A Guide to the Financial Analysis of Shrimp Farming

Texas

A Guide to the Financial Analysis of Shrimp Farming, 1999

(Spread Sheet for Micro Computers)

Wade L. Griffin, Professor Department of Agricultural Economics

Texas A&M University College Station, Texas 77843-2124

Tel. (409) 845-4291; Fax (409) 845-4261

and

Granvil D. Treece, Aquaculture Specialist Sea Grant College Program

Texas A&M University 1716 Briarcrest, Suite 702

Bryan, Texas 77802 Tel. (409) 845-7527; Fax (409) 845-7525

Email: [email protected]

TAMU-SG-99-502 June 1999

.. Publ;cal;on supported ;n part by Instilutional Granl NA86RGOO58 10 Texas Sea Granl College Pcogrum fcom t II the National Sea Grant Program, National Oceanic and Atmospheric Administration, U.S. Department of '~,"=.!!J' Commerce. 1999 Texas Sea Grant College Program. All rights reserved.

$25.00 Texas Sea Grant College Program I716 Briarcrest, Suite 603 Bryan, TX 77802

TAMU-SG-99-502 June 1999

NA86RG0058 A/F-l

Introduction In starting a shrimp culture business, you should begin with a business plan. The business plan

should contain a statement about the business and a financial plan. The statement about the

business should contain the following:

1. A description of your proposed venture.

2. A description of the market where your product will be sold and your marketing strategy.

3. An analysis of significant competitors.

4. A detailed explanation of the production processes and limitations.

5. A description of the organizational structure, showing how your firm will operate and listing

all personnel.

6. A description of external financing.

7. A development schedule showing the timing of the venture's development and critical dates

(Hanson et al. 1991).

Once the basic business plan has been presented, it is necessary to demonstrate the economic

feasibility over the planning horizon of the venture. Banks or investors require this type of

analysis to determining the financial success of the venture. The purpose for this program is to

assist the user in conducting an economic feasibility analysis of a shrimp farm. To achieve this

objective a financial analysis is conducted for a hypothetical intensive shrimp farm on the Texas

coast. The hard copy of the analysis accompanying the diskette shows the results of our analysis.

The diskette should be used to further "customize" the user's own business plan and financial

analysis by making appropriate substitutes, mainly in Tables lthrough 3. Note: Make changes in

either Gray cells only for Excel spreadsheets or Blue cells only for Lotus spreadsheets.

This financial model for a shrimp farm is developed in a fully integrated spreadsheet; that is,

all seven tables presented are fully integrated. For example, if you want to change your stocking

density, the model will automatically make all the changes to your cash flow, balance sheet,

income statement, and rate of return.

The seven tables are:

TABLE 1. Unit Cost, Production, and Financial Assumptions

TABLE 2. Construction and Equipment

TABLE 3. Farm Production, Inputs Used and Management

TABLE 4. Capital Transactions and Various Financial Assumptions

TABLE 5. Pro Forma Cashflow Budget

TABLE 6. Pro Fonna Balance Sheet

TABLE 7. Pro Fonna Income Statement

Tables 1,2 and 3 allow the user to "customize" the analysis to the individual's country and

farm. The user enters data in Tables 1,2 and 3 only. Input is optional in Table 3 on lines 14, but

required on lines 51-56. If you are using an Excel spreadsheet, then enter data in the GRAY cells

only. If you are using a Lotus spreadsheet then enter data in the cells that have the BLUE num-

bers only. All other cells contain formulas. Do not enter data in these cells or change the formu-

las because each formula is coupled to another entry and it may cause problems. The worksheets

are protected so that it is difficult for the user to change the formulas, but the worksheet can be

unprotected for formula changes. The best approach is to make a copy of this program before the

user starts making entries and set a copy aside in case an error occurs and the user must start

again. One of the first mistakes that most users make is to place data in the white or lighter cells

where the formulas are, and the result affects the remainder of the program. To print with most

computers, highlight the table, set print area, look at page set up and print preview and adjust the

size to fit the table on one page and print. Some of the tables are too large for one page causing

the printed table to be too small to read if printed on one page; therefore some tables will need to

be printed on several pages. User can move from one table to the other by clicking on the table

number at the bottom of the worksheet.

Explanation of the Tables

Table 1. Unit Costs, Production, and Financial Assumptions

The information in Table 1 is used to construct the remaining tables. Most unit costs are self-

explanatory. Specific costs vary with each user and with time. For example, a shrimp processor

contemplating putting in a shrimp farm would not have to pay as much to have the shrimp from

the farm processed; therefore, that individual's cost for shrimp processing might be less than one

without a processing plant. The same would be true for feed from a feed mill or larvae from a

hatchery; generally the two most expensive operating costs. If the group was fully integrated for

example, then theoretically they would be paying a lower rate for postlarvae (El), feed (E7), ice

(EIO) and processing (Ell).

