2. Index
Page
EXECUTIVE SUMMARY
2
KEY DATA
3
FORECASTED INCOME STATEMENTS FROM 2007 TO 2011
4
SUMMARY OF SIGNIFICANT ASSUMPTIONS
5
FORECASTED CASH FLOWS FROM 2007 TO 2011
8
MONTHLY FORECASTED CASH FLOWS FOR 2007
9
WORKING CAPITAL
10
FORECASTED BALANCE SHEETS FROM 2007 TO 2011
11
SIGNIFICANT ASSUMPTIONS OF THE BALANCE SHEETS
12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
14
SWOT ANALYSIS
16
2 / 17
Prospective Financial Statements – Draft March 30, 2007
3. Executive Summary
This business plan, written after the analysis of documentation and information given by the founders is a guide for understanding the starting and managing of the new
business of Dousoeur de Paris LLC.
Dousoeur de Paris is formed to create exceptional new products for the New York City pastry market. Most of the prestigious American Companies are centered in the
financial State of New York City. New York exhibits high level of consummation. The average wages in Manhattan are $93,000 which are 3 times greater than the national
average of $30,413 (sources, North east Mid West Instit. 2001).
The New York City population consumes and spends a lot of their budget in the food sector. The business of French pastry Boutique in Manhattan is to bring and offer a
new wave in the American bakery and coffee shop industry. New York City is the perfect location to implement the business, to answer consumers’ needs and satisfaction,
with easy reach of its target market.
Dousoeur de Paris will develop an attractive interior design with exceptional new brand quality products of French origins; such as Opera, Paris-Brest, Cygne, Religious and
delicious chocolate. The Boutique will present excellent quality in terms of test presentation, service with very competitive pricing and products not produced yet by the
competition ( Ceci Cela, Balthazar, Fauchon etc.). Dousoeur de Paris will be based on Madison Avenue, a shop has been identified in a quality space.
The experience of the French pastry Chef Corine Fina with more than 11 year experience in the industry insures success for Dousoeur de Paris. Ms Fina will be the
Operations Director. The team will also include Romain Bugaje as the Executive Chef. M. Bugaje is very knowledgeable of the French Pastry tradition and has been
recommended by the 4 stars restaurant Movenpick Dream Castle hotel in Paris.
The evolution and growth of sales will be permanent because of the authenticity of the products and their high quality.
To attract new customers, Diane Cepeda, the President, will manage and direct special events for the business. She brings a significant cliental book based on her experience
as a stylist for Chanel for 3 years. Other important client connections will be part of this project with Orlando Cepeda as the Marketing Director who has more than 6 year
experience working for Trump Management.
The evolution of the net income over the 5 next years reveals the controlling of costs, the restriction of the number of employees, the use of outsourcing, specially for special
events (freelance). The profitability is achieved thanks to a gross margin rate of 76% which represents a quote between 3 and 5 points, basically used in pastry business.
The first capitalization enables the Company to insure the reimbursement of the financial debt. And the structure of the working capital provides cash flows from operating
activities.
The Tax and Payroll analysis does not reveal particular risk, except that each founder of the Company is a key man for the success of the business.
The Business Plan shows ambitions of Dousoeur de Paris to become a key actor of New York Pastry business by the professionalism and skills of the team. Margin rates and
costs structure seem relevant and enable to increase the profitability.
3 / 17
Prospective Financial Statements – Draft March 30, 2007
4. Key Data of Dousoeur de Paris, LLC
Name : Dousoeur de Paris, LLC
- Presentation
Subsidiary : None
Dousoeur de Paris is a Limited Liability Company, formed to create
exceptional new pastry products distributed within a luxury
boutique on Madison Avenue and for special events for the
business.
Address: Madison Avenue
Number of Employee : 9 as of December 31, 2007
Activity : Pastry
The business in Manhattan is to bring a new wave in the American
bakery. The New York City population consumes and spends a lot
of money in the food sector.
Year end : December 31
Dousoeur de Paris will develop an attractive interior design, with
limited cost, and 9 employees.
