References

Our business plan refers to the elements of this document to show how figures are being calculated.

Example: Profit and Loss Forecast refers to Gross Profit (read our legal notice)

Those to whom terminology is not familiar may also view the following online dictionaries:
~ Financial-dictionary.com
~ Merriam-webster.com

This business plan also gives links to other online sites so that the reader is able to compare
figures to those in similar industry. It must be noted that those links constantly change.
The content at those sites is based on the content providers and channels used.
We don't take any responsibility for the figures seen on other sites. Read our legal notice!

Information from the following web sites has also been used to write our own abstracts:

www.paktribune.com

For news worldwide see our links to online content: Newspapers.

Read our legal notice!

~ [000] Financial Dictionary

Gross Income

investopedia.com/terms
~ A company's revenue minus cost of goods sold. Also called "gross margin" and "gross profit".
~ This is an important number when analyzing a company, it indicates how efficiently management uses labor and supplies in the production process
United Industrial Reports First Quarter Results
United Industrial Corporation; manufacturers also UAVs
~ four product lines consisting of Unmanned Aerial Vehicles ("UAV Systems"),
~ Net sales from continuing operations for the three months ended March 31,
~ 2005 increased 31.7% to $107.5 million compared to $81.6 million for the three months ended March 31, 2004.
~ The gross margin percentage for continuing operations increased to 24.2% in the first quarter of 2005
~ from 21.4% during the same period in 2004.
~ Net sales for the Defense segment in the first quarter of 2005 increased 33.9% to $100.2 million
~ compared to $74.8 million for the first quarter of 2004.
~ This increase was primarily due to higher production and support in UAV Systems and higher sales in Services mainly due to the Biological Detection System program awarded in the third quarter of 2004.
~ Selling and administrative expenses in the Defense segment increased to $11.4 million, or 11.3% of sales
~ The Company received $95.8 million of new orders and/or funding for products and services during the first quarter of 2005, an increase of $20.3 million, or 26.9%, compared to the first quarter of 2004.
~ During the first quarter of 2005, the Company's UAV Systems was awarded $22.7 million of additional contracts
~ for ongoing logistical support for TUAV systems deployed worldwide as well as
~ an award for $2.5 million to completely refurbish Shadow TUAV equipment
~ that has been deployed in Operation Iraqi Freedom.
~ UAV Systems also received a $14.4 million award for an additional Shadow TUAV system
~ to be produced in conjunction with the eight Shadow TUAV systems ordered in December 2004.
~ Including these awards, funded backlog for UAV Systems at March 31, 2005 was approximately $220.2 million.
~ Test and Training Systems had a funded backlog of $39.1 million at March 31, 2005, primarily related to its Joint Service Electronic Combat Systems Tester program
~ On April 4, 2005, the Company acquired ESL Defence Limited ("ESL"), an electronic warfare ("EW") systems company based in the United Kingdom

Cash Sales

Cash sales are estimated to be 2/3 of total sales.

Links:
~ Financial Dictionary

Credit Sales

Credit sales are estimated to be zero(0) of total sales.

Links:
~ Financial Dictionary

Total Sales

United Industrial Corporation; $311Million,not only UAVs

Links:
~ Financial Dictionary

Variable cost

Variable costs are estimated to be 50% of sales.

Variable Cost - A cost that is directly proportional to the volume of output produced.
When production is zero, the variable cost is equal to zero
variable cost definition

Performance indicators for manufacturing
~ Variable manufacturing expense ratio: Variable manufacturing costs / Net sales,
~ Reflects variable manufacturing costs as a percentage of net sales

Example 2
cost of goods sold 55,55%!

Example 3
~ Variable costing: includes only variable manufacturing costs --- direct materials, direct labor, and variable manufacturing overhead.
~ The entire amount of fixed costs are expenses in the year incurred.
~ When calculating Contribution Margin, Variable Cost of Goods Sold and Variable Selling and Administrative Expenses
~ and subtracted from Sales.

Example 4 this looks good!
~ variable cost 62% of sales, 51% in one hardware company....

