Financial Plan of Brewery

Financial Plan
We want to finance growth mainly through cash flow and equity. We recognize that this means we will have to grow more slowly than we might like.
The most important factor in our case is collection days, particularly with the bulk order customers. We can't push our customers hard on collection days, because they are extremely sensitive and will normally judge us on our terms. Hence they tend to have a certain degree of financial authority. Therefore we need to develop a permanent system of receivables financing systems, using a well-coordinated accounting department. In turn we intend to ensure that our investors are compatible with our growth plan, management style and vision.
Compatibility in this regard means:
  * Fundamental respect for giving our customers value, and for maintaining a healthy and congenial workplace.
  * Respect for realistic forecasts, and conservative cash flow and financial management.
  * Cash flow as first priority, growth second, profits third.
  * Willingness to follow the company and contribute valuable input to strategy and implementation decisions.
9.1 Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
Some of the more important underlying assumptions are:
  * We assume a strong economy, without major recession.
  * We assume, of course, that there are no unforeseen changes in economic policy to make our products immediately obsolete.

General Assumptions |
| Year 1 | Year 2 | Year 3 |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 25.42% | 25.00% | 25.42% |... [continues]

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