BUSINESS PLAN

Jamiga Global Limited

(A Furniture Manufacturing Company)

March, 2021
0
 TABLE OF CONTENT

Content Page number

Executive Summary 2
Introduction 4
Product and Services 7
Industry and Market Analysis 9
Competition 11
SWOT Analysis 12
Operations Plan 13
Marketing Plan 19
Management Plan 21
Financial Plan 24
Key Assumption 24
Cost Estimation and Projection 25
Financing 28
Revenue Projections 28
Cashflow Analysis 30
Breakeven Analysis 31
Projected Income Statement 32
Projected Statement of Financial Position 33
Projected Cash Flow Statement 34
Ratio Analysis 35

1
EXECUTIVE SUMMARY
Jamiga Global Limited is a furniture manufacturing and retailing company that
will offer furniture that is comfortable and well matched for today's active life-
styles in homes and offices. We make home furniture, office furniture, hotel
furniture etc. Our products will be primarily made by local skills and technology,
highlighting the talent and high design sense of our craftspeople.

We will offer our customers and client a wide range of products from living
room furniture, bedroom furniture, office furniture, dining furniture, kitchen
furniture, outdoor furniture, doors & windows furniture and other after sales
services.

There is an increased demand for better housing with bespoke furniture in

urban areas. This has made the furniture making industry more attractive and
has spurred an interest amongst professional furniture makers to exploit the
opportunities of the industry. We have identified our target market and classified
them into households, corporate organisation, hotel, government offices, schools’,
churches and other religious centres.

We will compete directly with major furniture manufacturing companies in our

market and they include; wood factory Ltd, Jam & Bay Furniture, G.U.Ebeco
Industries Limited, Zeberced Furniture Ltd, iDEUS Furnishing and Crea Furniture.
And we expect to compete indirectly with other major brands outside or area
of operation and other small and medium scale furniture manufacturers. We will
edge our competitors by offering one-stop shop furniture approach, excellent
customer service and maintaining an online store.

2
We will maintain a highly experienced management team and manufacturing
personnel that will ensure full realization of our goals and objectives. The team
will be led by the Managing Directors and to be assisted by the Production
Manager, Finance Manager, and a Sales and Marketing Manager.

To realise our goals, we are seeking N40,000,000 investment facility from

interested investors added to the promoter’s equity contribution of N3,000,000,
this will enable us acquire furniture manufacturing assets and address necessary working
capital need.

With these resources, we anticipate a revenue of about N180 million within

three years and we expect this to grow at the rate of about 25% annually for a
5 years period. In addition, we will attain an operational profit of about N76
million within three years. As a result, we are sure to attain breakeven in the
first quarter of the third year of operation.

Operational Performance

160,000,000

140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

-
1 2 3 4 5

Revenue Operating Profit

3
1.0 INTRODUCTION

1.1 Business Overview

Jamiga Global Limited is a furniture making and retailing company incorporated
in 2019, with corporate office at Suit 11 Evergreen Plaza Durumi, Abuja, and its
factory located at Linksman Street Deidei Light Industrial Layout Abuja. Jamiga
is a furniture manufacturing and retailing company that will offer furniture that
is comfortable and well matched for today's active life-styles in homes and
offices. We make home furniture, office furniture, hotel furniture etc. Our
products will be primarily made by local skills and technology, highlighting the
talent and high design sense of our craftspeople.

Because of the passion for the furniture business, Victoria Ene Ghantous and
Gaby Ghantous founded Jamiga Global Limited. The customer demographics,
market and competitive situations in Abuja reinforces the fact that the business
will succeed. Jamiga Global Limited will provide expertise and quality in the
furniture supplier market while meeting the demanding organizational,
scheduling, and quality needs of its client and customers.

1.2 Vision
To be number one furniture company in Nigeria.

1.3 Mission
Is to make our client and customers living better.

1.4 Objectives
The company objectives are:

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▪ To be a top furniture maker and supplier to homes, offices, hotels and
schools in our market.
▪ To create a loyalty programme for our customers that make them refer
customers to us.
▪ To provide quality products at reasonable prices with exemplary services.
▪ Constant yearly growth in sales.
▪ To have a showroom within in a prominent retail space.
▪ To drive awareness and build sales through mentions in both local and digital
media.