Links:
~ Financial Dictionary

Gross Profit

Gross profit is calculated as follows:

Sales minus the cost of goods sold
~ Gross Profit definition

Example 1
~ Gross profit as a percentage of net sales decreased to 26.9% in 1998 from 30.5% in 1997.

Links:
~ Financial Dictionary

Other Income

Other Income is estimated to be 25% of total sales and come from the following services:

research

develoment

design

system engineering; modelling,specifying,designing,programming

specification with clients

licensing

royalties

technical support

training

consulting

service

maintenance

selling of partner's products

developing standards

testing

prototyping

processing,filtering,analyses of target area sensor data

Note: the real value of FCs,FBs and FSs are the data and information they provide!

Links:
~ Financial Dictionary

Total Income

Total Income is calculated as follows:

Links:
~ Financial Dictionary

Overheads

Overheads is calculated as follows:

83 % of total income.

This leaves 17% as profit percent.

Links:
~ Financial Dictionary

Profit/Loss

Operating profit % of net sales is estimated to be 17,0%.

Compare:
~ Nokia 14,8% in 2004
~ In general good profit % of net sales seems to vary between 15 - 25 %
~ In defense sector sometimes near 30%

Links:
~ Financial Dictionary

Emloeyee's wages

~ Emloeyee's wages are expected to be 5% of total sales.
~ compare to Nokia; wages and salaries 9,58% of net sales in 2004

Links:
~ Financial Dictionary

Empoyeers' National Insurance

~ Empoyeers' National Insurance is calculated to be 9,0% of emloeyee's wages
~ compare to Nokia; pension expenses 0.86% of net sales, 9,02% of wages and salaries,year 2004

Links:
~ Financial Dictionary

Training of staff

Training of staff are calculated to be 1/24 = 4% of emloeyee's wages
This equals two weeks training per person during one year.

Links:
~ Financial Dictionary

Rent (rented premises)

Strategy is not to rent premises but own them as assets.

Links:
~ Financial Dictionary

Rates and water rates

Strategy is to negotiate free rates.

Links:
~ Financial Dictionary

Fuel (gas,petrol,electricity etc)

Fuel and electricity expenses are calculated to be 5% of total sales.

Testing of FC helicopter requires fuel; longer periods of testing is required.
Part of fuel is estimated to be provided by partners such as oil companies and oil producers.
Clients such as military test themselves.

Production requires electricity.

Links:
~ Financial Dictionary

Telephone

Telephone cost are estimated to be 3% of total sales.

Testing of FC helicopters and FB bases required telecommunication.

Links:
~ Financial Dictionary

Postage

Due to electronic transfer and handling of content and programs postage costs are practically zero.

Links:
~ Financial Dictionary

Printing and stationery

Due to electronic process and handling of printing and stationery costs are practically zero.

Links:
~ Financial Dictionary

Subsdcriptions and periodicals

Due to internet and digital channels and digital content subsdcriptions and periodicals cost are practically zero.

Links:
~ Financial Dictionary

Advertising and promotions

Advertising and promotions are estimated to be 5% of total sales.

Demonstrations are expensive requiring other aerial vehicles such as fighters and manned helicopters.

Links:
~ Financial Dictionary

Repairs and maintenance

Repairs and maintenance are estimated to be 5% of total sales.

Main costs are factory automation and development tools such as computer hardware and software.

Instead, devices to be manufactured and sold are expected to generate profit not cost:
FS sensors may damage when dropped or stop working.
FC helicopter is capable to deliver new sensors which means more sensor sales.

FC helicopter is rapidly deployable and droppable and designed to operate in risky environment.
Maintenance of FC helicopter is done either at FB base or at the client's base such as carrier.
FB base can handle several FC helicopters, each extra FC helicopter generates profit.

FB base may require service and maintenance.However, in most cases they are dropped to remote
and dangerous places with back-up FB base, which generates profit.

FC helicopter, FB base and FS sensors are designed to operate autonomously.

Links:
~ Financial Dictionary

Insurances

Insurance costs are estimated to be 5% of total sales.

Testing of FC helicopter is risky and requires safe and remote environment.
Clients are expected to arrange insurance for pilot tests.

Links:
~ Financial Dictionary

Professional fees

Professional fees are estimated to be 1% of total sales.