The repair rate for storm damage (E26) is the average annual rate to charge per dollar worth of

buildings and pond construction damaged by a storm. This is necessary since the hypothetical

farm is located on the coast and is therefore subject to tropical storms and hurricane damage. The

area may not have a storm but every 10 years, then one must determine what will be the cost to

repair the damages on a percentage basis spread out and averaged over 10 years. Utilities (E27)

are those other than pumping water into the ponds and aeration of ponds. Pumping and aeration

are treated separately. Fuel (E3I) is for vehicles including tractors.

The user gives the model the cost of the land, size of the farm and size of the ponds in Table 2.

Then the total surface hectares and total hectares in the farm are calculated by the model using

the data provided by the user in Table 1 (E34; Ratio of surface ha. to total ha.). This formula

allows for dikes, roads, buildings, and then calculates the pond surface area of the farm.

The stocking density per hectare is supplied by the user (E36). Stocking density per pond and

per farm are then calculated by the model and appear in Table 3. A survival rate of 74 percent

(E37) is estimated and a stocking density of 400,000 per ha (E36) will yield 296,000 shrimp per

ha at harvest (Table 3, FI5-015). Assuming a 0.01 g animal is stocked (E39), the overall growth

rate is 0.86 g per week (E40), and the shrimp are in the pond for 20 weeks (E38), you will har-

vest 17.21 g shrimp (E41), which is calculated by the model (DO NOT MAKE ENTRY IN THIS

CELL). This will be 5,094 kg of shrimp (heads-on) per hectare per crop (Table 3, Columns F16-

016) which is 63,168 kg (heads-off), for the entire farm per year (Table 3, FI9-019). Once the

model determines production then fertilizer, feed, aeration, pumping, and ice are functions of kg

of shrimp produced. Important data entries are made by the user in E4-E40. Again, do not make

an entry in E41 [Harvest Size (g)].

Fertilizer information is entered in E46-E56. The data in E58, E59 and E60 are calcu-

lated by the program (DO NOT MAKE ENTRY INTO THESE CELLS). The fertilizer

amounts fqllow those recommended in Villalon (1991).

The Food Conversion Ratio (FCR) found in E6l is the number of pounds of feed required to

produce one pound of head-on shrimp or the number of kg of feed to produce one kg of shrimp.

The average FCR is 1.6: 1, but can be worse (4: 1 or higher) if feed, feed management, and natural

productivity are not optimum. We have recently heard of FCR values as good as 0.6: 1 in Peru

using feeding trays to offer the shrimp feed, with average FCRs of 0.9:1, but they were obtained

with a 50 percent anchovy meal diet or very expensive diet (Nicovita Feed).

The aeration ratio (E62) provided by the user is defined as KWHlkg of shrimp. This ratio can

be determined form the number of HP per acre used. For intensive purposes (depending upon the

stocking densities and pumping or water exchange levels planned) artificial aeration usually

ranges from one HPlha up to 10 HPlha and what would be considered super-intensive artificial

aeration of 12+ HPlha. would not be uncommon. The typical paddlewheel (Taiwanese) produces

1.60 SAE (kg02lkwh); aspirator/injector =1.58 SAE; Vertical pumps = 1.28 SAE; Pump sprayer

= 1.28 SAE; and Bottom Diffusers 0.97 SAE (kg02lkwh). For our model we have determined

that the ratio of aeration (KWHlkg shrimp) is 2.6.

E63 is pumping ratio, and for our example farm used in this model we have determined that

the ratio of pumping (KWHlkg shrimp) is 3.2. E64 is ice ratio, and a standard rule is 2 parts ice

to 1 part shrimp; therefore, we have placed the number 2 in the gray cell.

Financial information is provided by the user in E67 -E77. Most of these entries are straightfor-

ward and can be placed here, depending upon your specific circumstances or projections. Bor-

rowing as a percent of total investment capital needs (E69) is the percent of the money for capital

needs that will be borrowed. For example, the user may have enough money to pay for half of

the construction and equipment to put the farm in operation and plans to borrow the other half of

the capital that is needed. This cell does not include annual operating cost such as feed, labor,

etc. The inflation per year (E73), opportunity cost of capital (E74), and investor's risk factor

(E75) are used to calculate net present value (NPV) of the users investment found in Table 5 in

F57 and F59. The discount rate used in calculating NPV is calculated as E73+E74+E75. The

inflation rate should be the current inflation in the country where the aquaculture farm is being

built. The opportunity cost should be the rate of return the user would receive if the money were

invested in a secure investment such as bonds rather then the aquaculture farm. The risk factor is

the rate of return the user must have above the opportunity cost for investing in the aquaculture

farm rather then in the alternative secure investment. The intermediate factor in E78 is a factor

used by some banks (DO NOT MAKE ENTRY IN THIS CELL).

The average price received for the shrimp produced (in US$/kg) is entered in E81. In C86-C97

the user has the opportunity to predict the future price received for the shrimp. There is histori-

cally a cyclical movement of shrimp prices, usually going up for a few years, then down, etc. If

there is no cyclical factor or inflation wanted or foreseen then the user puts 1.0000 in C86-C97; a

drop in price would be a fraction below 1.0000 or an increase above the current would be 1.0000

+ whatever level above the current price received is expected. D86-D97 will show the adjusted

price of shrimp each year as a result of the numbers placed in C86-C97. E86-E97 shows the cost

of inflation in percent for the year and is directly affected by the inflation percent used in E73.

