt ful cm ai. yo i n n e e en a a i e on

u a nw pbc o pt ra ye t tn it lt ad o m l d ta e-ae f p ko n ul cm et , hpre lknh e- n cl ne so w bpg o i i o -x i e fh u a o pt r C m et s i . o V n r pr rv e dto m r rad cui n, i lul oensIO )ad ete e Poi s a n e e n aqii sit pbc frg ( s n uX t d a gs so ni t a i fi P , vn rcpaf d g ae o dtf mScre D tC roao. srcn er t ete ail ni bsd n a r euts a opri U e a sa hh u tu n ao i i a tn s c e dt aeoi dtl iom tn bupi ts rusnl i f d gi et sad a bs tfd e idn rao aotra tt p i u n u i , vs r n a n ae f i v e acd g n n n o , eeuvs xcte. i V n r or nt r a bs t totn dtl iom tn bupi ts rus ete u e A o edt aeh cn i e idn rao aotra tt p uS c h a a a s ae f i v e ai l i f d gi et sad xcte. n u n u i , vs r n eeuvs cd g n n n o , i H oe O le Adt ae frdcpol f cm ai, h hnl e cm et s ovr nn a bs opoutrf so o pn sw i i u s o pt r s i a i r e e c cd i . o Develop Proxy Company Analysis (Referred to as Top-Down Analysis) 1 What to Cover ne prpie rx cm ai a i nfdt nxs pso nle ah n. . O c aportpoy o pn s r d te, e ett itaa z ec oe a e e ei h i e y F d pri aiom tni l i t cm ay ky is nsadrtr osuts pri i oe tnl f ao, c d gh o pn e mlt e,n t o e ntci oe tg n ao n r i n u n e s eo y c r t an p n iao-o n nli Iao-o n nli a oe i ot m dl dvl e bsd n l v t dw aa s.n t dw aa s,n vre f e oei ee pd ae o a a p ys p ys vw h s o aaaliom tnTe,ah a iri d wtadi aiom tn n asm tn add ut vib n rao. hnec prsen (i di nl f ao ad s pos de)nl lef i t fe h t nr i o u i i t et m dla b vla dTe a tsa ho a ot e bl . ul cm ai cn e h nr oecn e adt . h dt o er f r ui d e w Pbc o pn s a b e i e ie a c re l n o i e eclnpoy o pn so to esn. it ci i a IOia is n iie t t d a s xeetrx cm ai f w r osF s ah v g nP s mlt ent lh i i t l e r a r, e n eo sf a n c e sm dg e fucsad ugs t t e o pnoe tn pt tl a w r aa zgTe o e er osces n sget h t cm ay pri s o nay r ot nli . h e s ah s ao e il e h yn scn r snsht cm ay rset cn e rh or f oe tnle i Apopc s eod e o it a o pn popc s a b ai su eo pri adtl a a u c c r ao as rset . u (s ko n s n - fn m d tt Scre ad xhne o mso) a ou ete ae b ao nw a a S1ig aeoh euts n Ecag C m ii i dcm nresd y l l i e i i sn s l a o pn pi tl nh g nP iw i i ek ttl m ai f s raots ioy n fu cm ay rroa ci a IO n h ht esoe a en g lt y bui ht adu r o u n c s l nu o t sr te popc tpopcv i et sIdi s, e o pn m sdsretoe tg ioyn o e rset o rseten s r n o g ot cm ay utecb i pri ht ism s i v o. n h i s an s r dtl h popc s int y ut cm ay et oe tg l ad ile o i a e iTe rset wl ol ot e o pn nr pri p n n wli l mt t a. u l a h s i e an a lk y da r a i t cm ay er rer H w vri rv e vl b iom tnht a b ue t e rn h o pn ai ya . o ee t oi s a al n rao t m y e sdo g dg e s l e s ,p d u ef i a p c t e et cm ay oe tg ioy i eo t rh o pn pri ht . e gh e s an s r Hg Lvl pri P n T en oky pri mlt e. i eeO e tg l i le fe oe tg is ns h an a mi an e o F ac g lt e ien om j fac g vn . i ni Mis ns T le f a ri ni eet n n eo mi o n n s CiclrlHs r ien ocn at li l i dri , ctnad u br faet li Tis ioy T le fli lisn u n u tnl ao,n nm eoptn na a t mi ic r c