Our Critical Success Factor

Jamiga Global Limited is uniquely qualified to succeed for the following reasons:

▪ Maintaining a healthy and adequate working capital to address our material

need and other obligations.
▪ Our location is in a high-volume area with little direct traffic, and will thus be
highly convenient to significant numbers of passers-by each day.
▪ The management team has a track record of success in the furniture
business.
▪ The furniture retail business is a proven business and has succeeded country
wide throughout Nigeria.
▪ Outstanding customer care.
▪ The Federal Government ban on the importation support growth in the local
furniture manufacturing industry.

5
The Value Proposition
To give our customer the very best products through the use of state-of-the-
art technology, and impeccable manufacturing processes. To give excellent
customer service at all times so that we may earn their trust and loyalty that
encourages repeated sales. To provide an excellent, flexible and workable
distribution network for furniture wholesaling and retailing.

6
2.0 OUR PRODUCTS AND SERVICES

Jamiga Global Limited offers the following products and services:

▪ Living Room Furniture:

Lounges-Sofas, Sofas & Sectionals, Lounges-Sofas, Settees, Sofa Beds, Coffee
Tables, L-Shaped-Sofa, TV Stands & Cabinets, Entertainment-Units, Recliner
Sofa, Leather Sofa, Fabric Sofa, Chaise Lounges, Custom Upholstery, Arm Chairs,
Wing Chairs, Cafe/Bar Chairs, Rocking Chair, Bean Bag Chairs, Ottomans,
Footstools, and Poufs.

▪ Bedroom Furniture:
Beds, Dressers, Bedroom Mirrors, Wardrobes, Daybeds, Bedroom Benches,
Bedroom Stools and Chairs, and Kids' Furniture.

▪ Office Furniture:
Office Desks, Office Tables, Office Chairs, Conference Tables, Boardroom-Tables,
Office Cabinets, Cabinets-Storage, Office Workstations, Office Partitions,
Partition-Screens, Drawers & Shelves, and Filing Cabinets.

▪ Dining Furniture:
Dining Tables, Dining Chairs, Dining Sets, Bar Stools, Sideboards & Buffet.

▪ Kitchen Furniture:
Kitchen Cabinets, Custom Kitchens, and Built-In Kitchens.

▪ Outdoor Furniture:
Outdoor Seating, Outdoor-Chairs, Outdoor Dining Set, Swings & Hammocks,
Canopies & Umbrellas, and Outdoor Shades.

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▪ Doors & Windows:
Entrance Doors, Interior Doors, Security Doors, Door Handles, Locks, Bi-Fold
Doors, and Partition Screens

▪ Services:
Technical services, after sales services and transportation services.

In addition, our products are of unique quality and world class styles with an
uncompromising commitment to quality, flexible designs and shorter lead time.

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3.0 INDUSTRY AND MARKET ANALYSIS

Industry Analysis
The furniture making industry is becoming more popular globally. There is an
increasing demand for reputable branded products to suit the growing need of
bespoke housing decoration and office spaces amongst other needs. It is a
thriving industry in Africa owing to the growing economy and arise in the
demand for urban settlement. The furniture market in Nigeria is large and highly
lucrative however, it is relatively untapped as it is dominated by a few large
entities. This outlook suggests investment opportunities for new players

There is an increased demand for better housing with bespoke furniture in

urban areas. This has made the furniture making industry more attractive and
has spurred an interest amongst professional furniture makers to exploit the
opportunities of the industry. In a bid to sustain this trend, the industry is
adopting a mechanized approach to production as opposed to traditional
methods

Furniture is constantly being demanded across all sectors of the economy,

irrespective of their social status. Individuals are also increasingly more
appreciative of aesthetically pleasing spaces. The Federal Government's ban on
imported furniture is boosting the demand and sale of locally made furniture

Market Trends
Changes in disposable income, consumer sentiment, ever changing trends and
of course the rate of homeownership is major growth drivers for the Furniture
Manufacturing Industry. The massive rise in consumer confidence has also

9
contributed in helping the industry experience remarkable growth, but uneven
performance in these drivers has led to slightly constrained revenue growth for
the Furniture Manufacturing industry.

