Presentation on theme: "Business Plan: 3D Additive Manufacturing Technologies, Co. – 3-DAMTM"— Presentation transcript:
1Business Plan: 3D Additive Manufacturing Technologies, Co. – 3-DAMTM Starting A New Venture – MGMT 6630Joe Ott
2BUSINESS CONCEPT 1. INTRODUCTION 2. THE COMPANY 3. PRODUCTS / SERVICES 1.2. BUSINESS IDEA1.3. BUSINESS MODEL1.4. BUSINESS GOALS1.5. KEYS TO SUCCESS2. THE COMPANY2.1. LEGAL STRUCTURE AND OWNERSHIP3. PRODUCTS / SERVICES3.1. PRODUCT AND SERVICE SUMMARY3.2. CUSTOMER3.3. TECHNOLOGY3.4. REGULATORY ISSUES4. THE MARKET4.1. MARKET ANALYSIS4.2. TARGET MARKET SEGMENT4.3. GROWTH POTENTIAL5. THE INDUSTRY5.1. COMPETITION6. SALES6.1. SALES STRATEGY.6.2. PRICE STRATEGY6.3. PROMOTION STRATEGY6.4. SALES FORECAST7. THE MARKETING PLAN8. MANAGEMENT AND EMPLOYEES9. ACTIVITY PLAN10. FINANCE AND ECONOMY FIGURESBACK UP SLIDES
31. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!” 1.2. BUSINESS IDEAThe business idea behind 3-DAMTM is to cross additive manufacturing technology with the “KinkosTM” concept.Customers contact store by appearance, , web submissionBusiness would staff trained engineers and technicians to assist customers in selecting the correct technology to manufacture their hardware.1.3. BUSINESS MODELSole Proprietorship during the initial start-up phaseWould initially target a small volume of jobs, applying a medium margin.Diversification Growth Strategy - 3-DAMTM would practice Forward Integration by getting in front of the customerThis business plan will outline the scope and make-up of the 3-DAMTM company, the market, competition, and financial outlook of the proposed company. The business name of the company to be formed will be “3D Additive Manufacturing Technologies, Co.” otherwise known as 3-DAMTM. This name comes from a combination of the two common names for the technology the company is based upon, “3D Printing” and “Additive Manufacturing”.3-DAMTM will utilize the technologies of additive manufacturing and offer a “KinkosTM” style of service and manufacturing to customers.From ASTM Designation: F2792 – 10 - Standard Terminology for Additive Manufacturing Technologies2,additive manufacturing (AM), n—process of joining materials to make objects from 3D model data, usually layer upon layer, as opposed to subtractive manufacturing methodologies, such as casting, forging, and machining. Synonyms: additive fabrication, additive processes, additive techniques, additive layer manufacturing, layer manufacturing, and freeform fabrication. It can encompass metals, polymers, and electronics and apply to a range of structural and functional materials as well as components for an array of defense and energy applications.
41. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!” From ASTM Designation: F2792 – 10 - Standard Terminology for Additive Manufacturing Technologies2Why pursue additive manufacturing? There are many benefits in using additive manufacturing to make hardware over conventional manufacturing5:Design flexibilityNo tooling constraintsAllows complex modelsNo hard tooling requiredNo material lead timeAutomated processReduced development expensesFaster concept design to functional componentReduced manufacturing costsNear wrought material propertiesReduced product life cycle costReduced manufacturing time: hours/days/weeks vs. monthsMinimal secondary machining - near-net shape partAdditive manufacturing is an emerging industry.Some of the difficulties with additive manufacturing are:New technology – not everyone is familiar, technology evolvingHigh barriers to entry – initial high start-up costs for equipmentMaterial properties are still being definedTechnical and process models are limitedPicture courtesy of Rapid Quality Manufacturing5
51. INTRODUCTION - “With 3-DAMTM comes manufacturing freedom!!” 1.4. BUSINESS GOALS2 years of operation:Increase market share – establish 4 stores in largest US manufacturing locations (Houston, TX; Milwaukee, WI; Seattle, WA; San Antonio, TX)4Increase market penetration over time –grow each store’s revenue at least 12.5% yearlyEstablish new pricing incentives and promotionsBuild long lasting quality partnershipsAdvertisingJoin Committee F42 on Additive Manufacturing Technologies16 years of operation:Increase market share – establish a store in 10 major US cities. Have plan developed to have 50 stores in major US cities by 10 years of operations.Increase market penetration over time – continue to grow revenue at least 12.5% yearly, per store.1.5. KEYS TO SUCCESSFlexibility – providing solutions for variety of customer and their unique requirements.Adaptability – have technology and capability for variety of needs.Sustained Growth – have capacity where and when