Investment Plan For A Furniture Factory

DESIGN SERVICES „FUEL AND BIODIESEL TANK FARM”
DUMITRU BODONI Cristina

GLEJARU Georgeta Liliana
POPA Răzvan
Coordinator:
Radu RĂILEANU
EXPANSION AND MODERNISATION OF THE PRODUCTION

CAPACITY EU FOUNDED PROGRAMS
OF THE LILICRI FURNITURE FACTORY
1
SUMMARY
2
1 GENERAL INFORMATION
This document is elaborated based on the following input data:
Expansion and modernisation of the production capacity
Project promoter: „Furniture” Factory
„Furniture” Factory commissioned a study which yielded the following results:
1. manufacturing capacity is low;
2. manufacturing space is insufficient;
3. manufacturing processes and operations are obsolete, due to the old equipment and technologies
currently in place;
4. Manufacturing efficiently is small;
5. Existing personnel is not qualified to use new manufacturing and transport equipment;
6. Many people from the region have migrated to Spain and Italy
7. the capacity of the factory to attract and retain qualified personnel is very limited;
8. The company does not possess licenses to operate new manufacturing and transport machines;
9. Company losses are very big, and its regional competitiveness is low;
10. Current technologies are a threat to the environment.
3
2 STAKEHOLDERS’ ANALYSIS
The following stakeholders are identified:
1. Owner – General Manager of LILCRI Company
2. Designer of the technical documentation – Technical Manager of ROZA S.R.L.
3. Financial Manager of LILCRI Company
4. Project Manager
5. Team
6. Equipment suppliers
7. Authorities involved in approvals process
8. NGO’s for protecting forests
9. Clients/Customers
10. Employees of the furniture factory
11. Retailers
VERY IMPORTANT STAKEHOLDERS DIAGRAMA
high
1
2
CONSULT
INVOLVE 7
INFLUENCE
medium 4
MONITOR INFORM
low 8 6
Low medium high
IMPACT
4
Stakeholder Name Impact Influence What is important to the How could the How could the Strategy for engaging the
How much does the How much influence do stakeholder? stakeholder contribute to stakeholder block the stakeholder
project impact them? they have over the project? the project? project?
(Low, Medium, High) (Low, Medium, High)
Owner – General High High Increasing its turnover. To assure all resources To not sign the contract Monthly information regarding the
Manager of LILCRI Maintaining its business necessary for the design progress of the design work
Company on the market
Client – Technical High High Having the design in time Having a good inquiry with To a have a Monthly Informing him about the
Manager of ROZA S.R.L. to be implemented all necessary data and supplementary requests stages of the project.
Having the all approvals to requests for design that modify the initial
start of construction phase development technical solution
Financial Manager of Medium Low Diminishing the extra To assure the cost of Printing stories that Informing about the resource
LILCRI Company expenses design in time oppose the new reforms monitoring (BCWS/BSWP and
ACWP in man-hours terms)
Project Manager High Medium Respecting the milestones To manage all the project To elaborate a wrong Encouraging innovation and
and delivery terms without phases, to have a good planning creativity
extra costs relation with all To not take into
High qualitative project stakeholders consideration all the
risks
Team Medium Medium Its work to be recognised To be a team without Going on strike To motivate the team and to have
High qualitative project adversarial attitude weekly round-table discussions
Equipment suppliers Medium Low Their equipment to be To provide all information Not to provide in time Choosing their offers for the
chosen in design and to be necessary to develop the their offers design and recommending them
supplied in construction- design as equipment suppliers
erection phase
Authorities involved in High High The design and all To give their approvals in Not to sign their Respecting all the demands
approvals process documentation to follow time without extra costs approvals in the legal requested by law
the law in force time (as it was planned
into the initial Gantt
Graph)
EXPANSION AND MODERNISATION OF THE PRODUCTION CAPACITY
Stakeholder Name Impact Influence What is important to the How could the How could the Strategy for engaging the
How much does the How much influence do stakeholder? stakeholder contribute to stakeholder block the stakeholder
project impact them? they have over the project? the project? project?
(Low, Medium, High) (Low, Medium, High)
NGO’s for protection of Medium Medium The tank farm having no or To understand that the To submit the To inform about the benefits of
Black Sea and minimum impact on Black design is for sustainable memorandum to the the project for Constanta
Environment Sea’ Ecosystem development in Constanta authorities implied in the
approvals necessary for
the construction of tank
farm
3 PROBLEM TREE
4 OBJECTIVE TREE WITH IN/OUT STRATEGY
5 LOGFRAME
6 APPLICATION FORM
6.1 Existing situation