As part of marketing strategies, furniture manufacturing companies now ensure

that they have showrooms at different locations where they display their home
and office furniture. It is a strategy that helps them increase sales and income
for their business.

Lastly, in recent time, the furniture manufacturing landscape has seen

tremendous changes in the last 20years; it has grown from the smaller carpenter
workshop to a more organized and far-reaching massive furniture making
factory. This trend has benefited them in such a way that they can comfortably
sell their furniture nationally.

Target Market
We have conducted our market research and feasibility studies and we have
ideas of what our target market would be expecting from us. We are in business
to manufacture a wide range of furniture to the following groups of target
audience:
▪ Households
▪ Corporate Organisation/Offices
▪ Hotels
▪ Government Offices
▪ Schools
▪ Churches and other religious centres

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4.0 COMPETITION

Our clients and customers are expected to patronise our products based on
traditional factors such as Price, Quality and Availability.

We will compete directly with major furniture manufacturing companies in our

market and they include:
▪ The wood factory Ltd
▪ Jam & Bay Furniture
▪ G.U.Ebeco Industries Limited
▪ Zeberced Furniture LTD
▪ iDEUS Furnishing
▪ Crea Furniture

And we expect to compete indirectly with other major brands outside or area
of operation and other small and medium scale furniture manufacturers

One of our business goals is to make Jamiga Global Limited a one-stop shop
furniture manufacturing company for both household and corporate
organizations. Our excellent customer service culture, online store, showroom,
various payment options and highly secured facility will serve as a competitive
advantage for us.

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5.0 SWOT ANALYSIS

The SWOT analysis captures the key strengths and weaknesses within the
company, and describes the opportunities and threats facing Jamiga Global
Limited:

Strength
▪ Our strength lies in the experience and qualifications of our team, we have a
team that can produce standard furniture product that can compete
favourably with other brands produced by leaders in the industry.
▪ The latest technological capabilities will be deployed in the production of
our furniture.

Weakness
▪ It might take some time for our product to break into the market and gain
wider acceptance from top profile clients in the industry.

Opportunities
▪ Increased demand for better housing with bespoke furniture in urban areas.
▪ Government policies focused at improving growth in the furniture
manufacturing industry will support our growth objectives.

Threats
▪ Low entry barriers for the market could potentially create an over saturated
market.
▪ Existing companies may lunch price war.
▪ High cost of energy

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6.0 OPERATIONS PLAN

Registration, Licences and Permit

LEGAL REQUIREMENT STATUS FREQUENCY

OF PAYMENT
Corporate Affairs Registration 100% Completed One off

Tax Identification Number 100% Completed One off

SON W.I.P. One off

Insurance Policy W.I.P. Annual

Product Trade Mark W.I.P. One Off

Location
Our corporate office is situated at office at Suit 11 Evergreen Plaza Durumi,
Abuja while our factory is located at Linksman Street Deidei Light Industrial
Layout, Abuja. We will manufacture and distributed from this location to our
target market

Furniture Production Asset

In keeping up with industry trend, Jamiga Global Limited will deploy the
following latest technology, machinery and equipment in the production of its
furniture:

SN Equipment Qty

1 Choping Saw Kit Toolbox 2

2 Bosch Mitre Saw - GCM 12 GDL Professional 1

3 DEWALT Table Saw for Jobsite, Compact, 8-1/4-Inch (DWE7485) 1

4 CNC Wood Router 2

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5 Juki Industrial Sewing Machine 4

6 Wood CNC Router Engraving Machine With 4.5kw spindle 2

7 DEWALT 20V MAX XR Brushless Combo Kit, Compact 4-Tool 2

(DCK483D2)
8 3M Random Orbital Sander – Pneumatic Palm Sander – 5” x 3/16” 2
Diam. Orbit – Stikit Disc Pad – For Wood, Composites, Metal –
Original Series, 20317
9 WORX WX820L 20V Multi-Sander 2