a customer needs it.Technical “Know-how” – have understanding of how to use additive manufacturing technology to provide best results.Speed – providing solutions faster and more efficient than anyone else.Funding – have cash and capital to sustain growth and profit.This business plan will outline the scope and make-up of the 3-DAMTM company, the market, competition, and financial outlook of the proposed company. The business name of the company to be formed will be “3D Additive Manufacturing Technologies, Co.” otherwise known as 3-DAMTM. This name comes from a combination of the two common names for the technology the company is based upon, “3D Printing” and “Additive Manufacturing”.The initial location of the first office should be located in Houston, TX. According to (Kotkin, Dec 2011) Forbes Magazine4, this is currently the largest center of manufacturing in the US.Flexibility – providing solutions for variety of customer and their unique requirements. This will be achieved by understanding each market’s unique needs (part sizes, quality level, common materials, etc.)Adaptability – have technology and capability for variety of needs. This will be achieved by procuring additive manufacturing machines that initially will be able to serve the needs of the majority of markets.Sustained Growth – have capacity where and when a customer needs it. By targeting major manufacturing cities and business and residential centers, 3-DAMTM will be at the fingertips of industry. By taking internet and phone orders can provide service worldwide.Technical “Know-how” – have understanding of how to use additive manufacturing technology to provide best results. Will train and educate sales engineers and operators in various additive manufacturing technologies. Will provide continuing education as technologies change and mature.Speed – providing solutions faster and more efficient than anyone else. This will be achieved by streamlining the store’s infrastructure using lean concepts and software integration. A lean value chain will ensure post processing turn time is minimized.Funding – have cash and capital to sustain growth and profit. Aggressively campaign for funding via government and private investment.
62. THE COMPANY - “With 3-DAMTM comes manufacturing freedom!!” 2.1. LEGAL STRUCTURE AND OWNERSHIP3-DAMTM will be listed with the Internal Revenue Service as a sole proprietorshipThe principle owner (and equity shareholder) will be Joe Ott.Minor equity shareholders (<49%) will be silent partnersFigure 1. – Basic Organizational Structure
73. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!” 3.1. PRODUCT AND SERVICE SUMMARYPlastic and metal parts and concepts, produced in a few hours or days, using additive manufacturing technologiesEvaluation and modification of designs/CAD and concepts for application to additive mfg.Coordination of post processing.Metrology center – accurate measurement evaluation3.2. CUSTOMERSThe target customers are everyone from local hobbyist and enthusiast to large Fortune 500 companies needing unique part developed and produced.The current market doesn’t have local “to-go-to” places to get all your materials and additive manufacturing methods and post-processing under one roof.All competition is located in a few select areas3-DAMTM would provide a place for customers to have one-stop-shopping for their manufacturing. Customer(s) can contact the business center by phone, web, or face-to-face. Sales engineers would be available to help customers work through product development and iteration until the final product is ready. Pricing would be evaluated based upon the necessary amount of engineering and development to make hardware, material considerations, and post processing requirements.Plastic and metal parts and concepts, produced in a few hours or days, using additive manufacturing technologies. Individual parts or part pieces will generally be as up to as large as the build chamber of each machine allows and as small as the accuracy of the technology allows. The initial materials that will be available for customers’ parts will be limited to those qualified by the vendor the anticipated plastic and metal machines allow. Through technology development 3-DAMTM will look to grow this list.Evaluation and modification of designs/CAD and concepts for application to additive mfg.Coordination of post processing. Initially post processing will be outsourced. As 3-DAMTM grows it is anticipated that machining/post processing resources will be added to the product and services summary for each store.Metrology center – accurate measurement evaluation through surface and dimensional scanning using laser and light machines.