Autonomous and unmanned systems may require new legislation.
This is specially true with business and patrol series.
Military has so far used UAVs in enemy areas.
However, this might change. In Iraq fighting against terrorist may require
to use UAVs such as FCs in areas where there is other aerial vehicle traffic
and over civil buildings and facilities.

Links:
~ Financial Dictionary

Interest payments

Interest payments are estimated to be 7% of total sales.

Links:
~ Financial Dictionary

Bank charges

Bank charges are estimated to be 3% of total sales.

Company strategy is to sell using main currencies such as USD and sterling
and local currencies such as dirham in arab countries.

Euro currency is to be avoided, if possible.

Strategy to use several currencies causes more bank charges but reduces
currency risks.

Vehicles and travel costs

Vehicles and travel costs are estimated to be 5% of total sales.

Fighters and helicopters are needed to drop FC helicopters.
Older air vehicles can be used to minimize cost during initial tests.
Clients are expected to perform their own tests and to pay them.

Helicopters are needed to drop FB base with SOF troops.
Older manned helicopters can be used to minimize cost during initial tests.
Clients are expected to perform their own tests and to pay them.

Special vehicles are needed to test maintenance and support of FB bases
and to test fetching them from target area.
Clients are expected to perform their own tests and to pay them.

Simulators and models are needed to test FCs and FBs in laboratories.

Links:
~ Financial Dictionary

Depreciation - vehicles

Depreciation - vehicles is estimated to be 2% of total sales.

Vehicles to be used for own internal tests of FC,FB and FS do not neen to be the latest models.

Links:
~ Financial Dictionary

Depreciation - other

Depreciation - other is estimated to be 9% of total sales.

Factories producing FC helicopters and FB bases are highly automated.
Automation machinery is expected to depreciate in three to seven years.

Development of new models and testing them can not automated as well.
Computer software and hardware depreciate in one to three years.

Other expenses

Other expenses are estimated to be 1% of total sales.

Links:
~ Financial Dictionary

TOTAL OVERHEADS

Total overheads are estimated to be 57,3% of total sales.

Links:
~ Financial Dictionary

Venture capital

Investment period	3 years	6 years	12 years
Return of investment(ROI)	20:1	30:1	60:1
see forecast for more details:	Year 1-3 Quarterly cash flow	Profit and Loss 12 first years	Profit and Loss 12 first years
see when to take money out:	Year 3	Year 6	Year 12

See the venture capital estimations with the following series as the first one to start with:

Military

Patrol

Business
In all above scenarios core revenue comes from FB base and FC helicopters.

Return of investment can be high with the following smaller products:

(1) $$$ 70:1
FS sensors can be given to partners to be manufactured and developed.
In that case revenue would come from the core devices and
and from services such as data mining and processing of sensor data.

(2) $$$ 210:1
Mobile Freedom devices complement the core platform helicopter,base and sensors, but
they can be sold separately for mobile solutions. Licensing is also one option.
Risk are high; hydrogen H2 based products are new.
On the other hand demand for new kind of power solutions has grown rapidly in mobile markets
with over 1 billion mobile phone users and growing number of laptop owners!
Stakes are high in the mobile phone markets!

Private investments

Private investments with the following series as the first one to start with:

Business

In all scenarios core revenue comes from FB base and FC helicopters and they create the critical platform.

FS sensors can be given to partners to be manufactured and developed.
In that case revenue would come from the core devices and
and from services such as data mining and processing of sensor data.

Other freedom devices complement the core platform.
They can be sold separately for mobile solutions. Licensing is also one option.

Loans

Loans are calculated as follows:

Links:
~ Financial Dictionary

Cash sales

Cash sales are calculated as follows:

Links:
~ Financial Dictionary

Credit sales

Credit sales are calculated as follows:

Links:
~ Financial Dictionary

Asset disposals

Asset disposals are calculated as follows:

Links:
~ Financial Dictionary

Interest received

Interest received are calculated as follows:

Links:
~ Financial Dictionary

TOTAL RECEIPTS (R)

TOTAL RECEIPTS (R) is calculated as follows:

Links:
~ Financial Dictionary

PAYMENTS

PAYMENTS are calculated as follows:

