***Lifetime Learning Gross Revenue Projection***
DISCLAIMER The following projection contains conclusions that some may view in a positive or negative manner. This projection is based on statements from management, information from Lifetime Learning, conversations with school principals, and assumptions about how a population of students will perform in the future. The author has not verified any of this information. Some of this information is unverifiable. Due to the forward-looking nature of this projection, the conclusions drawn may be false. UNDER NO CIRCUMSTANCES SHOULD ANY INVESTOR BUY OR SELL TSIG STOCK BASED ON THIS PROJECTION
According to the 11/18/99 PR, 700 schools with an average enrollment of 845 students have registered to participate in the MyMusicCard fundraiser. Although the company specifically stated that other schools may be participating without registering, those schools will be disregarded in this analysis. By ignoring these other schools participating, this will compensate for assumptions that are too optimistic.
No information is available on whether the registered schools are participating on a school-wide basis or an organizational basis (i.e. band). I am going to assume that half (350) of the registered schools are participating on a school-wide basis, and half on an organizational basis with 100 students in the organization.
For the schools participating on a school-wide basis, I assume that 75% of the students participate and sell 4 cards apiece. Lifetime Learning says that the average kid will sell about $40 of goods apiece.
For the schools participating on an organizational basis, I assume that the entire membership of the organization (100 students) sells 4 cards each. Summary is below.
*****School-wide participation*****
350 schools x 845 students/school is 295,750 students
75% of the kids participate (.75 x 295,750 = 221,812 students)
each student sells 4 cards (221,812 students x 4 cards/student is 887,248 cards)
TSIG receives revenues of $4.50 per card (887,248 cards x $4.50/card is $3,992,616)
Card revenue is $4.0 million
*****Organizational participation*****
350 schools x 100 students in the band, club, etc is 35,000 students
all members sell 4 cards each (35,000 students x 4 cards/student = 140,000 cards)
TSIG receives revenues of $4.50 per card (140,000 cards x $4.50/card = $630,000)
Card revenue is $0.6 million
Total card revenue is $4.6 million
For those who would like to discount these numbers:
by 10%: $4.14 million
by 20%: $3.68 million
by 30%: $3.22 million
by 40%: $2.76 million
by 50%: $2.30 million
Invitation to Rebut The preceding information was posted for the purpose of stimulating debate and discussion. Please respond if you disagree with any of the assumptions made above. Please do not wait until the next quarterly report to tell me I was wrong. By that time, everybody-even Pedro-will know I was wrong. The tricky part is to make accurate projections in advance of the events actually occurring. Nobody is tuning in into the weather tonight to find out if it rained 3 months ago.
Regards, Suzanne |