83. PRODUCTS / SERVICES - “With 3-DAMTM comes manufacturing freedom!!” 3.3. TECHNOLOGYPowder Bed Technologies - Powder Bed is the distribution of thin layer of powder (metal or thermoplastic) and uses an energy source to sinter/melt the powder into solid form. Powder Bed Technologies offer high resolution, medium volume, small to medium sized part capabilities. Two common methods are:Selective Laser Melting – laser beam power source in an inert atmosphere (nitrogen or argon)Electron Beam Melting – electron beam power source in a heated, vacuum environmentDeposition Technologies – Metal is introduced via powder nozzle or wire feed into an energy source directly at the build location, which melts to metal into solid form. Deposition Technologies offer lower resolution, lower volume, larger sized part capabilities. 3 common methods are:Laser Powder Deposition – laser/power nozzle combinationLaser Wire Deposition – use of a continuous feed wire and laser energy sourceElectron Beam Wire Deposition – use of continuous feed wire and EB energy sourceSpecialized Software – (CAD/CAM, 3D model analysis, project/customer management) will be required to seamlessly integrate customer models between additive mfg. platforms and required post processing technologies.3.4. REGULATORY ISSUES"Green Technology"PPEInert GasesIntellectual Property7Product Liability7The following technology is necessary for 3-DAMTM in order to create an output. These will be key technologies that will enable 3-DAMTM to be competitive and maximize turn-time while keeping quality. These technologies are generally very expensive capital investments. Additionally, these machines take up floor space and must have special environmental controls / PPE. It will require significant investments to procure initial machines and supplies and floor space.Additive Technologies are generally considered "Green Technology". But due to the fine particle size of powders used in manufacture special PPE and air filters will be required. Inert gases, such as argon, will be used in the manufacture of 3D parts. This may require a permit.Other regulatory considerations will be protection of Intellectual Property of customers. As this technology can easily be used to copy designs, infringement must be evaluated and considered7. Also, product liability should be accounted for and proper insurance ($1Million minimum) carried in the case of a bad part causing damage to persons or property7 or litigation.Pictures courtesy of EOS (http://www.eos.info/en/home.html), Arcam (http://www.arcam.com/), and Optomec (http://www.optomec.com/)
94. THE MARKET- “With 3-DAMTM comes manufacturing freedom!!” 4.1. MARKET ANALYSISWohlers Associates Inc. - Additive manufacturing had a total of market size of $1.7 billion worldwide in 2011.Emerging Industry - Additive manufacturing can be considered an emerging industry in the US124.2. TARGET MARKET SEGMENTSmall Businesses -2+ years old (generally wouldn't be start-ups in their first year)Income - Have manufacturing costs >$1000 per part.Need - need fast parts made, short runsEducation - need to understand hardware end requirements.Work - manufacturing, research, engineering, automotive, etc.Geographical location - in key starting cities, some internet sales.Large Business -2+ years oldNeed - need fast parts made, short runs, development iterationsHobbyists -Age - 16 years or olderIncome - able to afford part costs between $100 and $2000.Need - generally have a concept they want to make or need a replacement part for one that brokeGender - male and femaleEducation - majority expected to have some college and / or trade schoolWork - professionals and tradesGeographical location – key US manufacturing centers / cities, some internet sales.4.3. GROWTH POTENTIALAdditive Manufacturing, aka 3D Printing, will reach $3.1 billion worldwide by 2016 and $5.2 billion byIf 3-DAMTM can capture even 1% of this market that would be $31 million dollars in revenue. 5% growth in revenue the next year would result in $32,550,000 of revenue, per store.CAGR- Compound Annual Growth RatePotential CustomerYear 1Year 2Year 3CAGRSm. Business10051367761,30%Lg. Business10526861,48%Hobbyists3101 5902 09861,29%Total4202 1552 84312.5% = $387,500,000
105. THE INDUSTRY - “With 3-DAMTM comes manufacturing freedom!!” 5.1. COMPETITION - Other companies trying to adopt the “Kinkos” model are:Mydea Technologies – digital model shop and an additive manufacturing and rapid prototyping provider.Owners: Michael SiemerAnnual Sales: $520KCompetitor’s distribution channel: InternetCompetitor’s marketing strategy: Internet SalesProducts and Services: Product Development & 3-D CAD Modeling, Rapid Prototyping/Additive Fabrication, Subtractive Rapid Prototyping, Rapid Tooling & ManufacturingCompetitors price strategy: mid to high cost.Shapeways – 3D Printing company for designers and Do-It-Yourselfers. Helps people make and sell their items.Owners: Peter WeijmarshausenAnnual Sales: $1.90MCompetitor’s marketing strategy: Internet Sales, Arts and Crafts forums, Web sales of clients’ products, Do-It-Yourself market.Competitors price strategy: Low to mid cost.Products and Services: Tutorials, Shapeways Lab, Software, Metals and plastic fabrication, Online Sales.The following companies are a selection that specialize in additive technology and would be competition for their prospective sub-fields:Morris Technologies - – Selective Laser Sintering (SLS) metalsC&A Tool - – SLS metals and machine shopParamount Industries – - Stereolithography (SLA) and SLS of plasticsMaterialise - - a Belgian firm that uses additive manufacturing to make a range of products, including medical devices.