Dl00-D101 and E100-E101 allow the user to place specific tax information in the cells, as do

C105-E105, C106-E106 and C107-E107 (the dark cells).

TABLE 2. Construction and Equipment Needs

The capital investment list is a detailed listing of investment items on a year by year basis.

General categories are used such as land, pond construction, pond pumps, and major pond

equipment. Items within these general categories are listed separately. Individual items such as

tractors, gates, computers, feed silos, and nets are provided for purposes of informing your

banker or investors about depreciation (Economic Life), maintenance, extent of involvement, and

collateralization of assets. A miscellaneous cost is added to each general category because costs

are routinely underestimated, and this is called "contingency", and is usually 10 percent. Again,

do not make an entry into these cells because they are not in the shaded or designated areas to

make entries; however the percent can be changed if user knows how to change the formula.

Starting at the top of table 2, the first input is the cost of land. Place cost in US$/ha in E4 (1 ha = 2.47 ac). In G6-R6 the user places the number of ponds constructed each year and the average

surface hectares per pond in G7-R7. These two lines give you the option to build different num-

bers and different size ponds each year. E14 for example provides an entry for cost of earth

moving and the entry placed here in this model is US$ 0.90/cubic yard. A cubic meter is very

close to a cubic yard, so you could enter the same number here if you only know the cost per

cubic meter. A general rule of thumb is that it takes at least 2,500 cu. yards of dirt moving for

each acre of pond, but the smaller the pond the more dirt is moved because more dike area is

required in relation to pond bottom. Costs of products are supplied by user from lines 8-99,

ending with the entry for the cost of a pH meter, and with the number of meters planned over

time. The exception is the contingencies. These are calculated on a percentage of the total in each

column.

Usually, land, pond construction, pumps, and major pond equipment are the most significant

capital investment items. Table 2. (Continued) Value of Construction and Equipment Needs, does

not require input from user, but shows total construction costs, etc. Tables 2 (Continued) is the

same as Table 2, but the total costs have been calculated on the continuation. One can look back

at the first part of Table 2 and compare the numbers. Line 4 Land (ha.) in Table 2 corresponds to

Line 4 (Table 2 Continued)= $126,000. The total cost of construction and equipment can be seen

by year in line 102 of Table 2 (Continued). The example is set up with 36 hectares being pur-

chased and constructed in year 2 (H4) at a cost of $3,500 per hectare (E4). This yields a total cost

for land of $126,000 (U4). Additional hectares could be purchased in later years by entering the

number of hectares to be purchased each year in line 4 (I-R). An alternative to buying land as

needed is to purchase all the land up front. To do this you would enter a price of $0 in cell E4 but

you would continue to enter the hectares when they are needed in cells H4-R4. The total price of

the land can be entered in T4 (which is the only cell in the Table 2 (Continued) where an entry is

allowed to custom fit the user's needs. This way the amounts of hectares are bought into produc-

tion in the year they are needed and the total cost for the land is incurred in year 1 if needed to be

shown on the spread sheet that way.

TABLE 3. Farm Production, Inputs Used and Management

Most of Table 3 is produced from information in Tables 1 and 2. It shows how many shrimp

are produced, as well as inputs that are directly related to shrimp production, such as, stocking,

feed, etc. The user in this table makes no entries to the cells, except on line 14 (columns E-O)

and lines 51-56 (columns D-O). Line 14 is optional to the user to add an adjustment factor to

crop production, and can be either positive or negative. We chose not to make an entry and leave

the additional adjustment factor to crop production at 0.0 percent. Lines 51-56 allows the user to

determine different types of management that will be employed and in the year it will be em-

ployed. For example, the farm could start with a general manager in year 1 and hire a pond

manager in year 3. The user must enter number of managers by type each year. This allows the

user to hire special type management in early years and then get rid of them in later years when

they are not needed. The program should do all of the calculations otherwise, giving the numbers

broken down in various ways (number of shrimp harvested/crop; Kgs harvested/ha/crop, head-

on; Kgs/farm/yr.!crop, head-on; Kgs/farm/yr. (heads-on); Kgs/farm/yr. (heads off), and so forth.


The information in Table 4 is derived from previous tables (1-3) and shows the capital invest-

ment over time. It also shows the depreciation schedule, book value of capital equipment, sale of

used equipment and information related to shrimp prices and inflation. Straight-line depreciation

is used in this analysis and old equipment is sold for its book value. The cash flow (Table 5),

balance sheet (Table 6), and income statement (Table 7) use information contained in Table 4

directly or indirectly. Do not make any input into this table.