10 Makita RT0701CX7 1-1/4 HP Compact Router Kit 2

11 RIKON Power Tools 20-600H 6" Benchtop Jointer with Helical 2

Cutter head
12 DEWALT Thickness Planer, Two Speed, 13-Inch (DW735) 1

13 CRAFTSMAN V20 6-1/2-Inch Cordless Circular Saw Kit 2

(CMCS500M1)
14 Fuji Industrial Spraying and Finishing Equipment 1

15 A bevel-up low-angle jack plane 2

16 Wood Chisel Tool Sets 3

17 Horizontal Square Stainless Steel Multi-Function Carpentry 4

Squares
18 Dovetail Saw 4

19 Design software 1

20 Computers 2

21 20kva Mikano DIESEL Generator 1

22 Delivery Van 1

23 Other Tools & Equipment 1

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Proposed capacity and technology

Based on our projection we expect Jamiga Global Limited to operate in the

following capacity within a 5 years period:

Year Operating Capacity (%)

1 50%

2 60%

3 70%

4 80%

5 90%

The factory will on a single shift of 8 hours a day, and for 300 days a year.
However, Capacity utilisation has been projected at 50% of installed capacity in
the first year.

Furniture Manufacturing Process

Jamiga Global Limited furniture manufacturing process aims to guarantee the

highest quality standards for furniture and ensure a quality that is in accordance
with consumer preference. Our basic process are outline in the flowchart below:

15
 Design & Review
(Furniture development process
whereby a design is evaluated
against its requirements)
Pattern Making
(Enable companies to create
variants and develop a complete
range of furniture from a single
prototype)
Splitting Cutting
(Here, the wood will be cut and
split according to size product
that was needed with a CNC
machine or cutter saw)
Sanding & Assembling
(Obtain the components that
have been refined with the same
size before furniture is a
assemble of into finished goods)
16
Prototyping
(furniture prototype is a critical
step for the entire design and
production)
Marker Making
(Complex markers are generated
to achieve an accurate estimate
of how much fabric is needed)
Planning & Drilling Process
(Small block would then be sent
to plane Machine or thicknesses
to get final result with the
smooth surface without line saw.
After planning, the component is
moved to drilling machine or pen
machine to get construction.)
Finishing & Packaging
(Layering wood surface with the
purpose to making it beautiful
and packaged for delivery to
warehouse, showroom and client
location)
Distribution Channel Flow
The movement of our product from our factory/warehouse/showroom to the
final consumer follows the distribution channel in the diagram below, right up
to the final customer, and the movement of payment in the opposite direction,
right up to the original producer or supplier.

Manufacturer

Factory/Warehouse

Showroom End customers

For all individual, commercial, government, and retail customers, delivery will be
done by our delivery vans. Over time, as the company’s customer base and
delivery requirements expand, additional trucks will be acquired.

17
Quality Control
Jamiga Global Limited operations will be dedicated to maintaining the highest
standards of product excellence. This will be achieved through a rigorous quality
control program. The goal will be to meet the requirements and needs of all
customers, as well as to ensure that all of our furniture is consistent, reliable,
and durable.

For Jamiga Global Limited, quality control and quality engineering are involved
to develop systems to ensure products meet or exceed customer requirements.
It includes a precise awareness of the quality of the raw materials, machinery,
input products such as spray chemicals, paints and other components; services
related to production; and management, production itself, delivery and
inspection processes. A cross-functional approach will be employed at each
stage of furniture manufacturing from raw materials to finished products
delivered to customer locations.

The company’s quality control team will monitor and audit every stage of
production and delivery. the quality control team will be tasked with the
responsibility to identify any deficiencies or inadequacies.

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7.0 MARKETING PLAN
We are committed to communicating our "Quality" position to the market, by
maximizing sales through aggressive marketing, penetrate the furniture
industry and increase our targeted market.

Marketing Strategy
To achieve our objectives, we will engage the following strategies:
▪ Place adverts on both print (newspapers and magazines) and electronic
media platforms.
▪ Leverage on the internet and social media platforms like; Instagram,

Facebook, twitter, YouTube, Google + etc to promote our brand.

