326 ◾ The Guide to Entrepreneurship: How to Create Wealth for Your Company
PRO FORMA BALANCE SHEETS
IN
CREASE IN ASSETS
e Company is projecting a strong growth in its balance sheet, with total assets pro -
ected to be $6.5 million at March 31, 1992 and increasing to $21.4 million by March 31, 1996.
s positive trend is based on a significant sales increase, dramatically improved gross mar-
and a disciplined approach to monitoring other operating expenses, specifically research
d development, marketing and sales, and general and administrative.
CREASE IN NET WORTH
Coincident with the rise in assets is the increase in PolyMedica’s net worth. Shar
uity is estimated to equal $5.2 million as of March 31, 1992 and rise to $17.7 million as o
rch 31, 1996. ese improvements in Company net worth will be accomplished without any
ternal financing beyond a future round of financing.
MPONENTS OF ASSETS
Current assets as a component of total assets, and therefore a measure of the Company’
quidity, are expected to increase from 53.9% as of March 31, 1992 to 79.5% of total assets
of March 31, 1996. is change reflects substantial increases in cash and work in process
ventory. Gross property, plant and equipment, while decreasing as a percentage of total
sets, should show an increase of $4 million from March 31, 1992 to March 31, 1996. e
cumulation of depreciation and amortization expense reduces this increase to $844,000
her assets remain in the 4%–8% range of total assets.
MPONENTS OF LIABILITIES AND SHAREHOLDERS’ EQUITY
Total liabilities as a percentage of liabilities and shareholders’ equity decrease slightly from
.2% as of March 31, 1992 to 17.4% as of March 31, 1996. ese liabilities exclude external debt
her than normal trade payables and accrued liabilities and reflect ongoing paydown of the
ompany’s existing $400,000 promissory note. erefore, as the Company grows, it should be
und increases in inventory and fixed assets without incurring additional leverage.
Under its operating plan, PolyMedica’s net worth should remain positive from inception
ter a future offering, the Company’s additional paid-in capital should stay unchanged at $6.3
illion. e accumulated deficit turns positive as retained earnings during early FYE 1994
d increases to $11.4 million by March 31, 1996.
Confidential PolyMedica Industries, Inc.