TABLE 5. Pro Forma Cashflow Budget

This financial statement, shown in Table 5, is intended to indicate the cash flows of the opera-

tion and its ability to meet cash obligations (operation receipts or incoming money and operation

costs or money going out to pay the bills). Each year of the planning horizon should be included

in the business plan. The cash budget should also indicate the amount and timing of cash flows to

and from investors and financial intermediaries. The program gives receipts and total cash

inflows. Operating Expenses are presented in detail by year and totaled as TOTAL CASH OUT-

FLOW (line 36). Some of the more important data are considered to be the Net Present Value

(NPV) and the Internal Rate of Return (IRR) or "bottom line" seen in lines 57-60. The NPV and

the IRR are projected 7 years ahead, then 12 years ahead. The IRR for the first 7 years is 46.8

percent (F58), which is a good return. The IRR over the 12-year period is 45 percent (F60).

Borrowing and loan payment information are given in the last part of this table. Further explana-

tion of each is follows:

Profit and Financial Return

Net present value (NPV) and internal rate of return (lRR) measure a firm's profitability (Table

5, F57-F60). The NPV of an investment is the sum of the present values for each year's divi-

dends to investors including ending equity, less the cost of the investment. The discount rate

which is used to calculate NPV, has three components: uncertainty (risk associated with investing

in a shrimp farm), alternative uses of capital (opportunity cost of capital), and inflation (Lee et al.

1988). Each individual has his own risk factor depending on his willingness to take a risk. The

individual risk factor or as listed on the table as "Investor's Risk Factor" is initially set at 20

percent (Table 1, E75), but the user can change it. If the NPV is equal to or greater than zero, the

firm is considered an economic success (i.e., profitable). If the NPV is less than zero, the firm is

not an economic success. In other words, the NPV of the project is a measure used to indicate

whether the project is earning some predetermined rate of return. The future cash flows of the

aquaculture business are converted into dollar values as if they had made some specific return

from the time the initial investment was made. These values are summed and the initial invest-

ment is deducted to derive the NPV of the project. If the project is positive, the user has earned at

least the rate of return you projected, if negative the user did not reach the projected rate of

return.

The IRR is the discount rate, which will make the NPV equal to zero. It is the rate of return to

the equity capital at which the investor would be indifferent to investing in the shrimp farm as

opposed to the next best alternative use for his equity capital. The user must compare the IRR

generated by the model with his required rate of return. The investor's required rate of return =

uncertainty + opportunity cost + inflation. If the IRR is greater than the user required rate of return the investment is an acceptable investment. Explained a different way, the rate of return or

profit expected on the project = IRR. If an investor has the money for the investment and does

not need to borrow it, the investor may prefer to keep the initial investment as small as possible

and borrow a portion for the investment. A small investment would generate a higher IRR (pro-

vided the IRR is greater then the interest rate of the loan) and shorter payback period (which is

the amount of time it takes to repay the initial investment from cash earned by the business).

TABLE 6. Pro Forma Balance Sheet

The purpose of the balance sheet in Table 6 is to show the financial position of the venture at

end of the year for each year in the planning horizon. The assets, liabilities, and net worth of the

venture appear on one sheet. Do not make entries in this table; the model should calculate all of

the information.

TABLE 7. Pro Forma Income Statement

Break-even analysis

Break-even analysis (Table 7) provides a good indication of the minimum levels the venture

must achieve to meet its obligations (pay its bills). There are two types of break-even analysis:

break-even production and break-even price. Break-even production is the level of production

that achieves zero profit when price and other factors are held constant. Break-even price is the

price that must be received to achieve zero profit when production and other factors are held

constant.

Sensitivity Analysis

An important ingredient in any financial analysis is to examine alternative scenarios. What if

survival is less than expected? What if the price of shrimp is less than expected? What if feed

cost more than expected? In building the initial financial plan, you should use in your best

estimate on all data. Because future events do not always turn out as expected, however, it is

advisable to look at some scenarios where the user has less than average or expected results. As

an example we used a survival rate of 74 percent in Table 1, E37. What if the survival rate turned

out to be only 40 percent? If you enter this survival rate instead of 74 percent the user will see

that it makes a big difference with the IRR; instead of 47 percent and 45 percent returns the

results are -4 percent and -1 percent IRR, which would not be a good return. If the user is unsure

of the actual survival rate (or any other critical value) that is likely to be achieved, then the user

should proceed with great caution.

As a general rule of thumb in shrimp farming, one should put everything they can possibly

think of on paper that will cost money (as we have tried to do in this model) and then double it.

Then they should count on losing at least one full crop during the life of the shrimp farm (maybe

more). By doing these two things the IRR will come closer to being realistic. The 47 percent IRR

after 7 years and 45 percent IRR after 12 years are as accurate as one can make them without

being able to see every event in the future. No one can predict a crop loss from storm damage or

disease accurately. They are as accurate as possible because they have not factored in the un-

known (the hurricane or 100 year storm that demolishes the farm or the virus that kills the crop).