d g ao o i a is erld n l. oe Ohr lt e di nl is nssc a sl ad iruo ar m n snd t Mis ns A di amlt e,uh sa s n d t tn g e et i e. e eo t o eo e si i b e sg O e tg otad tfg ee ioi lpri epne ad tfgee b pri C s n Sai Lvl Hs raoe tg xess n s f l l y an s f n s tc an ai v s n e p yeye m let . o p CiclrlC s sm tocspr e o ot cn at lpoes li Tis ot Et a fotepr n f e li lis rcs na a s i e s h ic r a . C s F w u u te ahl s ah l C m li cs fw . o av o Iom tn xat f mt Popc s f ul C m ai n rao Etc dr h rset oPbc o pn s f i r e o e u i e Maae et Dsus n n A a s oF ac l odi ad eus f pri s ngm ns i so ad nli f i ni C ni n n R sl oO e tn c i ys n a t o t ao A og t r f m tntsetn rv e a ul te ius n f e o pn m n o eio ao, isco poi s qati d cso ot cm ay h nr i h i d iv s i a h s oe tnlrg sad e mlt e ah vdIao o m n o t cagsn er pri apor s n ky is ns ci e.tl cm et nh hne iya ao e eo e s s e t yafac l sl ad rv e sm ht i lahl dt Tifac l o eri ni r us n poi so e ioc cs fw a . h i ni n ae t d s ra o a sn a iom tn a b ue l dtmn g o m c a o pn hdo pn iodro n rao cn e sf i e rin hw uh cm ay a tsedn ret f i un e i ah v t mlt e i ci e. ci eh is nst h vd e e eo a e B ses Tisco poi s fr rh ecpo ot cm ay bsesi l i ui s h etn rv e aal i dsrtn f e o pn ui s n u n n s i d i c y ii h s n , cd g iom tn but m re tgt d es,rdc ,tt ycn at lpor s n rao aot e a ta e d iaepout sa g,li lis rg s f i h k,r e s s re ic r a e, sl ad a en,o pt r m nf ti ,e br m n I,oe m nr u tn a s n m r tgcm et s au c rgrm u e et P gvr ete li , e ki i , o a un i s , n g ao

e p ye, ci sadi ao. h cn at la itsetn a hltdtmn m l esf ii,n lgtnTe li li dt nh sco cn e o e ri o a le t t i i ic r a a i i p e e t l g ad o p xy f e li lis rcs a w l s n sei r u t y h e t n cm l i ot cn at lpoes s e a ay pci e lo e nh e t h ic r a , l f ga r c hrl t cm ay a f e.t a ao e ih cr nnm eoe p ye, u e h o pn hsa dIm y l dtl e u etu br fm l es ds e c s at r o e p yeye,n f ii se. m l e t sada le is o p ci s z t F ac letn Tisco,t e n ot dcm n poi s e idi ni i ni Sco h etnat ed f e ou et rv e dtl fac l n a i s i h h , d ae n a iom tni l i t cm ay bl c setno e te et n s t etfah n rao, c d gh o pn a ne he i m s t n ad te nocs f i nu n e s a ,c am , am fw . h nm eoya oht i la aaalit popc s ivrb l sTe u br fer fioc dt vib nh rset wl a y o s s ra a l e e u l y cm ay o pn. 2 Where to Look n rao aotra cm ai im rdfu tfdhtul oe. ete . Iom tn bupi t o pn ss oe icloi t pbc nsV n r f i ve e f t n a i i u cpadt ae ( c a t s le bl )a b ue l r ctg ea dtl i l i t aila bsss h sh ei d e w cn e sf f l an cri e i n u n h t a u o s t o uo o i tn as c d g e , cm ayoni dtadn rao aot ni rud (g nm eorud, oe rsd e o pn f d g a n iom tn buf d gonse . u br fonsm nyae pr u n e f i u n ., i rudsl t psm ny a aos Te wl l poi nnsei i i t s f cm ay on,e c d ot oe vl tn) hy iao rv e o- ci n c o oa o pn ee ui . ls d p f da r c s s g aec rud f ni ( l t f ma og er s g,ts g,xas n t e e . t e tahon of d gse e r m n ay t e le t e epni s g, t) a u n ec d o l a a a o a c. H w vrt y rule toedtl iom tn bua o pnoe tg ioyr ui t o ee h a