Key Figures 2007-2011
2008
2009
Net Ordinary Income
Net Other Income(Expense)
Net Income
500,000
59,917
-24,192
35,725
800,000
35,960
-16,319
19,641
920,000
51,693
-19,956
31,738
Net Equity
Financial Debt
Cash Flow
135,725
169,444
136,617
155,366
136,111
140,796
187,104
102,778
159,629
193,033
69,444
18,043
243,799
36,111
79,176
5
9
11
14
17
in $
Sales
Number of Employees
2010
The 11-year experience of the French chef, Corine Fina insures
excellent quality.
2007
2011
1,242,000 1,490,400
12,904
77,617
-6,975
-26,851
5,930
50,766
To attract customers, Diane Cepeda will manage special events for
the business by using her significant cliental book based on her
experience as a stylist for Chanel.
- Forecasted Cash Flows Statement
in K$
Cash Flow from Operating Activities
2007
2008
2009
2010
2011
57,172
38,512
53,166
51,748
95,466
Cash Flow from Investing Activities
-190,000
-1,000
-1,000
-160,000
-1,000
Cash Flow from Financing Activities
269,444
-33,333
-33,333
-33,333
-33,333
Cash at end of the year
136,617
140,796
159,629
18,043
79,176
4 / 17
Prospective Financial Statements – Draft March 30, 2007
5. Summary - Forecasted Income Statements
Forecasted Income Statement
in $
Sales
Cost of Sales
Gross Margin
Payroll and Payroll Taxes
Other General & Administrative Expenses
Net Ordinary Income
Net Other Income (Expense)
Net Income
2007
%
Sales
500,000 100%
120,000 24%
380,000 76%
137,140 27%
320,083 64%
59,917 12%
-24,192 -5%
35,725
7%
2008
%
Sales
800,000 160%
192,000 38%
608,000 122%
363,298 73%
572,040 114%
35,960
7%
-16,319 -3%
19,641
4%
2009
%
Sales
2010
%
Sales
2011
920,000 184% 1,242,000 248% 1,490,400
220,800 44% 298,080 60% 357,696
699,200 140% 943,920 189% 1,132,704
429,841 86% 537,351 107% 643,363
647,507 130% 931,016 186% 1,055,087
51,693 10%
12,904
3%
77,617
-19,956 -4%
-6,975 -1%
-26,851
31,738
6%
5,930
1%
50,766
%
Sales
298%
72%
227%
129%
211%
16%
-5%
10%
Evolution of Net Income
Net Income in
K$
Sales in K$
350
150
-50
2007
2008
Net Income
2009
2010
Gross Margin
2011
1,600
1,400
1,200
1,000
800
600
400
200
0
-200
Sales
Evolution of figures
The net ordinary income amounts to $59,917 in 2007 to reach $77,617 in 2011. The net income increases from $35,725 in 2007 to $50,766
in 2011. These increase over the 5 next years from 2007 to 2011 is mainly due to the gathering of the following items:
An increase of sales from $500,000 in 2007 to $1,490,400 in 2011 for retail sales but also for special events,
A limited and variable costs structure that enables to adjust costs to the level of activity,
Hypothesis of a stable gross margin rate to 76%,
Net other expense mainly consists in interest expense and income taxes. The cost of the financial debt decreases from $8,530 in 2007 to
$3,009 in 2011. Income taxes increase from $15,662 in 2007 to $23,842 in 2011 in accordance with the net income before taxes.
See the accountant’s report, significant assumptions, and notes to financial statements
5 / 17
Prospective Financial Statements – Draft March 30, 2007
6. Summary of Significant Assumptions
Sales
Sales forecast have been computed by the management of Dousoeur de Paris.
The Boutique will propose products and services in a range of French tradition.
The Company will also provide specialties for special events (weddings etc.).
Sales amount to $500,000 in 2007, $800,000 in 2008, $920,000 in 2009, and increase to $1,242,000 in 2010 and $1,490,400 in 2011
with the start of the second Boutique.
Gross Margin
Management of Dousoeur de Paris has assessed for 2007 to 2011 a gross margin rate of 76% basically used in the Pastry business.
The gross margin enables to offer competitive prices and increase the profitability.