It takes most shrimp culture enthusiasts some time to realize that shrimp aquaculture is just

another type of farming, and shrimp culture operations face many of the same problems that

other farmers face (weather, diseases, birds and other predators, etc). Shrimp farming is farming,

and is considered a high-risk venture. For additional literature on shrimp farming contact Texas

A&M University Sea Grant, and for additional information on hatchery spread sheets or financial

analyses for a hatchery, consult Treece and Fox (1993), which can be ordered from the Texas Sea

Grant web site at http://texas-sea-granttamu.edu/.

References

Hanson, 1. S., W. L. Griffin, D. A. Klinefelter, and D. U. Fisher. 1991. Developing an Aquacul-

ture Business Proposal. Faculty Paper Series. Department of Agricultural Economics, Texas

A&M University, College Station, Texas 77843-2124.

Lee, W.P., M.D. Boehlje, A.G. Nelson, and W. G. Murray. 1988. Agricultural finance. Iowa

State University Press, Ames, Iowa.

Treece, G.D. and 1.M. Fox. 1993. Design, Operation and Training Manual for an Intensive

Culture Shrimp Hatchery, with emphasis on Penaeus monodon and Penaeus vannamei.

Texas A&M University Sea Grant College Program Publication TAMU-SG-93-505. 187

pages.

Villalon, l.R. 1991. Practical Manual For the Semi-intensive Culture of Marine Shrimp.

Texas A&M University Sea Grant College Program, Publication TAMU-SG-91-501. 104

pages.

TABLE 1. Unit Cost, Produetlon, and Flnanelal Assumptions

Unit Costs

Postiarvaa ($/1000)

Fartilizar. Uraa ($/kg)

Fartillzar. Tripla Phosphata ($/kg)

Faad ($/kg) (bulk rata)

Pumping Utilities ($IKWH)

Aaraflon Utilities ($/KWH)

Ica ($/kg)

Processing ($/kg)

Packing & Grading ($/kg)

Full Time labor ($Iperson)

Numbar Ponds par Full Time labors

Typa 1 Management Salaries ($Iperson)

Typa 2 Managament Salaries ($Iparson)

Typa 3 Managamant Salaries ($Iperson) Typa 4 Managemant Salarias ($Iperson)

Type 5 Management Salaries ($Iperson)

Typa 6 Management Salarlas ($Iperson) Accountant Fees ($Iyaar)

legal Fees ($/year)

Insurance Pramlum ($/year) Repair Rale ($1$ of Buildings)

Rapalr Rata ($1$ of Mach. Equip. Ponds) Rapalrs Rata Storm Damaga

Utllnles: Rale per Square Fool of all Buildings ($/year) Supplies: Rale par Square Fool of all Buildings ($/yaar)

Property Tax Rata (per $) Price Per Gallon of Fual (gasoline)

Average Gallons Fual UsadIVahlcleNear

Ratio of surfaca ha 10 total ha

Production Assum tlons

Stocking Denslly (1000tha) Survival Rata

Weaks Shrimp in Pond/crop Siza Stocked (g)

Growth Rate/waek (g) Harvesl Siza (g)

Number of crops per year

Convarsion: headon to haadoff

FERTIUZER Inllial Application (kgtha)

Urea Triple Phosphate

While Pond is filling (kg/ha)

Urea

Triple Phosphate

Final filling of the pond (kg/ha)

Urea Triple Phosphate

Maintenance lavel (kg/ha)

Urea

Triple Phosphate

TOTAL

Urea

Triple Phosphata

Kgs Fert.tha (From Above)

Food Conversion Ratio

Aeration Ratio (KWH/kg shrimp)

Pumping Ratio (KWHlkg shrimp) Ice Ratio (kgs ice/kg shrim

Flnanelal Assumptions

t82.00

Financial Assumptions

Interest Rates Short Term Intermediate Term

Borrowing as % of Total Investment Capital Needs Average Number Months for Operating Loan Length of Intermediate Loan (Years) Minimum Cash Reserve at End of Year Inflation per Year Opportunity Cost of Capital Investor's Risk Factor Property Tax Rate Insurance Premium Intermediate Factor

Year 1 2 3

4 5

6

7

8

9

10

11

12

Tax Information

Self Tax Social Security Medicare

Income Tax

Cyclical Factor to

adjust Shrimp Prices

3.8897

Adjusted Costs Price Inflation

of Shrimp (relative to Received the

9.29 0.0% 8.39 0.0%

10.79 0.0% 9.29 0.0% 8.39 0.0%

10.79 0.0% 9.29 0.0%

8.39 0.0%

10.79 0.0%

9.29 0.0%

8.39 0.0%

10.79 0.0%

TABLE 2. Construction and Equipment Needs

LAND (ha)

POND CONSTRUCTION

Number of ponds constructed

Average Surtace Hectares/Pond

Concrete Inflow

Concrete Outflow

Concrete Box

Water Gale Valve

Pipe

Eletrical

Earth Moving

Drainage Culvert

Survey (to Permit)

Engineering Design Contingency

SUBTOTAL

POND PUMPS

Pump/Motor/3,050 gpm

Pipes(per ft.)

Pump Station

Contingency

SUBTOTAL

MAJOR POND EQUIPMENT

Paddle Wheels

Harvest Machine Tractor/42HP/4Wheel Dr.