The company LILICRI S.R.L. is a company 100% privately owned. The company has a social capital of 200.000 lei.
The company has two main activities, respectively:
 the furniture manufacturing
 the representative of the international company – WEINING Austria, which provide the equipment for furniture factories.
According to the classification of activities in the national economy (CAEN), production of furniture is carried out through four CAEN codes and our
company carries out its activities based on the following codes:
- 3101 - Manufacture of furniture for offices and shops;
- 3102 - Manufacture of
kitchen furniture;
- 3109 - Manufacture of furniture nec (not included in the previous classifications) and
- 4533 – Installation work of machinery and equipment for buildings and civil engineering works.
When we had set up a furniture factory, our main objective was to reach a larger number of customers, producing and selling the most diversified
furniture and equipment.
The following business plan reflects that in our factory it would be able to produce the manufacture of office furniture sets individuals, for offices and
shops (e.g. pharmaceutical domain).
Of the four CAEN codes above, only the one of four is a special one, for equipment and machinery providing. Other types codes are for the same kind
of the furniture manufacturing that can be produced using the same technological stream.
This investment is planned for the furniture manufacturing activity.
The main objective is to provide a high quality office furniture in the shortest time.
Our main products are the small office furniture, especially offices, computer tables - often equipped with keyboard holders, central unit, printer or for
all of these, conference tables, cabinets - shelves, mobile bodies, chairs e.g. with the innovative style.
We currently have both demands that we may have work for the next two years.
For manufacturing our products we currently work with the equipment listed below:
- 1 compressor;
- 1 exhaust system;
- 1 drilling machine;
- 1 engraving machine;
- 1 circular saw;
- 1 processing center;
- 1 milling machine.
6.2 Proposal situation with investment

Our main objective is to increase the capacity, upgrading the existing production line, to buy a truck and to expand the space for the working hale.
We are planning to buy: a technological line for making furniture (WEINIG Turbo - S2000-400), small tools and a truck.
The technological line is for the construction timber sector (Servo-driven automatic turntable for maximum wood entry length of 2 m, 3 m or even 4 m,
shaper heights (timber width) up to 280 mm, shaper body is very heavy design double tensioning station on the shaping unit).
The small tools for the final assembly of the office furniture are the following:
- 1 drilling machine;
- 1 electric pistol for staples and nails;
- 1 electric pendular saw;
- 1 hot air blower.
For the new technological line there are necessary civil works, as foundation and utilities connections (water, power, compressed air).
We will buy a truck for delivering the furniture at the customers' home or office and for providing the raw materials.
The cost of investment is 1.800.000 lei, respectively:

 Civil works: 1.080.000 lei (60% from total investment)
 New technological line and new small tools: 540.000 lei (30% from total investment)
 New truck: 180.000 lei (10% from total investment)
The financial plan for this investment is composed by:
 to submit our project at REGIO PROGRAM, Priority Axis No. 2 Improving the competitiveness of small and medium-sized enterprises.
 to ask for a loan at CEC
bank (or a similar one)
 to buy a truck in leasing
 to autofinance and have capital contribution,
7 Products and market

7.1 Demand
At the end of last year, we realised a market research through the internet. Our scope was to see the real situation in the furniture industry, demand
and supply on the furniture market.
From this study, we noticed the following opportunities related to the manufacture and sale of office furniture sets:
 The demand for luxury furniture is increasing, especially in Europe after 2008.
 The business area on the outskirts of our capital is growing in the last five years and there are a lot of new buildings.
 The continuous increase in the number of Internet users over the last decade has led to increase in the number of employees working from home
and, implicitly, they reorganize their working space inside the home.
These are the most important real opportunities for our business.
Here we can include the demand for computers, desks, office chairs, and filing cabinets. This is also an important opportunity for us.
7.2 Customers (market segmentation)