It is indexed at 76% of the sales over the five years of the Business Plan, and amount to $380,000 in 2007, $608,000 in 2008,
$699,200 in 2009, $943920 in 2010 and $1,132,704 in 2011.
Breakeven Point
2007
2008
2009
Total General & Administrative Expenses
500,000
76%
320,083
800,000
76%
572,040
920,000 1,242,000 1,490,400
76%
76%
76%
647,507 931,016 1,055,087
Breakeven Point
421,162
752,684
851,983 1,225,021 1,388,272
in $
Sales
Gross Margin
2010
2011
The breakeven point is the point at which cost and income are equal and there is neither profit nor loss. It amounts to $421,162 in
2007. It shows that the sales forecast are consistent with the level of costs.
The sales increase over the 3 first years to reach profitability.
6 / 17
Prospective Financial Statements – Draft March 30, 2007
7. Summary of Significant Assumptions
Wages
The wages of the founders have been minimized for the first year and will be adjusted after one year in accordance with the
profitability.
In addition to the founders, Dousoeur de Paris plans on achieving 3 employees in 2007, 7 employees in 2008 and 15 employees in
2011. The increase of employees in 2010 is mainly explained by the start of the second Boutique.
Wages are displayed in the schedule beside:
2007
116,221
20,920
5
in $
Wages
Payroll Taxes
Number of Employees
2008
307,880
55,418
9
2009
364,272
65,569
11
2010
455,382
81,969
14
2011
545,223
98,140
17
General and Administrative Expenses
2007
in $
%
Sales
2008
%
Sales
2009
%
Sales
2010
%
Sales
2011
%
Sales
Salaries
Payroll Taxes & Benefits
Total Wages and Payroll Taxes
116,221
20,920
137,140
23%
4%
27%
307,880
55,418
363,298
38%
7%
45%
364,272
65,569
429,841
40%
7%
47%
455,382
81,969
537,351
37%
7%
43%
545,223
98,140
643,363
37%
7%
43%
Advertising & Sales Expenses
Rent
Utilities
Other Taxes
Telephone & Postage
Professional Services
Insurance
Repair & Maintenance
Travel & Entertainment
Office Supplies
Dues & Subscriptions
Temporary Personnel
Miscellaneous
Bank & Credit Card Fees
Depreciation
Total General & Administrative Expenses
5,000
120,000
7,200
240
7,142
3,750
2,500
2,400
12,000
1,500
1,000
2,500
1,100
1,100
15510
182,942
1%
24%
1%
0%
1%
1%
1%
0%
2%
0%
0%
1%
0%
0%
3%
37%
8,000
120,000
7,200
240
9,600
6,000
4,000
2,400
20,000
2,400
800
4,000
1,760
1,600
20,742
208,742
1%
15%
1%
0%
1%
1%
1%
0%
3%
0%
0%
1%
0%
0%
3%
26%
9,200
120,000
7,200
240
11,040
6,900
4,600
2,400
23,000
2,760
920
4,600
2,024
1,840
20,942
217,666
1%
13%
1%
0%
1%
1%
1%
0%
3%
0%
0%
1%
0%
0%
2%
24%
12,420
240,000
14,400
480
14,904
9,315
6,210
4,800
31,050
3,726
1,242
6,210
2,732
2,484
43,692
393,665
1%
19%
1%
0%
1%
1%
1%
0%
3%
0%
0%
1%
0%
0%
4%
32%
14,904
240,000
14,400
480
17,885
11,178
7,452
4,800
37,260
4,471
1,490
7,452
3,279
2,981
43,692
411,724
1%
16%
1%
0%
1%
1%
1%
0%
3%
0%
0%
1%
0%
0%
3%
28%
sales
500,000 100%
800,000 100%
920,000 100% 1,242,000 100% 1,490,400 100%
7 / 17
Prospective Financial Statements – Draft March 30, 2007
8. Summary of Significant Assumptions
General and Administrative Expenses (continued)
Costs are minimized and represent between 25% and 30% of sales over the next five years. They are consistent with the evolution
of sales.
The main expense concern the rent of the Boutique on Madison Avenue, for $10,000 per month.
