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Nafura: Water Fountains for Gardens - Business Plan and Financial Projections

Delys Darling has decided to start a shop selling water fountains for gardens and she has located a small shop at a retail park on the outskirts of town. The shop is to be called Nafura which is Arabic for Fountain and Delys intends to have the shop open for business on April 1 2021. Delys has been in business before and her Business Plan includes the following data:

Projected Sales













It is estimated that 80% of sales will be for cash with the remainder on credit. Credit sales will be received in the month after sale.

Although the business will stock a variety of water fountains, they are all the same size and will all sell for the same amount, of $180 per fountain.

Purchases and Inventories

The fountains are imported by a wholesaler in Auckland and each month Delys will purchase sufficient fountains to meet estimated sales for the following month. The average purchase price per fountain is $120.00. Payment will be made on the 20th of the month following purchase. (For the purposes of this assignment you may ignore any inventory held).

Non-Current Assets

  • It is business policy to use the straight line method of depreciation for all non-current assets.
  • The furniture and fittings for the shop cost $18,000 and have an expected life of 10 years with no residual value.
  • The office equipment cost $10,000 and it is estimated the useful life will be three years after which its residual value will be $1,000.


  • Delys has employed a salesperson, Mere Matua to work part-time for $2,400 a month. Mere Matua is paid on the 20thof each month for that month. (Ignore PAYE and other deductions).
  • General costs (including utilities, telephone, stationery, ISP provider etc.) are estimated at $500 a month, paid on the 20thof the month following purchase. In March Delys incurred $186 of general costs which is shown as an Accounts Payable as at 31 March 2021.
  • The rent on the building is $350 a month and is paid quarterly in advance and the first payment is due on 1 April 2021.
  • The annual insurance premium from 1 April 2021 to 31 March 2022 is $1,800 payable on 3 May 2021.
  • Delys intends to spend $500 a month on Advertising in magazines such as Home and Garden and their terms are that accounts are paid in the month the advertisements appear.
  • The balance of Cash at Bank on 1 April is $10,000.
  • Delys intends to draw $3,000 out of the business each month.


On the Data sheet, enter the given data which has not yet been entered

On the Sales, Purchases & NCA sheet, complete the revenue, cash collections, purchases and depreciation calculations for the quarter 1 April to 30 June 2021.

On the Cash Flow sheet, complete the Cash Flow Forecast for each of the three months April, May and June and the totals for the quarter 1 April to 30 June 2021. Note: Some cash flow rows have been named, but you will need to enter the remaining cash flow names yourself

On the Income Statement sheet, complete the Projected Income Statement for the quarter ended 30 June 2021. A month by month Income Statement is not required. Note: Some expenses have been identified but you need to enter the remaining expenses yourself.

Check the flexibility of your workbook by changing the estimated Average Selling Price per fountain on the Data sheet from $180 to $200. Enter the resulting Net Profit and Ending Cash Balance in the boxes provided on the Income Statement sheet (remember to change the Average Selling Price per fountain back to the original amount before submitting your assignment

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