We will focus on the target market, low-to-middle class residents in the metropolitan area Bucharest and Ilfov county), along with local businesses that
are located inside or outside the Local and Industrial area situated in the neighbor counties.
Typically, the target individual customers prefer to order custom furniture more than once in three years, as an occasional alternative to an expensive
one. Businesses prefer to buy (or to change) the office furniture sets for their employees, or on different occasions or less exclusive business.
We will strive to establish a
reputable image from that target market's perspective, by offering excellent quality for furniture, convenience, expedient delivery services, service
excellence, and by partnering with local businesses and other interested organizations in our community.
By always focusing on meeting or exceeding our customers' needs, wants and expectations, we will be able to build customer loyalty and word-of-
mouth sales that many of our competitors are lacking.
Our strategy is based on delivering a strong customer value proposition in a niche market. We are looking to offer our products in the city and its
surrounding areas a new choice in furniture options.
We are building our marketing infrastructure so that we can eventually reach more customers. We focus on satisfying the needs of low-to-middle class
residents and companies located inside or outside the capital.
We intend to use various forms of marketing communication as an efficient way to reach our target market and raise their awareness and their furniture
service offerings.
In addition, we will use the effective advertising tools to promote the business.
The advertising on internet is a common way to advertise, nowadays.
Adequate funding has been accounted for when projecting the promotion expenses. We intend to spend the marketing lei in the most cost-effective
way. Therefore, many other advertising options will be evaluated during the project implementation, to make sure that we achieve best results.
7.3 Competition
The estimated total market in the furniture manufacturing in the capital of our country is a growing low-to-middle-class area, counting more than one
two million residents.
From 2015 the furniture industry has begun to recover, at the end of 2017.
The value of furniture
manufacturing continued to grow in 2016, reaching € 2,545 billion, up 6.7% from 2015. Then, in 2017, the growth was supported primarily by the
increase in exports that reached 2.189 billion euros, but also by the growth of the domestic market1.
Currently, in our country are approx. 3000 furniture factories, without franchise as IKEA or JYSK.
8 Marketing mix
The businesses centers’ market is growing of these residents or different companies.
With continued growth in the area, opportunities to serve the Local Bay residents will increase. The company will sell to companies and individuals,
but it will also accept some occasional custom furniture in this county and the and in neighboring counties.
The main market segments are:
 individuals (retail customers)
 local businesses (corporate customers) which, in terms of purchase orders, typically make larger orders for their employees and business
needs
 over the internet.
8.1 Products
Our products are designed for the offices and they are going to be delivered to the customer value proposition in a niche market of.
In the last two years we have built our marketing infrastructure so that we can eventually reach more customers with our furniture offering. We focus
on satisfying the needs of low-to-middle class residents and companies located inside or outside the Ilfov County.
Our main products are the small office furniture, especially offices, computer tables - often equipped with keyboard holders, central unit, printer or for
all of these, conference tables, cabinets, mobile bodies, chairs e.g. with the innovative style.
1 Catalin Tobescu. Industria mobilei performeaza. https://www.agerpres.ro/ots/2017/04/11/industria-lemnului-performeaza-11-50-03. Accesat la 11.01.2018.

8.2 Prices
On office furniture market the prices are variable due to the quality or/and the country where the furniture is made. So the average price for a office
furniture set (a desk, a printer table and a PC table, a chair, two cabinets, a mobile body).
Our office furniture set has about 4000 lei.
By replacing current raw materials with some of the higher quality, the new price/set will be min. 5000 lei in 2019 and 2020.
8.3 Distribution
Our management is expected to use resources wisely, operate profitably, pay debts, and abide by laws and regulations. Our management philosophy
is based on team work, responsibility, and mutual respect. People who work at our factory would want to be part of our team because we operate in
an environment that encourages creativity, diversity, growth, and performance.
The manager has successfully owned and operated a similar business in Piatra-Neamt, they have more than seven years relevant experience in the
industry, and hold various degrees and certificates in management and hospitality.
Our ordered furniture is sent with the help of courier companies or with the help of subcontractors. This has led to motivate us to ask for buying a track
(or leasing).
8.4 Forecasted revenues