Truckl1 Ton Feed BoaVMotor/Blower

Feed Wagon/Augar

Fuel Tank

Truck/Half-Ton

Light Vehicle/Honda Contingency

EGO. Quantity Quantity Ouantity LIFE Yaar 1 Year 2 Year 3

o 36

11,269

6,336

6,220

o

Quantity

Year 4

o

Quantity Year 5

o

Quantity Year 6

o

Quantity Year 7

o

Quantity Year 6

o

Quantity Year 9

o

Quantity Year 10

o

Quantity Yaar 11

o

Quantity Year 12

o

IMPLEMENTS 0..0 Orag Silo BoaVMotor

Mower Contingency B43

SUBTOTAL PONe EQUIPMENT

WaaeSaater Lawn mower Cast Nats

Wad",.. SHc:hiOiscs Fin,r and Boards

Contilgancy BS SUBTOTAL SHOP EQUIPMENT

Vica Air Compressor

Bantry Charger Jack 12 Ion

Whe.lbarrow Hand Toots Genaral Supplies

Generator (Small) Hand Orill 318 Drill 112 Clmd.rSaw ladder ConUngancy 317

SUBTOTAL OffiCE

O.M&Ch.it Blackboard

Booklhelves Filing Cabinet IBM Computer System Typewriter

Tal.phona SUd. Projector XerollC Machine

C.lc:ulator Prinle, Contingency 516

SUBTOTAL BUILDINGS

Ollie. l.q. 11.) Shop la . It) F a Shod Is. II) Con~.ncy 2,4g0

SUBTOTAL MISCELLANEOUS EQUIPMENT

02 Mata,. R.fr.clamstar Tnpl. Beam Balance Microscope. Hemacylomatar MiscaPanaous AIr CondlUonaf Relrlgerator PH Mata, Contingency 572

SUBTOTAL

TABLE 2. IConUnuedJ VDlue 0' Con.truc:Uon and Esulpmenl Nuda Vaw V..... YUle Vail. Value Vau. Value Vaart V..,2! Vaar3 V ., 4 Via'S V rB V ., 7

c:tiliI 12.,000 0

5,000

20,000 11,000 3,000 ",0011

5",077 3,BOD 7,000 5,000

11,2B9 12395'(

33,000 20,355 10,000 8,338

al1l91

15,000 1B,OOO 11,000 13,100

2,000 15,300 D

2,400 .,220

, 300 SI ,(20

3,000 1,200

'(,225 043

I 288

250 300 100

3D 2DD

aD

.00 50

'00 00

1,000 SOD

0 120 350 150 50 0

317 0 3 ~I7

250

300 300

2,DOD SOD SOD

0 SOD

75 750 51.

5 al3

11,700 9,200 ",ODD 2.490

27 390

1,100 SOD

00 .00

70

2'. 2.000

300 SOD 572

6,288

8,300 441.157

Value Valu. Value V.,e Vear I!I Vaa,9 V ., 10 Vaal 11

o D

Value Vear 12

D

TABLE 3, Farm Production. In ub: Uaed and Mana nl

Farm Production Year 1 Year 2 Vear3 Yaar4 Year 5 Year 6 Vear7 YearS Year 9 Year 10 Year 11 Year 12 Surface Hectares Added this year 20 0 0 0 0 0 0 0 Total Surface Hectares in production 0 20 20 20 20 20 20 20 20 20 20 Ponds Added this year 0 10 0 0 0 0 0 0 0 0 0 Total Ponds In production 0 10 10 10 10 10 10 10 10 10 10 Average Surface Halpond 0 2 Stocking Stocking Density (1 DOOlha) 0 400 400 400 400 400 400 400 400 400 400 Average Stocking/Pond/Crop 0 800 800 800 800 800 800 800 800 800 800 Total stocking for Farm/Crop 0 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Total stocking (or Farm 0 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Harvesting Adjustment Factor to Crop Production ~ . ~. ' , - .~; ' ., ' ",# r' ,-Number Harvested/halcrop 0 296,000 296,000 296,000 296,000 296,000 296,000 296,000 296,000 296,000 296,000 Kg. Harvo,tadlha/crop (head-on) 0 5,094 5,094 5,094 5,094 5,094 5,094 5,094 5,094 5,094 5,094 Kgs/Farm/year/crop (head-on) 0 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 Kgs/Farm/year (head-on) 0 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 101,883 KQ,/Farm/vear (head-off) 0 63,168 63,168 63,168 63,168 63,168 63,166 63,166 63,168 63,168 63,168

Fertilizer: Urea

Kgs Fert.lha/Crop 0 182 182 182 182 182 182 182 182 182 182

Kg, FertJPond/Crop 0 364 364 364 364 364 364 364 364 364 364

Kg' Fert./Farm/Crop 0 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640

Kgs Fert./Farm 0 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640 3,640

FertiliZer: Trlpf. Pho.phal. I Kgs Fert./haiCrop 0 19 19 19 19 19 19 19 19 19 19

Kgs FertJPond/Crop 0 37 37 37 37 37 37 37 37 37 37

Kg. FertJFarm/Crop 0 372 372 372 372 372 372 372 372 372 372

Kgs FertJFarm 0 372 372 372 372 372 372 372 372 372 372

Feed Kgs FeadihaiCrop 0 8,151 8,151 8,151 8,151 8,151 8,151 8,151 8,151 8,151 8,151