▪ Distribute our fliers and handbills to our target market.
▪ Contact corporate organizations, media outlets, major distributors by
approaching them and informing them of Jamiga Global Limited furniture.

Promotional Strategy
To enhance our marketing and advertising activities, Jamiga Global Limited will
engage in the following promotional activities:

▪ Special offers: we will offer special quantity discount to secure new

customers and keep driving existing customers back to us. Including the use
of ‘‘five the price of four’’ can also be used to raise profile and secure short
term increases in sales.
▪ Marketing Materials such as print brochures, catalogues and business cards
will be produced and distributed to business and our target market.
▪ Branded Promotional Gifts: we will be giving away functional branded gifts
to our customers as an incentive for their patronage.
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▪ After-Sale Customer Surveys: this will serve the dual purpose of promoting
our company as one that cares about what our customer thinks and one that
is always striving to provide the best service and product.

Pricing strategy
Jamiga Global Limited will maintain pricing on its products that will always tend
to be at, or below the prices charged by other companies in Abuja marketplace.
Other elements of the company’s pricing strategy will include:

▪ Industry obtainable,
▪ Local competition; which is likely to dictate what people will be prepared to
pay for our products.
▪ Imaginatively pricing; will be used as a marketing tool to try and iron out
peaks and troughs in demand or and to reach particular target market.
▪ Offer pricing discounts for those customers willing to commit to taking
delivery of large volumes on a continuing, long-term basis. This will translate
into a major cost savings for large volume customers, and will induce them
to stay loyal.

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8.0 MANAGEMENT PLAN

Management Structure
With our vision of building a standard furniture manufacturing company, we
have in our team highly qualified personnel with experience in the furniture
industry that will help us realise this objective by driving the following
underlisted functions:

▪ MD/CEO
▪ Finance and Admin Manager
▪ Sales & Marketing Manger
▪ Production Manager

Management Team Summary

Managing Directors/General Manager

Victoria Ene Ghantous and Gaby Ghantous will head the management team and
will be responsible for giving directions for the business, they will create,
communicate and implement the organization’s vision, mission and overall
objectives. They have over 5 years’ experience working in the furniture making
industry.

Production Manager
The production manager will be saddled with the responsibility of factory
production goals, including putting in place and implementing systems and
procedures to ensure operations of the factory meets production plans, product
quality, and cost standards. In addition, they will ensure complete compliance
to prescribed Safety, and quality including SON requirement. They will report

21
directly to the General Manager and serve as a key member of the leadership
team.

Finance Manager
The finance manager will be responsible for the smooth running of HR and
administrative tasks of the organization. He will also be responsible for
preparing financial reports, budgets, and financial statements for the
organization including administering payrolls and handling all financial
transactions for the company. He will also ensure compliance with all tax
regulatory authority.

Marketing Manger
The marketing manager will serve has our sales representative. His
responsibilities included sales and promotion of our product, developing new
market for our product while sustaining the exiting market, he ensures timely
delivery of orders to our client and customers.

Production Personnel Summary

SN Description Nos.

1 Woodworkers 2

2 Arm makers 2

3 Upholsterers 2

4 Assemblers 2

5 Hand carvers 2

6 Carpenters 2

7 Furniture finishers 2

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 8 Cabinet makers 2

9 Product testers 2

The above production personnel will solely be involved in the manufacturing of

furniture.

Organisational Chart

MD/CEO

Production Manager Finance Manager Sales/Marketing Manager

Quality Control Administration Sales

Production Account Marketing

Workers/Machine
Operators

Budget Promotion

Maintenance

Human Resource Demographic

Mapping
Cleaners

Payroll
Security

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9.0 FINANCIAL PLAN
Key Assumptions
Our financial forecast was made considering the underlisted assumptions:

S/N Description Value

1. Inflation rate (%) 17

2. Company tax rate (%) 20

3. Annual Revenue Growth Rate (%) 20

4. Annual Expenses Growth Rate (%) 50

5. Annual Depreciation charge (N) 2,575,000

6. Working Capital (in Days)

Receivable 2

Payable 7

Inventory 14

7. Projected Investment Capital (N) 40,000,000

8. Promoters Equity Investment (N) 3,000,000

9. % of Asset to Investment Capital 56

10. % Working Capital to Investment Capital 44

11. Opening Inventory provision (in Months) 6 – 12

12. Opening working capital provision (in Months) 6 – 12

13. Seasonal monthly Sales Variance 75% - 100%

24
Cost Estimations & Projections
The cost estimate below provides an overview of the projected cost required
for furniture manufacturing and working capital.