The following table illustrate the sales forecast for four years.
Year Unitar price (lei) No. of set/month
2017 4000 16
2018 4000 19
2019 5000 31
2020 5000 37
The first few months from 2018 will be slower, a consequence of being a developed business, struggling to become more visible within this field, going
from little business to achieve a regular new clientele.
Profitability is projected to occur
during the first half of 2018 when the modernization of the factory would be done. The increasing sales forecast suggest an important potential growth.
Our projected sales are actually net sales, which consist of the gross proceeds from sales of merchandise -- gross sales -- less returns and allowances.
The projected average monthly sales in 2018 are approximately 4000 lei/set, this price will be increased in 2019 and 2020 because of manufacturing
new types of office furniture.
That means that the average projected 37 set/month of office furniture/day would be reached in 2020, which is a reasonable target. In periods of peak
sales, the normal operating capacity could be extended by working more than 8 hours per day. Therefore we believe that, from the operating point of
view, our sales forecast is feasible.
If each customer would order more or less 8 sets, it would mean about 60 ÷ 80 customers per year.
After this forecast we predict the figures for the next three years as it is mentioned in the following table:
Year 2017 2018 2019 2020
Turnover (lei) 768.000 921.600 1.843.200 2.211.840
Thus, we suppose that our turnover will be increased to achieve about three times of our turnover from 2017.
9 Production
means
9.1 White-collar employees. Wages
The white-collar employees are: the general manager (which is also production manager) and his assistant manager.
The company has two business lines:
 the furniture manufacturing
 the representative of the international company which provide the equipment for furniture factories.
The wages and contribution for these persons regarding this business line are represented like a fixed expenses in all years and are 30.000 lei/year.
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Wages and contribution, lei 30.000 30.000 30.000 30.000
% of turnover 3,9% 3,3% 1,6% 1,4%
9.2 Blue-collar employees. Wages

In 2017, the blue-collar employees are: four carpenters, two electricians, 1 designer, 1 woodworking processor (chippers). They are organized in two
teams, respectively two carpenters and 1 electrician for each team. The designer and the woodworking processor are working for all teams.
Note: Usually the designer is white-collar employee. However, in our factory, his responsibility is manage the blue-collars.
The average wage per month is 2.850 lei (with all contributions) for one employee.
After we made the investment, we plan to increase the number of teams to have 4 teams. The number of employees will be around 14 persons in 2019
and 16 persons in 2020.
The average wage per month will increased till 3.120 lei (with all contributions) for one employee in 2019 and 3340 lei in 2020.
The wages and contribution for blue-collar employers are variable expenses and are represented in the following table:
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Wages and contribution, lei 270.000 294.912 534.528 641.434
% of turnover 35,2% 32,00% 29,00% 29,00%
9.3 External services – expenses
The external services necessary are different services as: ITC, mailing, currier, etc.
These services assure the regular operation of the plant.
The expenses for these services are fixed expenses and are represented in the following table:
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
External services, lei 45.000 45.000 45.000 45.000
% of turnover 5,86% 4,88% 2,44% 2,03%
9.4 Raw materials, materials and energy. Expenses

For the production it is necessary to have:
 Row materials: timber, panel, wood.
 Materials: varnish, adhesives, nails.
 Power supply
 Water supply, etc.
For raw materials, materials and others, the variable expenses are mentioned in the following table:
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Raw materials, lei 150.000 230.400 737.280 884.736
% of turnover 19,5% 25,00% 40,00% 40,00%
10 Determining the
need of working capital
We took in consideration that we chose the following hypothesis:
 the average duration of raw materials storage is 30 days
 the average duration of materials storage is 10 days
 the average duration of finished product storage is 20 days
 for the clients, the discount rate of receivables is 2%, and days sales outstanding is 10 days
 for the raw material suppliers, the days payable outstanding is 60 days
 for the material suppliers, the days payable outstanding is 30 days
 for the external services suppliers, the days payable outstanding is 30 days.
The need of working capital is:
Year 2017 2018 2019 2020
VAT 19% 19% 19% 19%
Raw material stocks (Variable expenses)
Average duration of storage (days) 30 30 30 30
Partial need of working capital 14.875 22.848 73.114 87.736
Material stocks (fixed expenses)
Partial need of working capital 661 661 661 661
Finished products stocks
Clients
Discount rate of receivables 2% 2% 2% 2%
Share of discounted turnover (%) 1% 1% 1% 1%
Days sales outstanding 10 10 10 10
Year 2017 2018 2019 2020
Suppliers of raw materials (Variable
expenses)
Days payable outstanding 60 60 60 60
Partial need of working capital -29.750 -45.696 -146.227 -175.473
Suppliers of materials (Fixed expenses)
Suppliers of external services (Fixed
expenses)
The need of working capital 55.246 62.455 103.277 125.088
Variation of the need of working capital 7.208 40.822 21.812
11 Simulating various investment options