Links:
~ Financial Dictionary

Premium on lease

Premium on lease is calculated as follows:

Links:
~ Financial Dictionary

Purchase of property

Purchase of property is calculated as follows:

Links:
~ Financial Dictionary

Purchase of plant,furniture and fittings

Purchase of plant,furniture and fittings is calculated as follows:

Links:
~ Financial Dictionary

Purchase of vehicles

Purchase of vehicles is calculated as follows:

Links:
~ Financial Dictionary

Raw materials

Raw materials is calculated as follows:

Links:
~ Financial Dictionary

Goods for sale

Goods for sale is calculated as follows:

Links:
~ Financial Dictionary

Employees' net wages

Employees' net wages are calculated as follows:

Links:
~ Financial Dictionary

Income tax and NI

Income tax and NI is calculated as follows:

Links:
~ Financial Dictionary

Training expenses

Training expenses are calculated as follows:

Links:
~ Financial Dictionary

Rent(rented premises)

Rent(rented premises) is calculated as follows:

Links:
~ Financial Dictionary

Rates and water rates

Rates and water rates are calculated as follows:

Links:
~ Financial Dictionary

Fuel(gas,electricity etc)

Fuel(gas,electricity etc) is calculated as follows:

Links:
~ Financial Dictionary

Telephone

Telephone is calculated as follows:

Links:
~ Financial Dictionary

Postage

Postage is calculated as follows:

Links:
~ Financial Dictionary

Printing and stationery

Printing and stationery is calculated as follows:

Links:
~ Financial Dictionary

Subscriptions and periodicals

Subscriptions and periodicals is calculated as follows:

Links:
~ Financial Dictionary

Advertising and promotions

Advertising and promotions is calculated as follows:

Links:
~ Financial Dictionary

Repairs and maintenance

Repairs and maintenance is calculated as follows:

Links:
~ Financial Dictionary

Vehicles and travel costs

Vehicles and travel costs are calculated as follows:

Links:
~ Financial Dictionary

Insurances

Insurances is calculated as follows:

Links:
~ Financial Dictionary

Professional fees

Professional fees is calculated as follows:

Links:
~ Financial Dictionary

Loans repayments

Loans repayments is calculated as follows:

Links:
~ Financial Dictionary

Bank charges

Bank charges is calculated as follows:

Links:
~ Financial Dictionary

Bank interest

Bank interest is calculated as follows:

Links:
~ Financial Dictionary

Value Added Tax

Value added Tax is calculated as follows:

Links:
~ Financial Dictionary

Other expenses

Other expenses are calculated as follows:

Links:
~ Financial Dictionary

TOTAL PAYMENTS (P)

Total payments (P) are calculated as follows:

70% of TOTAL RECEIPTS (R) years 1-4; production partly automated
This will leave 30% of which 15% is the net profit

50% of TOTAL RECEIPTS (R) years 5-8; production fully automated
This will leave 50% of which 20% is the net profit

30% of TOTAL RECEIPTS (R) years 9-12; mass production of all series
This will leave 70% of which 30% is the net profit

Links:
~ Financial Dictionary

RECEIPTS LESS PAYMENTS

Receipts less payments for the month,example, will yield the net income
for the month (M=R-P).

If you add the opening balance,this will indicate how much cash is left in the
company at the month's end(C= B + M).

This figure C for the month x becomes the opening balance for Month x+1
and the process is repeated.

Links:
~ Financial Dictionary

CASH REMAINING IN THE BUSINESS (C)

Cash remaining in the business is calculated as follows:

Links:
~ Financial Dictionary

Capital Item

Capital items are:

buildings

vehicles

testing sites

fixed wing aerial vehicles for test

rotary wing aerial vehicles for test

simulators

wind tunnel

test tools

industrial robots

assembly lines

Links:
~ Financial Dictionary

Initial cost

Initial cost, millions of USD dollar.Purchasing currency can be different such as sterling,dirham.

Links:
~ Financial Dictionary

Anticipated purchase date

Links:
~ Financial Dictionary

Method of payment

Links:
~ Financial Dictionary

Completion of loan or end of lease

Links:
~ Financial Dictionary

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~ Financial Dictionary