Utilities are budgeted in correlation with the rental.
Advertising and entertainment costs will include :
Direct mailing in the form of personal letters and invitation,
Publication in fashion magazines, news papers and other,
Special events,
Customized Website to provide additional means of communication.
Depreciation is computed over the useful life of machines (5 years) and the useful life of lease improvement (8 years).
Interest Expense
The business is financed by personal funds and financial debt. The financial debt is estimated to $200,000 and is supposed to bear
interest at around 5% and is reimbursed over 72 months.
Corporate Taxes
Income taxes are computed with current rates. Dousoeur de Paris will pay taxes in New York State and New York City due to his
location.
Net Income
The net income amounts to $35,725 en 2007, and decreases slightly in 2008 to $19,641 due to the adjustment of the salary of the
founders. It amounts to $31,738 in 2009, then decreases again in 2010 to $5,930 due to the opening of the new Boutique. The
profitability increases again in 2011 to $50,766.
8 / 17
Prospective Financial Statements – Draft March 30, 2007
9. Forecasted Cash Flows from 2007 to 2011
The evolution of forecasted cash flows from 2007 to 2011 are as follows:
in K$
2007
2008
2009
2010
2011
Net Income reconciled with Cash Flows
51,235
40,383
52,679
49,621
94,458
Increase (decrease) in Assets
Cash Flows from Operating Activities
-5,937
57,172
1,870
38,512
-487
53,166
-2,127
51,748
-1,008
95,466
Proceeds of Fixed Assets
Disposals of Fixed Assets
Cash Flows from Investing Activities
190,000
0
-190,000
1,000
0
-1000
1,000
0
-1000
160,000
0
-160000
1,000
0
-1000
Issuance of Common Stock
Proceeds from Debts
Repayment of Debts
Dividends
Cash Flows from Financing Activities
100,000
200,000
-30,556
0
269,444
-33,333
0
-33,333
-33,333
0
-33,333
-33,333
0
-33,333
-33,333
0
-33,333
Net Increase in Cash
136,617
4,179
18,833
-141,585
61,133
Cash at beginning of the year
Cash at end of the year
0
136,617
136,617
140,796
140,796
159,629
159,629
18,043
18,043
79,176
Evolution of Cash Flows from 2007 to 2011
in K$
350
250
150
50
-50
-150
-250
2007
2008
Financial Debt
2009
2010
2011
Cash at end of the year
The evolution of cash flows over the 5 next years presented in the schedule above takes into account the hypothesis of a financial debt of
$200,000 refundable over 72 months serving an interest around 5%. Over the period from 2007 to 2011, Dousoeur de Paris presents a
financial debt of $169,444 in 2007 and shows a net cash of $46,622 in 2011 after the start of a new Boutique in 2010 wholly financed
internally. The main features of the evolution are as follows:
Personal funds of the founders amounts to $100,000 in 2007,
Profitability enables to pay off the debt and decrease the financial debt to $36,111 in 2011,
Limited costs structure with controlled investments.