Hypotheses:
 The useful life for civil works is 40 years
 The useful life for new technological line and small tools is 10 years
 The useful life for truck is 3 years
 The annual depreciation of existing assets is estimated at 55.000 lei
 The tax on income (%) is 16%
 The tangible assets (gross amount) for the existing situation are estimated at 1.200.000 lei
 The liquidities at the beginning of 2017 are estimated at 680.000 lei
 The Social capital is 200.000 lei
 The Reported result from 2016 is 6.000 lei.
For investment, we present four
options, respectively:
 Option 1: Capital capitalization + Loan + Leasing + Grants
 Option 2: Capital capitalization + Leasing + Grants
 Option 3: Capital capitalization + Loan + Grants
 Option 4: Capital capitalization + Leasing + Loan
11.1 Option 1: Capital
capitalization + Loan + Leasing + Grants
Hypotheses:
 The Grant of REGIO PROGRAM, is in amount of 900.000 lei (which ii is 50% of total investment value)
 The leasing investment (truck) is in amount of 180.000 lei, with useful life of 3 years, an advance of 27.000 lei, leasing interest rate of 13%
and duration of the leasing contract of 3 years
 The loan of the bank is in amount of 720.000 lei, with annual interest rate of 14% and duration of the loan contract is 3 years
 The Company’s contribution is in amount of 180.000 lei, respectively Auto financing 90.000 lei and Capital contribution 90.000 lei.
INVESTMENT AND FINANCIAL PLAN

lei
Year 2018 2019 2020
Total investment 1.800.000 0 0
Investment 1 – civil works 1.080.000 0 0
Useful life (years) 40 40 40
Investment 2 – new technological line and small tools 540.000 0 0
Leasing investment – truck (FL) 180.000 0 0
Advance (% of the leasing investment) 0 0 0
Advance (lei) (A FL) 27.000 0 0
Residual value (% of the leasing investment) 20% 20% 20%
Residual value (lei) (Vr FL) 36.000 0 0
Financed value (FV) 117.000 0 0
Leasing interest rate 13% 13% 13%
Duration of the leasing contract (years) 3 3 3
New loans 720.000 0 0
Annual interest rate 14% 14% 14%
Year 2018 2019 2020
Duration of the loan contract (years) 3 3 3
Investment subsidies 900.000 0 0
Auto financing 90.000 0 0
Capital contribution 90.000 0 0
GROSS OPERATING
SURPLUS
lei
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Variable expenses 420.000 525.312 1.271.808 1.526.170
% of turnover 54,7 57,0 69,0 69,0
Raw materials 150.000 230.400 737.280 884.736
% of turnover 19,5% 25,00% 40,00% 40,00%
Wages and contribution 270.000 294.912 534.528 641.434
% of turnover 35,2% 32,00% 29,00% 29,00%
Fixed expenses 95.000 95.000 95.000 95.000
% of turnover 12,4% 10,3% 5,2% 4,3%
Materials 20.000 20.000 20.000 20.000
% of turnover 2,6% 2,2% 1,1% 0,9%
External services 45.000 45.000 45.000 45.000
% of turnover 5,86% 4,88% 2,44% 2,03%
% of turnover 3,9% 3,3% 1,6% 1,4%
Total operating expenses 515.000 620.312 1.366.808 1.621.170
% of turnover 67,06% 67,31% 74,15% 73,30%
Gross operating surplus 253.000 301.288 476.392 590.670
% of turnover 32,9% 32,7% 25,8% 26,7%
THE BALANCE SHEET

lei
Year 2017 2018 2019 2020
FIXED ASSETS 1.145.000 2.890.000 2.694.000 2.498.000
Tangible assets (gross amount) 1.200.000 2.945.000 2.890.000 2.694.000
Deduction 55.000 55.000 196.000 196.000
Year 2017 2018 2019 2020
Tangible assets (net amount) 1.145.000 2.890.000 2.694.000 2.498.000
CURRENT ASSETS 771.442 735.149 920.680 1.124.766
Raw materials and intermediate materials stocks 15.536 23.509 73.775 88.397
Finished products stocks 50.773 60.928 121.856 146.227
Clients 25.133 30.159 60.319 72.382
Liquidities 680.000 620.552 664.730 817.759
TOTAL ASSETS 1.916.442 3.625.149 3.614.680 3.622.766
CAPITAL 372.316 1.471.746 738.185 1.032.917
Social capital 200.000 290.000 290.000 290.000
Reported result 6.000 172.316 281.746 448.185
Net income 166.316 109.429 166.439 294.732
Subsidies for investments 900.000 0 0
LIABILITIES 36.196 645.473 468.565 181.918
Loans 593.331 315.892 0
Suppliers 36.196 52.142 152.673 181.918
TOTAL LIABILITIES AND EQUITY 408.512 2.117.219 1.206.750 1.214.836
SYNTHESIZING RESULTS (ROA, ROCE, ROE)