Kg' Feed/Pond/Crop 0 16,301 16,301 18,301 16,301 16,301 16,301 16,301 16,301 16,301 18,301 Kgs Feod/Farm/Crop 0 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 Kgs Feed/Farm a 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 163,013 Aeration KWH/halcrop a 13,245 13,245 13,245 13,245 13,245 13,245 13,245 13,245 13,245 13,245 KWH/Pond/Crop 0 26,490 26,490 26,490 26,490 26,490 26,490 26,490 26,490 26,490 26,490 KWH/Farm/Crop 0 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 KWH/Farm 0 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 264,896 Pumping A.sumptions

KWH/ha/Crop 0 16,301 16,301 16,301 16,301 16,301 16,301 16,301 16,301 16,301 16,301 KWH/Pond/Crop 0 32,603 32,603 32,603 32,603 32,603 32,603 32,603 32,603 32,603 32,603 KWH/Farm/Crop 0 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 KWH/Farm 0 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 326,026 Ice Assumptions

Ice/ha/Crop 0 10,188 10,188 10,188 10,188 10,188 10,188 10,188 10,188 10,188 10,188 Ice/Pond/Crop 0 20,377 20,377 20,377 20,377 20,377 20,377 20,377 20,377 20,377 20,377 Ice/Farm/Crop 0 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 Ico/Farm 0 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 203,766 Number or Managers by Type Type 1 Type 2 Type 3 Type 4 Type 5 T 8 6


Capital Item Eco. Life Year 1 Year 2

land 0 126,000 Pond Construction

Buildings Machinery & Equipment

Machinery & Equipment Machinery & Equipment

Machinery & Equipment




TOTAL CAPITAL

Depreciation Schedule

Pond Cons. (15)

Buildings (20)

Mach. & Equip. (12)

Mach. & Equip. (10) Mach. & Equip. (7)

Mach. & Equip. (6) Mach. & Equip. (5) Mach. & Equip. (4) Mach. & Equip. (3)

TOTAL DEPRECIATION

15 20 12

10 7

6

5

4

3

Salvage Rate

0.00

0.00

0.10

0.10 0.10

0.10 0.10 0.10 0.10

o o o o o o o

8,300

o 8,300

o Book Value of Capital before sale of old equipment

Land 0 Pond Cons. (15)

Buildin9s (20) Mach. & Equip. (12) Mach. & Equip. (10)


Mach. & Equip. (5) Mach. & Equip. (4) 8,300 Mach. & Equip. (3)

TOTAL MARKET VALUE 8,300

Sale of Used Equipment


Mach. & Equip. (5)

Mach. & Equip. (4)

