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“Business Model and Financial Projection of Caneblast Juice”

Ankita Sharma

Westcliff University

BUS 557: Applied Capstone Method

 Professor: Rabindra Silwal

March 21, 2022

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Abstract

A business model is a crucial basis for any business venture that explains how our company will generate income and use resources.

While continuing forward towards the investment, we must have a firm grasp on the principles and framework that will clarify overall

revenue cash flow, cost structure, and how the investment may be generated into profit. The business model, as well as the business

and revenue projections, will assist us in developing a concept for products, services, targeted audiences, and competitive

differentiation. Along with its ability to estimate profit and loss, revenue and expenditure, demand and supply, and many other factors,

predicting finance will be critical as a foundation of the company strategy. The income statements, projected balance sheets, and cash

flow statements will also be included in this document. This document is created with the help of the internet resource LIRN as well as

other e-journals.
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Business Model: Caneblast Juice

Business models are usually divided into two categories: business strategy and organizational resources. A business model is a

plan that is based on the use of specific concepts and resources. Product and services, targeted clients, potential competitors,

marketing, and sales all go under the category of the business concept, while management, financial modeling, balance sheet, cash

flow, and facilities fall under the category of company resources (Gadau & Man, 2012). As we have discussed in Professional

assignment (PA) 1, Caneblast juice is primarily focused on serving sugarcane juice around the local market. With their distinct service

delivery strategies, some of the world's most known firms are producing and realizing value. Alibaba, for example, does not own any

stores but partners with larger retailers to use their facilities.  As a result, any company's business model is determined by the strategy

they use to conduct effective operations.

In Nepal, most people are involved in the sugarcane production business. As it is considered a valuable cash crop, many

farmers of the Terai region are focused on starting commercial sugarcane farming. However, many farmers supply raw sugarcane to

the sugar mills in Nepal, rather than providing or producing sugarcane juice. Therefore, I have decided to start sugarcane farming

where we can provide organic or flavored processed juice to the Nepalese local market. As the Dang district is suitable for sugarcane

farming, having warm, sunny, and frost-free weather, a Caneblast juice firm will be established at first there. Because of COVID-19,

many people are health conscious and to boost their immunity they are focused on healthy drinks. In this scenario, sugarcane juice is
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the best option & Caneblast juice has more opportunities to establish its brand in the market. This will provide different flavored juice

that can change the taste of people in a good way.

In the context of Caneblast juice, we want to provide our service to the local market as well as some major cities of Nepal.

Most people will consume it not just during the summer, but also throughout the year because of its nutritious content. For Caneblast

juice, two different business models have been selected and they are as follows:

a. Brick-and-mortar model: The method of providing products or services to customers through a physical presence is known

as the brick-and-mortar business model. Brick and mortar is a business model in which we may conduct business in

a firm using traditional transaction techniques, and where we can ensure customers of the quality of our business due to our

physical presence.

Initially, we intend to adopt this business model primarily in our nearby surroundings, since promoting the quality of our

products and ensuring consumers about our brands seems wonderful.

b. Business-to-Customers model: The business-to-customer model is one of the most extensively used and adopted business

models, as it allows us to offer our products directly to the consumer while lowering the number of distribution channels.
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Financial Planning

Starting a business without sufficient planning is pointless unless there is a specific plan for making income through consumers

about product quality, pricing comparisons, and so forth (Adam & Frimpong, 2017). We need to be able to compare products with

those of opponents and ensure consumers that our product or service is better in some aspect. We will focus on

sales, expenditures, operational profitability, and startup costs.

At the initial phase, we are not engaged in direct farming of sugarcane crops, however, we will make a contract with sugarcane

farmers as they will provide us with raw sugarcane crops. They will supply us with sugarcane as per our demand & need, so we will

pay a reasonable amount for this. Caneblast juice firm is already in contact with some farmers of the dang district who are producing

the sugarcane juice. This idea is also beneficiary for the farmers who are willing to sell their products and services.