lei
Year 2017 2018 2019 2020
Operating result 198.000 246.288 280.392 394.670
Net income 166.316 109.429 166.439 294.732
Self-financing capacity 221.316 164.429 362.439 490.732
Total assets 1.916.442 3.625.149 3.614.680 3.622.766
Return on assets (%) 10% 6,79% 7,76% 10,89%
Equity 372.316 1.471.746 738.185 1.032.917
Loans 0 593.331 315.892 0
Permanent capital 372.316 2.065.077 1.054.077 1.032.917
Financial autonomy 1,0 1,4 1,4 1,0
Return on capital employed (%) 67,95% 14,59% 45,20% 57,18%
Return on equity (%) 44,67% 7,44% 22,55% 28,53%
11.2 Option 2: Capital capitalization + Leasing + Grants

Hypotheses:
lei
Year 2018 2019 2020
Investment 2 – new technological line and
small tools 540.000 0 0
Leasing investment - truck 180.000 0 0
Advance (lei) 27.000 0 0
Residual value (lei) 36.000 0 0
Financed value 117.000 0 0
New loans 0 0 0
Year 2018 2019 2020
GROSS OPERATING
SURPLUS
lei
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Variabile expenses 420.000 525.312 1.271.808 1.526.170
% of turnover 54,7 57% 69% 69%
Raw materials 150.000 230.400 737.280 884.736
% of turnover 19,5% 25% 40% 40%
% of turnover 35,2% 32% 29% 29%
Fixed expenses 95.000 95.000 95.000 95.000
% of turnover 12,4% 10,31% 5,15% 4,30%
Materials 20.000 20.000 20.000 20.000
% of turnover 2,6% 2,17% 1,09% 0,90%
% of turnover 5,9% 4,88% 2,44% 2,03%
% of turnover 3,9% 3,26% 1,63% 1,36%
% of turnover 67,1% 67,31% 74,15% 73,30%
% of turnover 32,9% 32,69% 25,85% 26,70%
THE BALANCE SHEET

lei
Year 2017 2018 2019 2020
FIXED ASSETS 1.145.000 2.749.000 2.553.000 2.357.000
Deduction 55.000 196.000 196.000 196.000
Year 2017 2018 2019 2020
CURRENT ASSETS 771.442 331.707 815.926 1.324.045
Clients 25.133 30.159 60.319 72.382
Liquidities 680.000 217.111 559.977 1.017.038
TOTAL ASSETS 1.916.442 3.080.707 3.368.926 3.681.045
CAPITAL 372.316 1.437.978 764.472 1.091.196
Social capital 200.000 290.000 290.000 290.000
Reported result 6.000 172.316 247.978 474.472
Net income 166.316 75.661 226.494 326.724
Subsidies for investments 900.000 0 0
LIABILITIES 36.196 134.800 196.524 181.918
Loans 82.658 43.851 0
Suppliers 36.196 52.142 152.673 181.918
TOTAL LIABILITIES AND EQUITY 408.512 1.572.777 960.996 1.273.115