9 / 17
Prospective Financial Statements – Draft March 30, 2007
10. Forecasted Cash Flows Statement for 2007
Forecasted Cash Flow Statement for 2007 “ before financial debt”
in $
Sales
Gross Margin
Salaries and Payroll Taxes
Advertising & Sales Expenses
Rent
Utilities
Other Taxes
Telephone & Postage
Professional Services
Insurance
Repair & Maintenance
Travel & Entertainment
Office Supplies
Dues & Subscriptions
Temporary Personnel
Miscellaneous
Bank & Credit Card Fees
General and Administrative expenses
Corporate Tax and State Taxes
Interest expense
Cash Flow from Operating Activities
Proceeds of Fixed Assets
Deposit
Disposals of Fixed Assets
Cash Flow from Investing Activities
Issuance of Common Stock
Proceeds from Debts
Repayment of Debts
Dividends
Cash Flow from Financing Activities
Working Capital
Cash at beginning of the year
Cash at end of the year
1
2
3
4
5
6
7
8
9
10
11
12
0
0
0
0
25,000
19,000
25,000
19,000
35,000
26,600
45,000
34,200
45,000
34,200
45,000
34,200
60,000
45,600
60,000
45,600
60,000
45,600
100,000
76,000
9,933
9,933
9,933
9,933
9,933
10,000
600
10,000
600
10,000
600
14,419
800
10,000
600
300
300
420
10,000
600
60
540
540
540
14,419
800
10,000
600
60
720
14,419
800
10,000
600
842
1,750
1,250
200
1,000
840
340
0
100
100
17,022
10,000
600
60
300
9,933
800
10,000
600
9,933
10,000
600
9,933
800
10,000
600
720
720
14,419
1,000
10,000
600
60
1,200
2,000
200
1,000
60
60
0
90
0
12,310
200
1,000
60
60
0
90
50
12,420
200
1,000
60
60
0
90
70
13,300
200
1,000
60
60
0
90
90
12,640
200
1,000
60
60
625
90
120
14,275
0
3,367
0
10,377
0
11,627
200
1,000
60
60
625
90
120
14,335
4,565
0
12,280
200
1,000
60
60
625
90
120
14,275
0
-3,353
30000
200
1,000
60
60
0
90
90
12,700
4,565
0
7,002
1,250
200
1,000
60
60
0
90
90
13,890
0
-22,243
200
1,000
60
60
0
90
50
13,160
4,565
0
-8,658
0
16,906
0
16,906
200
1,000
60
60
625
100
200
17,105
4,565
0
39,910
0
-30000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
100000
0
0
0
0
0
0
0
0
0
0
0
-86,955
-86,955
-109,198
-109,198
-142,551
-142,551
-151,209
-151,209
-147,842
-147,842
-140,841
-140,841
-130,464
-130,464
-118,837
-118,837
-106,556
-106,556
-89,650
-89,650
-72,745
0
5,937
-72,745
-26,897
-26,955
100000
60000
-160000
100000
0
The monthly cash flows statement for 2007 before financing indicates the level of funds needed to start the activity and finance the
investment. The cash flows decreases to the maximum of $151,209 after four months of activity and increases with the growth of sales.
The average amount of the financial debt is between $150,000 and $200,000.
10 / 17
Prospective Financial Statements – Draft March 30, 2007
11. Working Capital
The evolution of working capital from 2007 to 2011 are as follows:
in $
Inventory
Accounts receivable
Other Current Assets
Current Assets
Accounts Payable
Payroll Accounts
Accrued Expenses
Accrued Taxes
Current Liabilities
Working Capital
2007
6,000
0
1,566
7,566
6,667
0
5,270
1,566
13,503
-5,937
2008
9,600
0
861
10,461
8,000
0
5,667
861
14,528
-4,067
2009
11,040
0
1,391
12,431
9,200
0
6,394
1,391
16,985
-4,554
2010
14,904
0
260
15,164
12,420
0
9,164
260
21,844
-6,680
2011
17,885
0
2,384
20,269
14,904
0
10,669
2,384
27,957
-7,689
Evolution of Working Capitol from 2007 to 2011
in K$
10
0
-10
-20
-30
-40
-50
-60
2007
2008
2009
2010
2011
Working Capital
The working capital is negative over the 5 next years in accordance with the retail activity and the low level of inventories. The level of
inventory increases from $6000 in 2007 to $17,885 in 2011 in compliance with the level of activity. The maximum of accounts payable
amounts to $14,904 in 2011.
The evolution of working capital is assessed with the following assumptions:
Over the 5 next years, the inventories consist mainly of raw material for the pastry. The rotation is estimated to 18 days of
purchases considering the expiration date of these products,
The payment terms for the receivables are estimated to 0 due to the activity of retail,
The payment terms for suppliers of raw materials are estimated at the minimum (15 days) considering the quick rotation of the
products. The general and administrative expenses are supposed to be paid at 30 days except the rental that is due on the
beginning of the month.
Accrued taxes mainly consist in a 10% balance of the estimated income taxes usually paid with the extension in March of the next
year.
