Phase 1 - Financials

Phase 1

Financials

Prior to soliciting funds from private investors, banks, or other shareholders, it is critical that all plant design / build costs are properly defined, and a 5-year balance sheet is created to make sure your future cash flow can service your debt properly. Providence has created a complete set of General Accepted Accounting Principles, (GAAP), compliant Financials for dozens of beverage manufacturers which have streamlined the procurement of finances for their projects including Small Business Administration, (SBA), backed loans. A complete set of Financials includes the following documents:

Process Equipment Negotiations

Providence has developed strong relationships with dozens of top rated process equipment suppliers that benefits the beverage manufacturer in many ways. Very competitive pricing based on a variety of offerings per machine category, limited to zero change orders, on-time delivery assurance, machine performance verification, reliable start-up and training validation, and machine to machine interoperability conformance. Custom terms are also negotiated through Providence. Please review Providence’s list of “Preferred Partners” for more information about their process equipment options.

Process Equipment Contract Administration

Once all contracts have been signed, Providence works closely with all process equipment vendors, bank loan facilitators, and the beverage plant’s financial manager in coordinating the procurement, review and submittal of all vendor invoices to ensure they meet the original terms and conditions established in each equipment supplier’s contract. Beverage plant owners can be confident that they are paying in a manner that is congruent with their financial plan and vendors can be assured that they are being paid according to their agreed upon terms and conditions. No surprises equate to a smoother project flow with less stress for all parties.

Shareholder Presentation

Once the set of Financials has been completed, the accrued financial data is incorporated into this shareholder’s presentation which is then used to explain the business case for requested funding in a clear and professional manner using Microsoft PowerPoint. Key financial data, examples of key process equipment, forecasting assumptions and costing explanations are all included in this presentation.

Labor Cost Schedule

This spreadsheet defines current and 5-year anticipated labor requirements for the entire beverage plant enterprise including operations, sales, admin, and senior management. Annual salary income and additional hires based on forecasted growth are all calculated in this document which is then linked to the 5-year income schedule. Industry salary averages are compared to local rates to assure employees are paid in a manner that reduces employee turn-over.

Break-Even Analysis

This spreadsheet calculates a beverage plants break-even volume based on data uploaded from the production cost spreadsheet, and sales splits by packaged products including bottles, cans, and kegs. This document also serves as a template by which several “what-if” scenarios can be evaluated for optimized profitability.

Production Cost Analysis

This spreadsheet evaluates all ingredient costs per batch of beer for 5 beverage brands, packaging costs for bottles, cans and kegs, and utility costs including water, sewer, electric, Co2, Nitrogen and natural gas. This spreadsheet is used to calculate break-even values and is also linked to the 5 Year Income Schedule.

5 Year Forecast

This is also a foundational document and is required to calculate revenue for 5 key product brands by packaging format percentage so that production costs can be determined. Data from this document is then linked to the 5 Year Income Schedule. This powerful tool can be used to calculate the overall financial impact associated with quick and simple changes to the forecasted volumes per brand and packaging type.

Balance Sheet

This document is an essential part of any set of GAAP approved Financials and include a listing of current and fixed assets, capitalized expenses, short and long-term liabilities and equity over 5 years. This document requires data from the Project Cost Schedule to properly calculate net equity and liabilities.

Source & Use

This simple document defines how funds are procured and used over a 5-year period and demonstrates fiscal responsibility and net cash viability.

5 Year Income

This GAAP standard document includes sales projections from beverage sales via multiple venues, tasting room food sales and store apparel sales, cost of goods sold for each sales revenue category, margin calculations, operations costs, other income sources, taxes and net cash from operations totals for 5 years. This document requires data from almost every other document on the financial workbook as listed above. The chart of accounts categories and industry averages are compared to the local beverage plant’s data to see how well they are performing. This has proven to be a positive means by which cost containment efforts can be more profitably focused upon.

Loan Portfolio

This document is a simple spreadsheet that defines all loans with associated values, interest rates, terms and monthly payments by principal and interest over 5 years. Data from this document is used in the 5-year income schedule.

Depreciation Schedule

This document defines how a beverage plant may depreciate their building, capitalized professional engineering services and process equipment over 5 years. Data from this document is used in the 5-year income schedule.

Project Cost Schedule Development

This spreadsheet is broken down into three categories including facility construction costs, professional engineering services costs, and process equipment procurement and installation costs including equipment, shipping, rigging, electrical, process piping, and training / start-up. Vendor contact information, approved budget vs actual costs with variance per equipment or service item and bank draft value vs date are all tracked in this “live” document. The Project Cost Schedule is the foundational cost schedule for multiple other financial documents and also sets the financial cost goals by which Providence Process Solution’s Phase III – Project Management must follow as well as the foundational document for Providence’s Process Equipment Contract Administration service.

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