lei
Year 2017 2018 2019 2020
Net income 166.316 75.661 226.494 326.724
Total assets 1.916.442 3.080.707 3.368.926 3.681.045
Return on assets (%) 10,3% 3,42% 8,32% 10,72%
Equity 372.316 1.437.978 764.472 1.091.196
Loans 0 82.658 43.851 0
Permanent capital 372.316 1.520.636 808.323 1.091.196
Return on equity (%) 44,7% 5,26% 29,63% 29,94%
capitalization + Loan + Grants
Hypotheses:
 The loan of the bank is in amount of 720.000 lei, with annual interest rate of 14% and duration of the loan contract is 3 years
lei
Year 2018 2019 2020
Investitii amortizabile 3 - truck 180.000 0 0
Leasing investment 0 0 0
Advance (% of the leasing investment) 0% 0% 0%
Advance (lei) 0 0 0
Residual value (% of the leasing investment) 180.000 0 0
Residual value (lei) 13% 13% 13%
Financed value 0 0 0
Leasing interest rate 0 0 0
New loans 720.000 0 0
GROSS OPERATING
SURPLUS
lei
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Variabile expenses 420.000 525.312 1.271.808 1.526.170
% of turnover 54,7 57,0 69,0 69,0
Raw materials 150.000 230.400 737.280 884.736
% of turnover 19,5% 25,0% 40% 40%
Wages and contribution 270.000 294.912,0 534.528,0 641.433,6
% of turnover 35,2% 32,0% 29,0% 29,0%
Fixed expenses 95.000 95.000 95.000 95.000
% of turnover 12,4% 10,3% 5,2% 4,3%
Materials 20.000 20.000 20.000 20.000
% of turnover 2,6% 2,2% 1,1% 0,9%
% of turnover 5,86% 4,88% 2,44% 2,03%
% of turnover 3,9% 3,3% 1,6% 1,4%
% of turnover 67,06% 67,31% 74,15% 73,30%
% of turnover 32,9% 32,7% 25,8% 26,7%
THE BALANCE SHEET

lei
Year 2017 2018 2019 2020
FIXED ASSETS 1.145.000 2.791.000 2.637.000 2.483.000
Deduction 55.000 154.000 154.000 154.000
CURRENT ASSETS 771.442 -218.890 7.757 253.764
Clients 25.133 30.159 60.319 72.382
Liquidities 680.000 -333.486 -248.193 -53.243
TOTAL ASSETS 1.916.442 2.572.110 2.644.756 2.736.764
CAPITAL 372.316 1.401.362 712.109 1.046.912
Social capital 200.000 290.000 290.002 290.004
Reported result 6.000 172.316 211.362 422.107
Net income 166.316 39.046 210.745 334.801
Subsidies for investments 0 900.000 0 0
LIABILITIES 36.196 562.815 424.714 181.918
Loans 0 510.673 272.041 0
Suppliers 36.196 52.142 152.673 181.918
TOTAL LIABILITIES AND EQUITY 408.512 1.964.177 1.136.823 1.228.831

lei
Year 2017 2018 2019 2020
Net income 166.316 39.046 210.745 334.801
Total assets 1.916.442 2.572.110 2.644.756 2.736.764
Return on assets (%) 10,3% 5,73% 12,19% 15,96%
Equity 372.316 1.401.362 712.109 1.046.912
Loans 0 510.673 272.041 0
Permanent capital 372.316 1.912.035 984.150 1.046.912
Return on equity (%) 44,7% 2,79% 29,59% 31,98%
capitalization + Leasing + Loan
Hypotheses:
 The loan of the bank is in amount of 1.620.000 lei, with annual interest rate of 14% and duration of the loan contract is 3 years
lei
Year 2018 2019 2020
Leasing investment - truck 180.000 0 0
Advance (lei) 27.000 0 0
Residual value (lei) 36.000 0 0
Financed value 117.000 0 0
New loans 1.620.000 0 0
Investment subsidies 0 0
GROSS OPERATING SURPLUS

lei
Year 2017 2018 2019 2020
Turnover 768.000 921.600 1.843.200 2.211.840
Variable expenses 420.000 525.312 1.271.808 1.526.170
% of turnover 54,7 57,0 69,0 69,0
Raw materials 150.000 230.400 737.280 884.736
% of turnover 19,5% 25,0% 40% 40%
Wages and contribution 270.000 294.912,0 534.528,0 641.433,6
% of turnover 35,2% 32,0% 29,0% 29,0%
Fixed expenses 95.000 95.000 95.000 95.000
% of turnover 12,4% 10,3% 5,2% 4,3%
Materials 20.000 20.000 20.000 20.000
% of turnover 2,6% 2,2% 1,1% 0,9%
% of turnover 5,86% 4,88% 2,44% 2,03%
% of turnover 3,9% 3,3% 1,6% 1,4%
% of turnover 67,06% 67,31% 74,15% 73,30%
% of turnover 32,9% 32,7% 25,8% 26,7%
THE BALANCE SHEET