116. SALES - “With 3-DAMTM comes manufacturing freedom!!” 6.1. SALES STRATEGYIt is envisioned that customers would contact a local 3-DAMTM business center to initiate a job.6.2. PRICE STRATEGYPricing would factor in the costs of overhead, materials, and per hour cost for machines and personnel.A profit mark-up of 30% will be added to each job.6.3. PROMOTION STRATEGYSales will be generated through advertisement and campaigns. The campaign will utilize TV, trade journals, and the internet (web pages, FaceBook, etc.).6.4. SALES FORECASTBased 3 major products/services: Sales Engineering, Fabricated Metals, and Fabricated Plastics.Projected the amount of sales revenue generated by the average increase in customers each month times the expected revenue each customer would generate. YR 2 accounts for 4 stores in key cities. YR 3 accounts for 5 stores in key cities. Expect average growth of 12.5% per year for each store.Cost of sales is the overhead for the sales engineers and technicians plus an estimated monthly operating cost for the metal machines of $4000 and plastic machines of $3000.These numbers are based upon a best scenario.SalesYear 1Year 2Year 3Sales Engineering98 000Powder MetalPowder PlasticTotal salesDirect costs, sales24 00070 00082 75052 50062 062Total, direct costs, salesSales monthly
127. THE MARKETING PLAN - “With 3-DAMTM comes manufacturing freedom!!” As part of a Diversification Growth Strategy 3-DAMTM would practice Forward Integration.As the customer is the focal point for the business model, 3-DAMTM offices will be targeted close to the customers.Customers will be contacted through advertisement and campaigns.The campaign will utilize TV, trade journals, and the internet (web pages, FaceBook, etc.).Highlights of ads will target design freedom, no or low tooling, and speed.Additionally, small to large manufacturing companies will be approached. A marketing group will be selected to assist in the marketing campaign on a yearly contract.A $100k budget will be set for marketing. The marketing campaign will start in June 2013 and continue through December 2013.
138. MANAGEMENT AND EMPLOYEES - “With 3-DAMTM comes manufacturing freedom!!” CEO / CTO - complete oversight and responsibility for the company as well as technical authority.CFO - direct oversight of the following reporting line: Accounting, Patient Accounts, Communications, Purchasing, Printing & Duplicating, Information Management, Management Information Systems.Accounting and Human Resources - Accounting and Human Resources will be outsourced to a 3rd party company and overseen by the CFO.The company will be responsible for all day to day accounting and human resources activities, including accounts receivable and payable, health and dental care, 401k management, and taxes, etc. The company should have experience with accounting and HR in all US states. It would be preferred if the company has experience with start-up companies.Technology Team – Materials Engineer, Technology Researcher, Training/QualityResponsibility for moderately complex engineering projects,Serves as consultants, providing technical information and engineering recommendations that assist various projects and processes and materials.Coaches and trains less experienced engineers and technicians.Branch Manager(s) – oversee branch offices and perform salesEmployeesSales engineers – customer interface, engineers marry up technology to customer needs. There will be 2-3 per store.CAD and Build technicians – modify designs to make technology friendly, operate and run machines. There will be 1 per machine and two CAD operators per store.Post processing technicians - provide any necessary post processing and coordination. There will be one per store.Shipping/Receiving – ship and receive hardware, supplies, etc. There will be one per store.
