First cut at a Financial Projection
Assumptions
Capacity 7,250,000 CDs per year
900 CD/hr * 7.5 hrs/shift * 3 shifts *
7 days/week * 52 weeks/yr =7,371,000
Direct cost/CD 0.18 for raw materials and labor
F. Diluted Shares 6,000,000
CD Selling Price $1.30 at low volume, declining at higher sales
Capacity 25% 50% 75% 100%
Units 1,812,500 3,625,000 5,437,500 7,250,000
Selling Price $1.30 $1.25 $1.20 $1.15
Total $Sales $2,356,250 4,531,250 6,525,000 8,337,500
Costs
Royalty 9% 212,063 407,813 587,250 750,375
Direct Costs 326,250 652,500 978,750 1,305,000
Overhead 150,000 175,000 200,000 225,000
Total 688,313 1,235,313 1,766,000 2,280,375
Net Income 1,667,938 3,295,938 4,759,000 6,057,125
Income Tax 33% 550,419 1,087,659 1,570,470 1,998,851
Income after Tax 1,117,518 2,208,278 3,188,530 4,058,274
MKD Share 60% 670,511 1,324,967 1,913,118 2,434,964
Per Share $0.11 $0.22 $0.32 $0.41
Share Price
Multiple 15X $1.68 3.31 4.78 6.09
Multiple 30X $3.35 6.62 9.57 12.17
Multiple 40X $4.47 8.83 12.75 16.23
This shows at 50% capacity MKD should show $6.62 share price with 30X
multiple. Not bad.
There are many unstated assumptions and numbers with no real backup except
for a guess. I have this on excel, so if anyone has better data, if you support it
I will use it and redo the numbers.
I have no idea what the real overhead will be, but lease costs of $30,000
per year, salaries starting at $100,000 per year, and office costs of 20,000
seemed like a good place to start at 25% capacity. I assume the selling price will
drop to attract larger orders, and overhead will rise with higher capacity. I think
this should be conservative.
Any comments?
Ted |