lei
Year 2017 2018 2019 2020
FIXED ASSETS 1.145.000 2.749.000 2.553.000 2.357.000
Deduction 55.000 196.000 196.000 196.000
CURRENT ASSETS 771.442 390.210 202.382 26.427
Clients 25.133 30.159 60.319 72.382
Liquidities 680.000 275.614 -53.567 -280.580
TOTAL ASSETS 1.916.442 3.139.210 2.755.382 2.383.427
CAPITAL 372.316 347.466 438.836 693.578
Social capital 200.000 290.000 290.000 290.000
Reported result 6.000 172.316 57.466 148.836
Net income 166.316 -114.851 91.370 254.742
Subsidies for investments 0 0 0
LIABILITIES 36.196 1.283.815 808.617 181.918
Loans 1.231.673 655.943 0
Suppliers 36.196 52.142 152.673 181.918
TOTAL LIABILITIES AND EQUITY 408.512 1.631.280 1.247.452 875.497

lei
Year 2017 2018 2019 2020
Net income 166.316 -114.851 91.370 254.742
Total assets 1.916.442 3.139.210 2.755.382 2.383.427
Return on assets (%) 10,3% 3,35% 10,18% 16,56%
Equity 372.316 347466 438836 693578
Loans 0 1.231.673 655.943 0
Permanent capital 372.316 1.579.139 1.094.779 693.578
Return on equity (%) 44,67% -33,05% 20,82% 36,73%
12 Comparative
analysis of the previously presented options
Year 2017 2018 2019 2020
Option 1: Capital capitalization + Loan + Leasing + Grants
Return on assets (%) 10,3% 6,79% 7,76% 10,89%
Return on equity (%) 44,7% 7,44% 22,55% 28,53%
Option 2: Capital capitalization + Leasing + Grants
Return on assets (%) 10,3% 3,42% 8,32% 10,72%
Return on equity (%) 44,7% 5,26% 29,63% 29,94%
Option 3: Capital capitalization + Loan + Grants
Return on assets (%) 10,3% 5,73% 12,19% 15,96%
Return on equity (%) 44,7% 2,79% 29,59% 31,98%
Option 4: Capital capitalization + Leasing + Loan
Return on assets (%) 10,3% 3,35% 10,18% 16,56%
Return on equity (%) 44,7% -33,05% 20,82% 36,73%
Conclusions
1. The all four options are realistic and achievable.
2. From the point of view of the Return of assets (ROA) in all four options the company become efficient and the ascending trends reflects the
fact that the company is on the right direction. However, the third option is the best option. To the opposite, we do not take in consideration
the fourth option because we have a negative indicator in 2018.
3. From the point of view of the Return on capital employed (ROCE), all the options have the ascending trends. The best options are the third
and the forth, where the growing are better seen.
4. For the return on equity
(ROE), all the options are profitable. For the forth option, the loan is very expensive and it would be necessary an extra capital contribution for
the 2018.
5. It does not exist big differences between options where it is used the leasing and loans against the option where we use only the loans because
we have almost the same annually interest rates (13% respectively 14%) and the contracts’ duration is same (three years).
In our point of view, the best option for this investment is the third option with the capitalisation, loan and grant.

Investment Plan For A Furniture Factory

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DESIGN SERVICES „FUEL AND BIODIESEL TANK FARM”

DUMITRU BODONI Cristina

EXPANSION AND MODERNISATION OF THE PRODUCTION

VERY IMPORTANT STAKEHOLDERS DIAGRAMA

4 OBJECTIVE TREE WITH IN/OUT STRATEGY

6.1 Existing situation

This investment is planned for the furniture manufacturing activity.

6.2 Proposal situation with investment

The cost of investment is 1.800.000 lei, respectively:

7 Products and market

7.2 Customers (market segmentation)

1 Catalin Tobescu. Industria mobilei performeaza. https://www.agerpres.ro/ots/2017/04/11/industria-lemnului-performeaza-11-50-03. Accesat la 11.01.2018.

8.4 Forecasted revenues

9.2 Blue-collar employees. Wages

9.4 Raw materials, materials and energy. Expenses

11 Simulating various investment options

INVESTMENT AND FINANCIAL PLAN

THE BALANCE SHEET

SYNTHESIZING RESULTS (ROA, ROCE, ROE)

11.2 Option 2: Capital capitalization + Leasing + Grants

THE BALANCE SHEET

SYNTHESIZING RESULTS (ROA, ROCE, ROE)

THE BALANCE SHEET

SYNTHESIZING RESULTS (ROA, ROCE, ROE)

GROSS OPERATING SURPLUS

THE BALANCE SHEET

SYNTHESIZING RESULTS (ROA, ROCE, ROE)

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