11 / 17
Prospective Financial Statements – Draft March 30, 2007
12. Forecasted Balance Sheets
Assets (in $)
Current assets
Cash & cash equivalents
Accounts receivable
Inventories, net of allowance
Other current assets
Total current assets
Property, equipment and software net of
accumulated depreciation & amortization
Long-term and other assets
Intangible, net of accumulated amortization
Security deposits
Total long-term and other assets
Total assets
Liabilities (in $)
Current liabilities
Accounts payable
Accrued expenses
Payroll and related accruals
Income tax payable
Other current liabilities
Total current liabilities
Long-term liabilities
Notes payable
Total liabilities
Commitments and contingencies
Stockholder's equity
Common stock, 1$ par value, 1,000 shares authorized
issued and outstanding
Accumulated benefit
Total stockholder's equity
Total liabilities and stockholder's equity
2007
2008
2009
2010
2011
Var 07/08 Var 08/09 Var 09/10 Var 10/11
136,617
0
6,000
1,566
144,183
140,796
0
9,600
861
151,257
159,629
0
11,040
1,391
172,060
18,043
0
14,904
260
33,207
79,176
0
17,885
2,384
99,445
4,179
0
3,600
-705
7,074
18,833
0
1,440
530
20,803
-141,585
0
3,864
-1,131
-138,853
61,133
0
2,981
2,124
66,238
109,906
90,581
71,056
127,781
85,506
-19,325
-19,525
56,725
-42,275
4,583
60,000
64,583
318,673
4,167
60,000
64,167
306,005
3,750
60,000
63,750
306,866
3,333
120,000
123,333
284,322
2,917
120,000
122,917
307,868
-417
0
-417
-12,668
-417
0
-417
862
-417
60,000
59,583
-22,544
-417
0
-417
23,546
2007
2008
2009
2010
2011
Var 07/08 Var 08/09 Var 09/10 Var 10/11
6,667
5,270
0
1,566
0
13,503
8,000
5,667
0
861
0
14,528
9,200
6,394
0
1,391
0
16,985
12,420
9,164
0
260
0
21,844
14,904
10,669
0
2,384
0
27,957
1,333
396
0
-705
0
1,025
1,200
727
0
530
0
2,457
3,220
2,771
0
-1,131
0
4,859
2,484
1,505
0
2,124
0
6,113
169,444
169,444
136,111
136,111
102,778
102,778
69,444
69,444
36,111
36,111
-33,333
-33,333
-33,333
-33,333
-33,333
-33,333
-33,333
-33,333
100,000
35,725
135,725
318,673
100,000
55,366
155,366
306,005
100,000
87,104
187,104
306,866
100,000
93,033
193,033
284,322
100,000
143,799
243,799
307,868
0
19,641
19,641
-12,668
0
31,738
31,738
862
0
5,930
5,930
-22,544
0
50,766
50,766
23,546
12 / 17
Prospective Financial Statements – Draft March 30, 2007
13. Significant assumptions of forecasted Balance sheets
Cash & cash equivalents: Awareness of cash flows at the beginning and the net increase in cash provided during the year to obtain the
cash at the end of the year.
Working Capital: The balances of current assets and current liabilities are computed in correlation with the number of days of sales or
purchases established. The payment terms and rotation for the period from 2007 to 2011 are supposed to be stable:
Inventories: 17 days of purchases,
Accounts receivables: payment terms are reduced to 0 day of sales due to the activity of retail sales,
Other receivables are estimated at the minimum,
Accounts payable: 15 days of purchases for the suppliers of raw materials and 30 days for general and administrative expenses
except for the rent that is supposed to be paid in advance,
Accrued income taxes are estimated to 10% of the annual estimated income taxes.
Fixed assets: There are 2 phases for the investment.
The first phase correspond to the start of the activity in 2007. The main investments consist in:
Machines for the pastry. The amount is estimated to $60,000 and is depreciated on 5 years.
Leasehold improvement for the Boutique on Madison Avenue estimated to $65,000. The depreciation is computed over 8 years.
The second phase occurred in 2010 with the opening of the second Boutique. The investments are as follows:
Machines for the pastry. The amount is estimated to $50,000 and is depreciated on 5 years.
Leasehold improvement for the second Boutique $50,000 and depreciated on 8 years.