149. ACTIVITY PLAN - “With 3-DAMTM comes manufacturing freedom!!” This section describes some activities that will be needed to implement the whole or parts of the business plan.Order and Install Machines – machines and installation at $1,000,000 a-piece. 1 plastics, 2 metals, 1 metrology and inspection, 1 oven and autoclave = $5,000,000Store – 15,000 sq. ft. * $3.523 per foot per year = $52,800. Plus $1,000,000 for upgrades and office requirements. Equals $1,052,800.00Hire Accounting / HR - $100,000Supplies - $100,000Advertising Campaign - $100,000ActivityStart dateStop dateBudgetResponsibleDepartmentOrder and Install Machines03/01/201306/01/2013CTOTechnology TeamStoreCEOHire Accounting / HR01/02/201305/31/2013CFOSuppliesAdvertising Co.04/01/2013Branch ManagersTotal
1510. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!” The following are “Seed Capital funding expenses” that will be incurred prior to the business starting:The following describes all the “Start-up through Second Stage” funding (existing and needed) for the project:Bank Loans – $3,000,000 – Secured against the procured equipment. Equipment, Real-estate, and Long-term loans.Angel Investors – $2,000,000Other Investors – $2,000,000 – Informal Risk Capital, Venture CapitalGrants – $2,000,000 – SBIR - Phase I and Phase II, Fed, State, Local.Government Loans - $1,000,000 – SBA (504, SBA), etc.Total: $10,000,000Third stage (growth) funding would be necessary for expansion beyond the first store and would be necessary at last quarter 2013.Start-up CostsResearch TechnologyResearch Store LocationPermits and FeesMarketing StudyTotal Start-up CostsStart-up fundingBank LoansOther InvestorsGrantsGovernment LoansTotal Start-up fundingTotal EquityThe following are “Seed Capital funding expenses” that will be incurred prior to the business starting:Research Technology – $100,000 – this is to research the best metal, plastics, and metrology machines necessary to support the business concept.Research Store Location – $200,000 – This is to find and fund the initial store location plus other 3 locations for next 3 stores.Permits and Fees – $100,000 – This will fund necessary permits and fees for establishing the store in first store location.Marketing Study - $100,000 – This will fund a marketing study for the Houston, TX area specifically and US in general to help target large businesses, small business, and hobbyists.The following describes all the “Start-up through Second Stage” funding (existing and needed) for the project:Bank Loans – $3,000,000 – Secured against the procured equipment. Equipment, Real-estate, and Long-term loans.Angel Investors – $2,000,000Other Investors – $2,000,000 – Informal Risk Capital, Venture CapitalGrants – $2,000,000 – SBIR - Phase I and Phase II, Fed, State, Local.Government Loans - $1,000,000 – SBA (504, SBA), etc.Total: $10,000,000
1610. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!” Net profit monthlyPROFIT & LOSS TABLEYear 1Year 2Year 3SalesSale costsBTO profit58 000BTO profit %17 %64 %67 %ExpensesSalariesAdditional Salaries costsMarketing and activity costsDepreciationAccounting / HR / Advertising Services99 996Supplies (office and operating)Utilities, Web, IT, Phone20 00096 000InsuranceMaintenance PlanResearch TechnologyResearch Store LocationPermits and FeesMarketing StudySum direct costsFinancial costs-0Profits before taxProfit before tax %%%-843 %Net profit yearly
1710. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!” Balance SheetYear 1Year 2Year 3Current assetsLiquid assetsSalesTotal current assetsFixed assetsFixtures and fittings & fixed assetsAcc depreciation fixtures & fittings/fixed assetsTotal fixtures and fittings/fixed assetsTotal assetsLiabilitiesShare capital & risk capitalAccounts payableAccrued taxesLong-term liabilitiesBalanced profit/lossTotal liabilities & equity capitalProfit for the yearYR YR YR3Current Ratio =*indicates low liquidityDebt Ratio =*indicates business while taking on more debt is working out of debtDebt to Equity = 1.32*High capital industry/businessNet Profit Margin =*indicates high initial risk but business becoming more stabile.ROI =Generally these ratios are stating that the business will be very risky at the onset due to the high amount of debt the company will have. This debt will continue to grow as the company expands but the expansion and income will stabilize the company as it grows out of debt in its first decade.These ratios can be compared (Appendix 3) against just the initial store. We see the same risk but slower recovery, though more stability.
1810. FINANCE AND ECONOMY FIGURES - “With 3-DAMTM comes manufacturing freedom!!” CASH FLOW ANALYSISYear 1Year 2Year 3Liquid assets, incomingLiquid assets obtained from activitiesSalesOther earningsTotal earnings from activitiesOther liquid assets obtainedVAT and tax refundsIncrease in accounts payableIncrease in short-term liabilitiesIncrease in long-term liabilitiesSale of current assetsSale of fixed assetsNew capital increaseTotal liquid assets obtainedLiquid assets spentCash expenditureTotal expenditure from activitiesOther liquid assets spentVAT and tax paymentsReduction in short-term liabilitiesReduction in long-term liabilitiesPurchase of current assetsPurchase of fixed assetsTotal liquid assets spentNet cash flowLiquid assets, outgoing
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21One Store (Houston, TX) Ratios YR1 YR2 YR3Current Ratio =*indicates low liquidityDebt Ratio =*indicates store is working out of debtDebt to Equity =*High capital industry/businessNet Profit Margin =*indicates high initial risk but business working toward stabilizing.ROI =*indicates high initial risk but business becoming more stabile.