nkl o fr e idn rao aot cm ay pri ht ,e i gh , e e i y f ae f i s an s r q r e n i oa ro aeooa ts a f mo esu e. n vt thv tl t h dt r t ror s n o ce i a o h c V n r pr ete e uX t V n r or ete u e uS c S CE gr nn rv e ole ceso ui sadi ni iom tni l i S C E daO le Poi s nn acstbses n fac l f ao, c d g E i d i n n an r i nu n fnsf m rt n 0 0 g blo pn s ig, r oeh 3, 0 l acm ai. l o i a 0 o e Pr nl e ok ot t d i a ad xesnh flw o a b altsa reat e oaN t rs C n ci id l n epr it id h m y e b o hr e vn s w a n v us t ee e e l iom tn n rao. f i C lC n c os ecn cn eeuvs t e rx cm ai tr usiom tn o ot t C ni rot tg xcte at poy o pn so e et f ao d a d ai i h e q nr i w i hs oyten ae ullaaal R cgi t t e icriiom tnht h h a ntebe m d pbc vib . eoneh t r s ea n rao t c iy l e z ahe tn f i a t s i ida wl e oeesi ltsa ad r a a eoaportqetn t t i h en v ul ib m rl le o hr n pe r stfprpie usosh wl e di s l /s k y e pe a i a l r u iadi ako l g, iotvrep gh bud opo soas ad ray e ln di nlnwe ewt uoe t i t ons frf s nl n pi c. st t o d h sp n e ei i m v As cni r htesn t s eeuvs olhv thl(ro ad r a yur us l os ew ar osh e xcte w u aeo e o nt n pe r ore et o d a e i d p ) pe q acri l A a t e, ictatt e n tcl oetprahoh k d fa cod g . tli sis rcl a a e i , nsapoc tts i odt ny lm t i o k i ha h i n a clco,ai llw e dan wtpt tlo pt r oetnpr u r hn elg i o nacm et s li t ay c i h ei i . o Compare and Rationalize Bottom-Up and Top-Down Approach 1 What to Cover neh poy o pn aa s icm lecm a t r usoh btm u . O c t rx cm ay nlis o p t o pr h e l tt oo -p e ys e, e e st e t fac l oec a dn t 1 f e rcs Iet w e sni nvrne xt L o f i ni m dlr t is p ot poes dnf hr i i ataac eis oko n a ee e h . i y e gf c i s. r d e ec it fl i a a: i r nenh oo n r s vg e lw g e K y is ns e mlt e eo Cicli poes li t lrcs na r a Sai l e tfge l f vs n U dri csasm tn ney g ots pos ln u i C s tr c ec mlt e ot o e h ah is n s a eo T eo eisl i tbg a s m n e T eo rf bi i tpot iy m i l a t As cni r t fac l oesolb aj t bsd nh l rns n osr tn f mt l os eih i ni m dlhu e d s d ae o t e n g ad be aosr h o d f en a d ue e ai vi o e poy o pn aa s. radi ark o pt tlocr i nfdhthu b adesdn rx cm ay nli We di nlss r o nacne sd te t sol e dr e i ys e t o i ei n ei i a d s o epr ot bses l ? ei a apc ot bses l aa ad ae d s et(r t r as f e ui sp n R v w l set f e ui sp n gi n m k aj t n o h t h n a e l s h n a n um s se adi ai u bf ei ln t dcm n R m m et t iia iri poes n t ek di nl pt e rfazgh ou et e e brh tss ntav rcsadh t n ) o ni o i e . ah e te e

fac l oewl rbb ne tb ri d ee lm s e rised f r i b pt tl i ni m dl ipoal edo een svr t e bf et r yo e e y o na n a l y fe ai o i a r vw ei i et s n sr v o. 2 Where to Look e r akoh w ri vro ot bses l adi ni m dln dt . R f bc tt ok g e i f e ui sp n n fac l oead a e e n sn h n a n a a gt r f mt poy o pn aa s. h i oa rhu ao ec ot m m e oh/ r a e dr h rx cm ay nli Ten vt sol l r h ut e br fih he o e ys n o ds a o s se pr nle ok i qetn o cne s e oant r wt usos rocr . s w h i n Sa Ti hr h e s

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