Fixed Asset (Tangible asset)

SN Equipment Unit Unit Price Total Source of

N N funding
1 Choping Saw Kit Toolbox 2 70,000 140,000 Investor

2 Bosch Mitre Saw - GCM 12 1 750,000 750,000 Investor

GDL Professional
3 DEWALT Table Saw for 1 400,000 400,000 Investor
Jobsite, Compact, 8-1/4-
Inch (DWE7485)
4 CNC Wood Router 2 50,000 100,000 Investor

5 Juki Industrial Sewing 4 200,000 800,000 Investor

Machine
6 Wood CNC Router 2 1,000,000 2,000,000 Investor
Engraving Machine With
4.5kw spindle
7 DEWALT 20V MAX XR 2 350,000 700,000 Investor
Brushless Combo Kit,
Compact 4-Tool
(DCK483D2)
8 3M Random Orbital Sander 2 117,000 234,000 Investor
– Pneumatic Palm Sander –
5” x 3/16” Diam. Orbit –
Stikit Disc Pad – For Wood,
Composites, Metal –
Original Series, 20317
9 WORX WX820L 20V Multi- 2 100,000 200,000 Investor
Sander
10 Makita RT0701CX7 1-1/4 2 220,000 440,000 Investor
HP Compact Router Kit
11 RIKON Power Tools 20- 2 500,000 1,000,000 Investor
600H 6" Benchtop Jointer

25
 with Helical Cutter head
12 DEWALT Thickness Planer, 1 800,000 800,000 Investor
Two Speed, 13-Inch
(DW735)
13 CRAFTSMAN V20 6-1/2- 2 150,000 300,000 Investor
Inch Cordless Circular Saw
Kit (CMCS500M1)
14 Fuji Industrial Spraying and 1 1,200,000 1,200,000 Investor
Finishing Equipment
15 A bevel-up low-angle jack 2 85,000 170,000 Investor
plane
16 Wood Chisel Tool Sets 3 30,000 90,000 Investor

17 Horizontal Square Stainless 4 32,000 128,000 Investor

Steel Multi-Function
Carpentry Squares
18 Dovetail Saw 4 40,000 160,000 Investor

19 Design software 1 250,000 250,000 Investor

20 Computers 2 150,000 300,000 Investor

21 20kva Mikano DIESEL 1 4,000,000 4,000,000 Investor

Generator
22 Delivery Van 1 5,500,000 5,500,000 Investor

23 Other Tools & Equipment 1 338,000 338,000 Investor

24 Existing furniture 2,500,000 2,500,000 Promoter

production equipment
25 Office furniture and 500,000 500,000 Promoter
equipment
23,000,000
Total

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Working Capital

S/N Description Duration Amount Source of

(N) Funding

Direct Cost
1. Direct Cost of raw materials 9 months 12,000,000 Investor
2. Direct Labour Cost 12 months 2,880,000 Investor
Total (a) 14,880,000

Operating Expenses
3. Marketing & Publicity 3 months 230,000 Investor
4. Salaries & Wages 6 months 1,140,000 Investor
5. Rent 1 year 2,000,000 Investor
6. Utilities 6 months 500,000 Investor
7. Repairs and Maintenance 9 months 600,000 Investor
8. Admin expenses 3 months 650,000 Investor

Total (b) 5,120,000

Grand Total (a+b) 20,000,000

Total Cost of the Project

S/N Particulars Sub Total Total

(N) (N)
1 Fixed Capital

Furniture manufacturing machinery and

equipment 20,000,000 23,000,000
2 Working Capital
Direct cost 14,880,000
Operating Expenses 5,120,000 20,000,000

3 Total cost of the Project 43,000,000

27
Financing
This business will be financed by investors and owner’s contribution. The
investors contribution will be sourced from interested entities or individuals,
while the promoters will contribute to the project from the existing asset and
personal savings. As a result, our capital structure will take the following form:

S/N Particulars Amount %

(N)
1 Investor funding 40,000,000 93

2 Promoters contribution 3,000,000 7

Total Investment 43,000,000 100

The investment funds will be repaid based on agreeable terms by the promoter
and the investors.