13 / 17
Prospective Financial Statements – Draft March 30, 2007
15. Summary of Significant Accounting Policies
The forecasted financial statements of Dousoeur de Paris are established in accordance with Statements of Standards for Accounting and
Review Services issued by the American Institute of Certified Public Accountants.
Organization
Dousoeur de Paris, LLC is a US company incorporated in New York State on January 2007.
Cash and Cash equivalents
For the purposes of the statements of cash flows, the Company considers all short term debt securities purchased with a maturity
of three months or less to be cash equivalent.
Dousoeur de Paris, LLC is a US company incorporated in New York State on January 2007.
Revenue Recognition
Revenues are recognized when earned, which is upon the transfer of the merchandise to the purchaser.
Allowance for doubtful accounts
The allowance for doubtful accounts is based on management's evaluation of the adequacy of the allowance for possible
unrecoverable accounts receivable.
Receivables past due more than 90 days are considered delinquent by group policy.
Inventory
Inventory is stated using a weighted average method determined by using the first-in, first-out method.
Furniture, Fixtures and Equipment
All furniture, fixtures and equipment are carried at cost and are depreciated over the useful life of the related asset using the
straight-line method. Leasehold improvements are amortized over the term of the lease or the life of the asset, whichever is
shorter.
15 / 17
Prospective Financial Statements – Draft March 30, 2007
16. Summary of Significant Accounting Policies
Deferred Income Taxes
The deferred tax asset and liability are comprised of federal and state income taxes relating to differences between the tax basis of
assets and liabilities and their financial statement amounts. These differences relate to depreciation methods, inventory, estimated
doubtful accounts and other accruals.
Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
16 / 17
Prospective Financial Statements – Draft March 30, 2007
17. Swot Analysis
Strengths - Activity
Weaknesses - Activity
The New York City population consumes and spends a lot of money
in the food sector.
The consummation changed and companies have to adapt the needs.
In the pastry market, the choices of products compared to the
French market is small.
The workforce has been reduced.
Few competitors offer such products on the New York market.
Risk of a concentration of the activity at Christmas.
Adaptation of the taste of the French pastry to the American trends
Strengths - Business
Weaknesses – Business
A capacity to develop an attractive interior design Boutique in
Manhattan.
Concentration of sales on pastry products.
A range of new quality products of French origins not produced yet
by the competitors.
The capacity to attract new customers for special events for the
business.
Weaknesses - Strategy
Strengths - Strategy
New brand politic with luxury image of French products.
The implementation in an easy access location with a lot of passing.
Necessity to adapt the products to the American way of life.
Excellent quality in terms of presentation with very competitive
pricing.
Seasonality of sales specially during Christmas.
Capacity of using existing relationship to build a larger network of
potential clients.
Requirement of a location with high rental.
Reactivity and opportunity to manage special events for the business.
Trend to outsource some services (transport, freelance).
17 / 17
Prospective Financial Statements – Draft March 30, 2007
18. Swot Analysis
Strengths - Management
Weaknesses - Management
Dynamism of the management to start a business.
Sensitiveness of sales to the relationship of the management.
The 11 year experience of the French pastry chef Corine Fina.
A capacity to established a new trend in the pastry market and adapt
the products to the needs of the customers.
Diane Cepeda brings a significant cliental book.
Orlando Cepeda has important client connections with 6 years
experience working for Trump management.
Limited costs structure to increase profitability of the Company.
Strengths - Financial
Weaknesses – Financial
Profitability over the 5 next years mainly due to:
The increase of the net ordinary income from $59,917 in 2007
to $77,617 in 2011,
The importance of the fixed cost of the rental and the deposit that
burden with the cash flows.
The increase of the net income by more than 40% between
2007 and 2011.
Limited financial debt due to the personal funds brought at the
beginning.
Threats
No risk on accounts receivable,
Low level of inventories
Management and direction functions are concentrated in Cepeda
family,
Capacity to answer to the needs of the market.
Opportunities
Limited costs structure enabling to achieve the breakeven point,
Capacity to attract customer for special events.
18 / 17
Prospective Financial Statements – Draft March 30, 2007