Sales/Revenue Projection

Januar Februar Marc Apri Augus Septembe Octobe Novembe Decembe

Particular y y h l May June July t r r r r 2023 2024 2025 2026

Sales Units                                

Small 360 420 600 750 900 1170 1200 1320 1350 1350 1350 900 14400 18000 19000 22000

Big 150 140 300 450 450 600 750 875 810 750 450 300 8400 9000 10000 11000
Sales Price
per glass                                

Small 25 25 30 30 30 30 30 30 30 30 30 30 40 40 50 50

Big 50 50 60 60 60 60 60 60 60 60 60 60 80 80 100 100

Sales
revenue                                
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2250 2700 3510 3600 110000

Small 9000 10500 18000 0 0 0 0 39600 40500 40500 40500 27000 576000 720000 950000 0
2700 2700 3600 4500 100000 110000
Big 7500 7000 18000 0 0 0 0 52500 48600 45000 27000 18000 672000 720000 0 0
Total Sales 4950 5400 7110 8100 124800 144000 195000 220000
Revenue 16500 17500 36000 0 0 0 0 92100 89100 85500 67500 45000 0 0 0 0

The accompanying table contains detailed information on how the company plans to earn sales revenue. As a result, I've

considered delivering the drink in small and large size glasses, with different rates based on the size of the glass. In the months of

January and February, I prefer to charge Rs 50 for large glasses and Rs 25 for small glasses. From March to December, I considered

raising the sales price for each drink, such that a small drink would cost Rs 30 and a large drink would cost Rs 60. It would set you

back Rs 60. Furthermore, I have segmented the sales revenue that my companies will generate over the next five years. The first year's

sales income would be 704800, the second year would be 1248000, the third year would be 1440000, the fourth year would be

1950000, and the fifth year would be 2200000.

Five-Year Pro Forma P&L Statement

This profit and loss statement shows the company's income and expenses throughout time and aids in the evaluation of the

financial reporting (Clark, 2008).

Five year Pro Forma P &L statement is shown below:

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Janua Febru Marc Augus Septem Octob Novem Decem

Particulars ry ary h April May June July t ber er ber ber 2023 2024 2025 2026
Net Sales 3600 4950 5400 12480 14400 19500 22000
Revenue 16500 17500 0 0 0 71100 81000 92100 89100 85500 67500 45000 00 00 00 00
Cost of Goods 2330 2570 3100 20720 40500 49700 59800
Sold 7000 12000 0 0 0 31500 34800 30250 29950 30500 20000 19800 0 0 0 0
1270 2380 2300 10408 10350 14530 16020
Gross Profit 9500 5500 0 0 0 39600 46200 61850 59150 55000 47500 25200 00 00 00 00
Operating
Expenses                                
Plastics glass
or steel glass 1000 1000 2000 2000 3000 3000 3000 2000 1000 1000 600 300 20000 20000 20000 20000
Transportatio
n 2250 2250 3000 3500 3700 4300 4500 4700 5000 5000 5000 2000 50000 50000 50000 50000
Machinery 1000 1000 1000 1000 2000 2000 2000 2500 2500 2500 2500 1000 25000 27000 29000 30000
Utilities 2000 2000 2000 2000 2200 2420 2662 2750 3025 3300 3000 1000 35000 45000 50000 50000
Cold store 2500 2500 3500 5000 5000 5000 5000 5000 5000 5000 5000 5000 55000 60000 75000 90000
1000 1000 1000 12000 15000 20000 20000
Rent 5000 5000 0 0 0 10000 10000 10000 10000 10000 10000 5000 0 0 0 0
                                 
1000 1500 1500 25000 30000 35000 40000
Salary 0 0 0 0 0 20000 20000 20000 20000 20000 20000 20000 0 0 0 0
Miscellaneous 1000 1000 1000 1000 2000 2000 2000 2000 2000 2000 1000 1000 15000 20000 25000 30000
2250 2450 2790 32000 37200 44900 47000
Total Expenses 14750 14750 0 0 0 28720 29162 28950 28525 28800 27100 15300 0 0 0 0
Earnings
Before Interest
Tax and 72080 66300 10040 11320
Depreciation -5250 -9250 -9800 -700 -4900 10880 17038 32900 30625 26200 20400 9900 0 0 00 00
0.0083
  33 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Less:
Depreciation
(Fixed assets) 5314.4 4782.9 4304.67 3874.2 3486.78 3138.10 17824. 16041. 14437. 12993.
(10%) 10000 9000 8100 7290 6561 5904.9 1 69 2 05 4 6 3 87 68 91
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Less: Interest 0                              
- -
Profit/Loss - 1790 1146 11723. 28117. 26320.3 22325. 16913.2 6761.89 70297 64695 98956 11190
Before Tax 15250 -18250 0 -7990 1 4975.1 59 03 3 8 2 4 5.7 8.1 2.3 06
- - - -
Less: Tax 380.20 372.9 166.4 238.7 103.64 244.24 585.77 548.340 465.12 352.358 140.872 14645. 13478. 20615. 23312.
(25%) 0 8 17 58 71 79 15 15 2 07 7 8 33 29 88 63
- - - -
Net Profit/Loss - 17869. 1752 7823. 1122 4871.4 11479. 27531. 25771.9 21860. 16560.8 6621.02 68833 63347 96894 10956
After Tax 15250 8 7.1 54 2.2 52 35 26 9 67 6 1 0.4 9.8 6.4 93