Revenue Projections
We will generate revenue from the sales of the following furniture:
▪ Living Room Furniture
▪ Bedroom Furniture
▪ Office Furniture
▪ Dining Furniture
▪ Kitchen Furniture
▪ Outdoor Furniture
▪ Doors & Windows Furniture
▪ Add on service

28
Our pricing of these product will be competitive enough to generate enormous
sales to cover our cost of production, operating expenses, meet our obligations
to our creditors and make a decent profit.

Revenue Projection Chart

160,000,000

140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

-
1 2 3 4 5

Total Cost Projection Chart

70,000,000

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

-
Year 1 Year 2 Year 3 Year 4 Year 5

Direct Cost Operating Cost

29
Cashflow Analysis

Jamiga Global Limited expect its cashflow at positive region in its first year and
this position will continue into the second year and beyond. With a steady and
healthy growth in our revenue and efficient cost management measure, we
project an annual growth of 80% to 100% in our yearly cashflow balances for
the projected period of operations.

Our cash operating cycle, and each of the elements in the cycle, will be managed
to ensure that the investment in working capital is not excessive nor too small.
Cadence Global Cinema will adopt an aggressive working capital policy by
keeping our working capital at a minimum, in order to increase our profitability
and have sufficient liquidity to meet our payment commitments as they fall due.

Cashflow Highlights
80000

70000

60000

50000
THOUSAND

40000

30000

20000

10000

0
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

-10000

-20000

-30000

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Breakeven Analysis

Jamiga Global Limited will reach breakeven in the first quarter of its third year
of operation. This will occur when the project pays back the total investment of
N43,000,000. To determine the breakeven, we adopted the Payback method of
Investment Appraisal to ascertain our breakeven point considering our yearly
cash inflows and cumulative end of year cash position as shown in the table
below:

Year Cashflows Cumulative Cash

Position at the end of
the year
(N) (N)
0 (43,000,000) (43,000,000)
1 16,255,616 (26,744,384)
2 20,566,389 (6,177,995)
3 41,778,369 35,600,374
4 58,768,288 94,368,662
5 67,392,893 161,761,555

The project payback period is thus:

