Good Business 5:26 PM

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1 Good Business 5:26 PM Disclaimer: This report contains sensitive company information. As such, the company / individual for whom this report was prepared is responsible for the management of its content. NuLevel does not in anyway warrant or guarantee the results of this report, as it does not control the information input into the system.

2 Breakeven Analysis Overview This report is designed to provide users with a current and projected snapshot of their company s Breakeven Revenues. With it, users are able to determine how close they are to profitability, which also provides a benchmark for making the appropriate operating adjustments. Breakeven Revenues Breakeven is essentially calculated by determining the company s contribution margin which would be available to cover fixed operating costs. In other words, for every dollar of revenues generated by a company, there are typically certain variable costs required to generate that dollar. The contribution margin is the amount available (at a certain level of gross revenues) to cover fixed operating costs. The fixed costs, will be incurred whether the company generates income or not. It is important to note that if a company is not operating at or above Breakeven then it may still have positive operating cash flows. While lenders focus on operating cash flows, a firm that is not operating at or above Breakeven may send up red flags, which may cause them to look more critically at the performance and growth potential of the company. The degree to which a firm is operating below its Breakeven point might reflect that its, a) cost structure is too high, b) pricing is too low or, c) there is inadequate market demand. LTM or Last 12-Months For this report, LTM or the Last 12 Months is used as a baseline for determining the current and future breakeven revenue levels. You can either use the actual LTM data or, the most recent 12-month year-end data. However, the LTM provides the best timeframe for evaluating a company s overall performance, including its breakeven level. Operating Cost Total Operating Costs consists of fixed and variable costs (Note: variable costs should include the Cost of Goods Sold). The amount calculated in this analysis for Total Operating Costs should be equal to the Total Operating Cost plus the Cost of Goods Sold obtained from your Income Statement. NOTE: For best results, it is important to enter only accurate and reliable information. Otherwise, the value of this report may be greatly diminished. Powered By: NuLevel Strategic Solutions, LLC. All Rights Reserved

3 Good Business Projected Profit & Loss Statement (5-Year) LTM* Year 1 Year 2 Year 3 Year 4 Year 5 Revenues (Actual) $542,000 $566,390 $591,878 $618,512 $646,345 $675,431 COGS $352,300 $368,154 $384,720 $402,033 $420,124 $439,030 Gross Profit $189,700 $198,237 $207,157 $216,479 $226,221 $236,401 Operating Expenses Fixed $135,000 $137,700 $140,454 $143,263 $146,128 $149,051 Variable $59,620 $62,303 $65,107 $68,036 $71,098 $74,297 Total Operating Expenses $194,620 $200,003 $205,561 $211,299 $217,226 $223,348 Net Income ($4,920) ($1,766) $1,597 $5,180 $8,994 $13,052 Breakeven Revenues $562,500 $573,750 $585,225 $596,930 $608,868 $621,045 Breakeven Powered By: NuLevel Strategic Solutions, LLC. All Rights Reserved

4 Breakeven Per Unit Pricing Analysis LTM*1 Year 1 Year 2 Year 3 Year 4 Year 5 Breakeven Revenues $562,500.0 $573,750.0 $585,225.0 $596,930.0 $608,868.0 $621,045.0 Avg. # of Production Days/Year Monthly Breakeven Revenues $46,875.0 $47,812.5 $48,768.8 $49,744.2 $50,739.0 $51,753.8 Daily Breakeven Revenues 1, , , , , ,003.4 Avg. # of Revenue Generators Daily Capacity per Revenue Generator 2, , , , , ,500.0 Avg. Daily Capacity (#Widgets) 5, , , , , ,000.0 BE Price per Unit $0.4 $0.4 $0.4 $0.4 $0.4 $0.4 Avg. Pricing Premium/Discount perunit Current (based on current and Projected Revenues)*2-3.6 % -1.3 % 1.1 % 3.6 % 6.2 % 8.8 % Proposed Markup (Premium) per Unit*3 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % Target Price (at Proposed Markup) $0.4 $0.4 $0.4 $0.4 $0.4 $0.4 1) LTM stands for Last Twelve Months. 2) Difference between Breakeven Price per Unit and Actual Price per Unit 3) Targeted markup rate applied to Breakeven Price per Unit Powered By: NuLevel Strategic Solutions, LLC. All Rights Reserved

5 Breakeven Analysis Summary The importance of the Breakeven Analysis is to determine how much revenue must be generated, in order to cover a company's fixed operating costs. Based on your inputs, it will cost the business $0.76 for every one dollar in earned revenues. Thus, there will be approximately $0.24 per dollar of earned revenues to cover fixed costs. In this case, for every $ in gross revenues generated, the company will net approximately $ in Gross Profit to cover it's fixed operating costs. In addition to the Breakeven Revenue calculation, the Breakeven Analyzer Tool also calculates the company's Breakeven Cost per unit. In this case, the business will be required to generate a minimum of $0.36 per unit (Widgets), in order to stay on track with the gross Breakeven Revenues. Approximately 1814 units must be produced, daily (based upon a 310 operating days per year). The company will need to generate approximately $ in gross annual revenues or, $46875 monthly, in order to breakeven. The solution for improving the Breakeven Revenue level is to increase sales while minimizing fixed cost add-on s, negotiating with the appropriate vendors to lower fixed costs and / or, eliminate fixed costs where possible. Also, where possible, try and reduce the company's variable costs; in particular, the Cost of Goods Sold. Powered By: NuLevel Strategic Solutions, LLC. All Rights Reserved