Working Note:

Cost of
Goods Sold 7000 12000 23300 25700 31000 31500 34800 30250 29950 30500 20000 19800 207200 405000 497000 598000

Opening
Inventories   3,000 2,000 3,700 3,000 2,000 2,500 2,700 2,450 2,500 2,000 2,000 2,200 95,000 90,000 93,000

Purchase 5,000 5,000 15,000 15,000 20,000 22,000 25,000 20,000 20,000 20,000 10,000 10,000 200,000 250,000 300,000 350,000

Direct
Expense 5,000 6,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 100,000 150,000 200,000 250,000

Less: Closing
Inventors 3,000 2,000 3,700 3,000 2,000 2,500 2,700 2,450 2,500 2,000 2,000 2,200 95,000 90,000 93,000 95,000

COGS 7,000 12,000 23,300 25,700 31,000 31,500 34,800 30,250 29,950 30,500 20,000 19,800 207,200 405,000 497,000 598,000

All entrepreneurs who have considered starting their own business must be prepared since, while operating the business during

the planning phase, the business operations will be hampered because the firm will not be able to reach the target market. As an
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example, at the start of my business, it was difficult to get a market because the demand for the drink is lower due to a lack of

knowledge about the existence of this business, not because of its taste. Similarly, when estimating the firm's profit and loss, it

discovered the same outcome of sales being down at first, but as the business became more acquainted to the client, the profit of the

company has been rapidly increasing. For example, the company made 45003.95 profit in the first year, 688330.4 profit in the second

year, 633479.8 profit in the third year, 968946.4 profit in the fourth year, and 1095693 profit in the fifth year.

Cash Flow Statement

The cash flow statement represents the inflow and outflow of cash in the firm and aids in understanding the company's

liquidity situation (Broome, 2009). Cash flow statements give a clearer view of how much money is accessible. In other words, a

company may appear prosperous "on paper," nevertheless lack the cash needed to rebuild inventory or pay critical operating expenses

like rent and electricity.

It is critical to understand a company's cash situation to make informed business decisions (Fulmer, 2002). Regardless of

declared success, we as business owners must make every effort to understand and stay in touch with the financial side of our

operations.

The Cash flow statement of Canblast juice is given below:

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Janua Febru Marc Augus Septem Octob Novem Decem

Particular ry ary h April May June July t ber er ber ber 2023 2024 2025 2026
Cash flow
from
Operating
Activities                                
Net Profit/ - - - -
Loss After - 17869. 17527 7823.5 11222. 4871.4 11479. 27531. 25771.9 21860. 16560.8 6621.0 68833 63347 96894 10956
Tax 15250 8 .1 4 2 52 35 26 9 67 6 21 0.4 9.8 6.4 93
Add: 10000. 5314.4 4782.9 4304.67 3874.2 3486.78 3138.1 17824. 16041. 14437. 12993.
Depreciation 01 9000 8100 7290 6561 5904.9 1 69 2 05 4 06 3 87 68 91
Less:
Increase in
inventory 3000 -1000 1700 -700 -1000 500 200 -250 50 -500 0 200 92800 -5000 3000 2000
Net Cash
Flow from - - -
Operating 7869.7 11127 166.45 3661.2 10276. 16593. 32564. 30026.6 26234. 20047.6 9559.1 61335 65452 98038 11066
Activities -8250 9 .1 83 3 35 76 23 6 88 4 27 4.7 1.7 4.1 87
Cash Flow
from
Investing
Activities                                
- -
10000 15000
Fixed Assets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Gain/Loss in
the sale of
Fixed Assets   0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Cash
Flow from - -
Investing 10000 15000
Activities 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash Flow
from
Financing
Activities                                
Equity Share
Capital   0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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Capital 50000
Introduced 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Interest on
Debt 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dividend
Paid 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Cash
Flow from
Financing 50000
Activities 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Increase
in Cash and - - -
Cash 39175 7869.7 11127 166.45 3661.2 10276. 16593. 32564. 30026.6 26234. 20047.6 9559.1 46335 65452 98038 11066
Equivalents 0 9 .1 83 3 35 76 23 6 88 4 27 4.7 1.7 4.1 87
Cash and
Cash
Equivalent: 39175 38388 37275 37291 36925 37953 39612 428692. 45871 484954. 505001 51456 97791 16324 26128
Opening   0 0.2 3.1 9.6 8.4 4.7 8.5 7 9.4 2 .9 1 5.7 37 21
Cash and
Cash
Equivalent: 39175 38388 37275 37291 36925 37953 39612 42869 458719. 48495 505001. 97791 16324 26128 37195
Closing 0 0.2 3.1 9.6 8.4 4.7 8.5 2.7 4 4.2 9 514561 5.7 37 21 09