2 + (6,177,995/41,778.369) X 12

2 + 1.77

2 years 2 months

The PBP is approximately 2 years 2 months

31
Projected Income Statement

unit Year 1 Year 2 Year 3 Year 4 Year 5

'000 '000 '000 '000 '000

Revenue

Sales Revenue ₦ 30,000 60,000 90,000 120,150 150,188

Total Revenue ₦ 30,000 60,000 90,000 120,150 150,188

Direct Costs ₦ 16,880 21,944 29,624 41,474 62,211

Gross Profit ₦ 13,120 38,056 60,376 78,676 87,976

Salaries and Wages ₦ 2,280 2,736 2,736 3,283 3,283

Marketing & Publicity ₦ 230 253 304 334 351

Rent ₦ 2,000 2,000 2,400 2,400 2,400

Training ₦ 200 240 288 317 333

Utility ₦ 1,000 1,200 1,440 1,728 1,814

Repairs and Maintenance ₦ 800 880 968 1,065 1,171

Insurance ₦ 200 210 221 232 243

Audit Fees ₦ 200 200 300 300 300

Admin Expenses ₦ 1,300 1,430 1,502 1,652 1,734

Depreciation ₦ 2,575 2,575 2,575 2,575 2,575

Operating Profit ₦ 2,335 26,332 47,643 64,791 73,772

Interest Expense ₦ - - - - -

Profit Before Tax ₦ 2,335 26,332 47,643 64,791 73,772

Taxation ₦ 467 5,266 9,529 12,958 14,754

Profit After Tax/Net Income ₦ 1,868 21,066 38,114 51,833 59,017

32
Projected Statement of Financial Position

unit Year 1 Year 2 Year 3 Year 4 Year 5

'000 '000 '000 '000 '000

Assets

Current Assets

Cash & cash equivalents ₦ 16,256 36,822 78,600 137,369 204,762

Accounts Receivable ₦ 164 329 493 658 823

Inventory ₦ 647 842 1,136 1,591 2,386

Total ₦ 17,067 37,992 80,230 139,618 207,971

Non-Current Assets

Property, Plant and Equipment ₦ 20,425 17,850 15,275 12,700 10,125

Total Assets ₦ 37,492 55,842 95,505 152,318 218,096

Liabilities and Equity

Liabilities

Accounts Payable ₦ 157 175 195 217 223

Tax Payable ₦

Total ₦ 157 175 195 217 223

Non-Current Liabilities

Long Term Loan ₦ 32,000 24,000 16,000 8,000 -

Shareholder's Equity

Equity Contribution ₦ 3,000 3,000 3,000 3,000 3,000

Retained Earning ₦ 2,335 28,667 76,310 141,101 214,873

Total ₦ 5,335 31,667 79,310 144,101 217,873

Total Liabilities & Equity ₦ 37,492 55,842 95,505 152,318 218,096

33
Projected Cash flow Statement

unit Year 1 Year 2 Year 3 Year 4 Year 5

'000 '000 '000 '000 '000

Operating Activities

Net Earnings ₦ 1,868 21,066 38,114 51,833 59,017

Plus: Taxation ₦ 467 5,266 9,529 12,958 14,754

Plus: Interest Expense ₦ - - - - -

Plus: Depreciation ₦ 2,575 2,575 2,575 2,575 2,575

Minus: Changes in Working Capital ₦ (654) (341) (440) (598) (954)

Net Operating Cashflow ₦ 4,256 28,566 49,778 66,768 75,393

Investing Activities

Purchase of CAPEX ₦ (23,000) - - - -

Net Investing Cashflow ₦ (23,000) - - - -

Financing Activities

Equity injection ₦ 3,000 - - - -

Loan taken ₦ 40,000 - - - -

Loan repayment ₦ (8,000) (8,000) (8,000) (8,000) (8,000)

Loan interest ₦ - - - - -

Net Financing Cashflow ₦ 35,000 (8,000) (8,000) (8,000) (8,000)

Cash Generated During the Year ₦ 16,256 20,566 41,778 58,768 67,393

Cash at Beginning of Year ₦ 16,256 36,822 78,600 137,369

Cash at the End of Year ₦ 16,256 36,822 78,600 137,369 204,762

34
Ratio Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Financial Performance Ratio

Return on Capital Employed 6% 47% 50% 43% 34%

Return on Asset 6% 47% 50% 43% 34%

Profit/Sales Ratio 8% 44% 53% 54% 49%

Asset Turnover Ratio 0.8 times 1.1 times 0.9 times 0.8 times 0.7 times

Net Profit Margin 6% 35% 42% 43% 39%

Gross Profit Margin 44% 63% 67% 65% 59%

Working Capital Efficiency Ratio

Average Receivables Days 2 days 2 days 2 days 2 days 2 days

Average Time For Holding Inventory 14 days 14 days 14 days 14 days 14 days

Average Time to Pay Suppliers 3 days 3 days 2 days 2 days 1 days

Liquidity Ratio

Current Asset 108 times 217 times 412 times 644 times 932 times

Quick Ratio 104times 212 times 406 times 636 times 922 times

Debt Ratio

Debt to Equity Ratio 600% 76% 20% 6% 0%

Gearing Ratio 86% 43% 17% 5% 0%

Interest Cover 0 times 0 times 0 times 0 times 0 times

Working Capital Cycle (In days) (In days) (In days) (In days) (In days)

Average Inventory Holding Period 14 14 14 14 14

Average Trade Receivable Collection Period 2 2 2 2 2

16 16 16 16 16

Average Time to Pay Suppliers (3) (2) (2) (2) (1)

Cash Operating Cycle 13 14 14 14 15

35