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New Economy Consultants Co.

New Economy Consultants Co.
Annual Report 2012
New Economy Consultants Co.
Annual Report 2012
NEC
NEC

Contents

Company Overview…………………………………………………..................1 Year in Review…..…………………………………………………....................1 Financial Statements ……………………………………………………………2 Notes to financial statements……………………………………………………4 Looking forward………………………………………………………………...6 Recommendation regarding government contracts……………………………..6 Source…………………………………………………………………………...8

Company Overview

New Economy Consultants Co. is founded in January 2012 by three IE MIM alumni, aiming to provide consultancy services related to IT, general management, contract and employment law issues. Till now there are four shareholders, including the three founders, who together comprise the board of direction. In addition to the three original founders who act as executives, three employees have been working for the company since the inception. Our main clients are small IT companies or new founded businesses which need these services. The company gains revenue from the projects or contracts granted by regular clients. Therefore, the company's revenue and cash flow depends on its success and ability to constantly win new projects. This is the first year of our business. We see a great potential from the year’s operating performance and are hoping for a spectacular prospect in the company’s future.

Year in Review

When starting the company, three owners contributed €50000 cash and a software which was valued €10000. During the year, the company collected money from its clients monthly and thus maintained the cash flow. Meanwhile, several types of expenses were incurred throughout the year with different payment agreements or periods. Besides a lease settlement for office accommodation, the company made an initial investment for refurbishment, new fixtures, office furniture, computer and photocopying equipment. Other non-one-time costs, such as insurance, office supplies, utility and telephone, were sustained during the first year. Lastly, there were monthly and regular operation expenses like advertising and other cash expenses. During the year, the company experienced some unexpected incidents. In June, the company received a letter from an international legal company which was asking for actions to avoid copyright violations related to the software. Then the company bought a set of new software which cost €8000 with an additional annual update fee of €2000. Moreover, although our cash inflow from operating activities was considerably stable, we still encounter some uncollectable bills which increased the expense for doubtful debts.

Financial Statements

Table 1 Balance sheet during the year

| Jan 1 2012| Dec 31 2012|
| €'s| €'s| €'s| % of total assets|
Assets| | | | |
Cash| 50000| | 82675| 64.24|
Accounts Receivable| | | 18200| 14.14|
Pre-payment| | | 1800| 1.40|
Office supplies| | | 270| 0.21|
Equipment (computers and copy equipment)| | | 4750| 3.69| Non-tangible assets (software)| 10000| | 8000| 6.22|
Premises| | | 13000| 10.10|
Total Assets| 60000| | 128695| 100.00|
| | | | |
Liabilities| | | | |
Accounts Payable| | | 1880| 1.46|
Salaries payable (owners)| | | 108000| 83.92|
Short-term loan| | | 0| 0.00|
Long-term loan| | | 0| 0.00|
Total Liabilities| 0| | 109880| 85.38|
| | | | |
Equity| | | | |
Share capital (Common Stock*)| 60000| | 70000| 54.39|
Capital in Excess of par Value| 0| | 10000| 7.77|
Opening retained earnings| | 0| | |
add Income for year| | -61185| | |
less dividends paid| | 0| | |
closing retained earnings| | | -61185| -47.54|
Total Equity| 60000| | 18815| 14.62|
| | | | |
Total Liabilities & Equity| 60000| | 128695| 100.00| * The company has authority to issue a total of...
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