1. Elements of Slide Show
MA 664
May 2007

2. Introduction Team name Listing of roles played team members
Nature of product(s) to be produced by the startup business
Nature of industry
Product market
Input markets
Enterprise budget. This budget should define assumptions made for quantities and prices for the first year

3. Master Budget Sales budget Production budget Direct materials budget
Direct labor budget
Overhead budget

4. Cash Budget Sources and uses of cash from operations
Financing of capital expenditure
Cash management
Minimize cash balances by paying down LOC
Invest in near cash assets when possible
Implications for cash flow liquidity
Implications for credit liquidity
Implications for asset liquidity

5. Price Projections
State assumptions about the growth of production and input requirements over the period
State procedure and assumptions used to project the price of the firm’s product(s) over the time period
State procedures and assumptions used to project the unit input costs for direct materials, direct labor and overhead

6. Description of Scenarios
Baseline or “Most likely” scenario probabilities over the period
“Optimistic” scenario coefficients of variation, standard deviations and probabilities over the period
“Pessimistic” scenario coefficients of variation, standard deviations and probabilities over the period

7. Financial Feasibility
Implications for liquidity
Implications for solvency and leverage
Implications for profitability, including margin
Implications for economic efficiency, including turnover
Implications for debt repayment capacity
Use of bar charts and graphs encouraged

8. Economic Feasibility Aversion to risk for a given return
Elements of NPV calculation
Annual net cash flows
Risk adjusted discount rates
Terminal value in 2012
Discounted net cash flows and terminal value
Net cost of project
NPV

9. What could go Wrong? Political risk Global market developments
Abnormal weather/environmental change
Other unexpected events affecting prices, sales, unit input costs, input availability

10. Conclusion Would you make this investment?
From an economic perspective
From a financial perspective
Other rationale (e.g., portfolio perspective)
What will you watch after the investment is made?
Importance of terminal value to your evaluation?

11. Requirements
Assume you are trying to convince me to extend you a5-year LOC for $250,000
You have 30 minutes to do this (nor more than 35 minutes or less than 25 minutes)
Do not read from note card!!!! It shows me you do not know your subject
Be prepared to answer questions from me and the audience