According to the above table, caneblast juice has a low cash inflow at the beginning of the fiscal year when compared to the

other four fiscal years' cash flow information. Furthermore, it was shown that the company's sales income has been increasing year

after year, allowing the organization to operate profitably.

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Balance Sheet

A balance sheet is a financial statement that shows the assets, liabilities, and shareholders’ equity of a corporation (Gadau &

Man, 2012). The Canblast juice company's five-year pro forma balance sheet is shown below.

Jan Oct
Particu uar Febr Ma Apr Ma Jun Aug Septe obe Nove Dece
lars y uary rch il y e July ust mber r mber mber 2023 2024 2025 2026
Equity
and
Liabilit
ies                                
Shareh
olders
Equity 500, 500, 500, 500, 500, 500, 500, 500, 500,0 500, 500,0 500,0 500, 500, 500, 500,
Capital 000 000 000 000 000 000 000 000 00 000 00 00 000 000 000 000
Profit/
Loss
from
PL 1,36 2,33 3,43
accoun (15, (33,1 (50, (58, (69, (64, (53, (25, 21,8 38,38 45,00 733, 6,81 5,76 1,45
t 250) 20) 647) 470) 693) 821) 342) 811) (39) 22 3 4 334 4 1 4

Debt                                

Total 1,23 1,86 2,83 3,93

Liabilit 484, 466, 449, 441, 430, 435, 446, 474, 499,9 521, 538,3 545,0 3,33 6,81 5,76 1,45
ies 750 880 353 530 307 179 658 189 61 822 83 04 4 4 1 4

Assets                                

Fixed 100, 90,0 81,0 72,9 65,6 59,0 53,1 47,8 43,04 38,7 34,86 31,38 178, 160, 144, 129,
Assets 000 00 00 00 10 49 44 30 7 42 8 1 243 419 377 939
Less:
Deprec 10,0 9,00 8,10 7,29 6,56 5,90 5,31 4,78 3,87 17,8 16,0 14,4 12,9
iation 00 0 0 0 1 5 4 3 4,305 4 3,487 3,138 24 42 38 94

3,00 2,00 3,70 3,00 2,00 2,50 2,70 2,45 2,00 95,0 90,0 93,0 95,0
Stock 0 0 0 0 0 0 0 0 2,500 0 2,000 2,200 00 00 00 00
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1,63 2,61 3,71

391, 383, 372, 372, 369, 379, 396, 428, 458,7 484, 505,0 514,5 977, 2,43 2,82 9,50
Cash 750 880 753 920 258 535 128 693 19 954 02 61 916 7 1 9

1,23 1,86 2,83 3,93

Total 484, 466, 449, 441, 430, 435, 446, 474, 499,9 521, 538,3 545,0 3,33 6,81 5,76 1,45
Assets 750 880 353 530 307 179 658 189 61 822 83 04 4 4 1 4

The balance statement of the caneblast juice company indicates that the company's assets and liabilities are equal. In the

current liabilities account, the corporation has mentioned share equity and profit and loss, but in the assets account, it has listed stock,

cash, and fixed assets. This company's balance sheet aids in determining the company's performance as well as the source of the

company's assets and liabilities. Simply said, the corporate status of caneblast juice has been profitable as a result of the increased

demand for the drink.

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Conclusion

Financial planning provides a clear image of what can be accomplished in a specified timeframe and also assists in attracting

investors. Profit and loss statements, cash flow statements, and balance sheets can all be used in financial planning. While reviewing a

company's financial status, a balance sheet is a crucial appropriate analysis tool for owners and stakeholders. The paperwork includes

detailed information about the assets and liabilities of a company for a given period. We can have a better understanding of the

company's performance by using such data.

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References

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Aleem, S., & Ramteke, P. W. (2017). Sensory and Nutritional study of locally available fresh and processed Fruit and Vegetable

juices in Allahabad City. The Pharma Innovation, 380-386.

Broome, W. (2009). Statement of Cash Flows: Time for Change. . Financial Analysts Journal, 16-22; Retrieved from

https://doi.org/10.2469/faj.v60.n2.2605.

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