Mach. & Equip. (3) TOTAL EQUIPMENT SOLD

Year 1

123,954 27,390

850 88,951

12,324

20,500

30,614

o 10,575

441,157

o o o o o o o

1,868

o 1,868

126,000

123,954 27,390

850 88,951 12,324

20,500 30,614

6,433 10,575

447,590

Year 2

Year 3

o o o o o o o o o o o

8,264

1,370

64 8,006 1,584 3,075 5,511 1,868 3,173

32,912

126,000

115,690 26,021

786 80,945

10,739 17,425 25,104

4,565 7,403

414,677

Year 3

Year 4


8,264 1,370

64 8,006 1,584

3,075 5,511 1,868 3,173

32,912

126,000

107,427 24,651

723 72,939

9,155 14,350 19,593

2,698 4,230

381,765

Year 4

Year 5

o o o o o o o o

8,300

10,575 18,875

Depreciation

8,264

1,370

64 8,006 1,584

3,075 5,511 1,868 3,173

32,912

Book Value

126,000

99,163 23,282

659 64,934

7,570 11,275 14,082

9,130 11,633

367,727

Year 5

830

o 830

Year 6


8,264

1,370

64

8,006 1,584 3,075 5,511 1,868

3,173

32,912

126,000

90,900 21,912

595 56,928

5,986

8,200 8,572 7,263 8,460

334,815

Year 6

3,061

o 1,058 4,119

Year 7

o o o o o o o

30,614

o o

30,614

8,264

1,370

64 8,006 1,584

3,075 5,511 1,868 3,173

32,912

126,000

82,636 20,543

531 48,923

4,401 5,125

33,676

5,395 5,288

332,517

Year 7

2,050

o o o

2,050

Year 8

o o o o o o

20,500

o o

10,575 31,075

8,264

1,370

64

8,006 1,584 3,075 5,511 1,868 3,173

32,912

126,000

74,372 19,173

468 40,917

2,817 22,550 28,165

3,528 12,690

330,679

Year 8

1,232

o o o o

1,232

Year 9 Year 10

o 0 o 0 o 0 o 0 o 0

12,324

o o

8,300

o 20,624

8,264 1,370

64 8,006 1,584

3,075 5,511 1,868 3,173

32.912

126,000

66,109 17,804

404 32,912

13,556 19,475

22,654 9,960 9,518

318,390

o o o o o o

8,264

1,370

64 8,006 1,584 3,075 5,511 1,868 3,173

32,912

126,000

57,845 16,434

340 24,906

11,971 16,400 17,144

8,093 6,345

285,478

Year 9 Year 10

o 0 o 0 o 0

830 0 1,058

1,888 o o

Year 11 Year 12

o 0 o 0 o 0 o 0 o 88,951 o o o o

10,575 10,575

8,264

1,370

64 8,006 1,584

3,075 5,511 1,868 3,173

32.912

126,000

49,582 15,065

276 16,901

10,387 13,325 11,633

6,225 13,748

263,141

Year 11

o o

3,061

o o

3,061

o o

30,614

o o

119,565

8,264 1,370

64 8,006 1,584 3,075 5,511 1,868 3,173

32,912

126,000

41,318 13,695

213 97,846

8,803 10,250 36,737

4,358 10,575

349,793

Year 12

o o o o

1,058

1,058

TABLE 5. Pro Forma Cashllow Budget for Hypothetical Shrimp Farm Inc.

Item Year 1 Year 2

BEGINNING CASH BALANCE a 30,000 Receipts:

Shrimp Sale of capital

TOTAL CASH INFLOW

Operating Expenses:

Postlarvaa

Fertilizer

40% Protein Feed

Pumping

Aeration

Ice

Processing

Pack & Grading

Full Time Labor

Management Salaries

Accountant Fees

Legal Fees

Insurance Premium

Repair of Buildings. Repair Mach, Equip, Ponds

Repairs Storm Damage

Ulilities

Supplies Property Tax

Fuel

Contingency

Total Operating Expenses

Capital Invest & Replace Schedule of Debt Payments

Intermediate Principal

Intermediate interest

Income & Self-employ Taxes

TOTAL CASH OUTFLOW

AVAILABLE CASH

Investors Paid in Capital

New Borrowing

Short Term:

Capital Equipment

Operating Capital Intermediate (end of yr)

Payment on Short Term Note

Proneipai

interest

Total Short Term Payment

Dividends to Investors

ENDING CASH BALANCE

o o o

a a a a a a a a a

15,000

1,500

1,000

o o o o o a o

500

1,800

19.800

8,300

o o

30,000

o o a o o o o o

15,000

30,000

1,500

1,000

750

o 332

o 1,400

1,960

277

3,000

5,522

60.741

441,157

o 0 o 0 o 0

28.100 501.898 -28.100 -471,898

58 ,694 274,794

a 19,800

o

19,800

594

20,394

a 30,000

250,579

30,741 250,579

281,320

23,474

304,794

a 30,000

Year 3

30,000

681.578 o

711,578

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1.096 11,843

757 1,400

1,960

268 3,000

32,731

360,036

o

41,870

22,552

82.823

507.282 204,297

o

o 330,036

o

330,036

9.901

339,937

164.395

30.000

Year 4

30,000

586,895

o 616,895

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757 1,400

1,960

258 3,000

32,730

360.028

a

45,638

18,784 54,643

479.091 137,804

o

a 330,026

o

330,026

9,901

339,927

97,904 30,000

Year 5

30,000

530,225

830

561,055

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096 11,843

757

1,400

1.960 248

3,000

32,729

360,015

18,875

49.745 14,676

38,127

481,439 79,616

o

o 330,015

o

330,015

9,900

339,916

39,716

30,000

Year 6

30,000

681,578 4,119

715,697

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757 1,400

1,960

239

3,000

32,728

360,005

o

54,223

10,199

87,940

512.366 203,331

o

o 330,005

o

330,005

9,900

339,905

163.431 30,000

Ya817

30,000

586,895 2 ,050

618,945

72,000

321

114,109

22,822

18,543

10,188

o a

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757

1,400

1,960

229

3,000

32.727

359.994

30,614

59,103

5,319

59.463 514.493 104.452

a

a 329,994

o

329,994

9,900

339,894

64,553

30,000

Yaar8

30,000

530,225 1,232

561.457

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757

1,400

1,960

220

3,000

32,726

359.983

31,075

o a

43.249 434.308

127.149

o

o 329,983

o

329,983

9,900

339,883

87,250 30,000

Yaar9

30,000

681,578 1,888

713,466

72,000

321

114,109

22,822

18,543

10,188

o a

15,000

50,000

1,500

1,000

1,500

1,096 11,843

757 1,400

1,960

210

3,000

32,725

359,973

20,624

o o

90,420 471.016

o

o 329,973

o

329,973

9,899

339,872

202.550

30.000

Year 10

30,000

566,895 o

616.895

72,000

321

114,109

22,822

18,543

10,188

o a

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757

1.400

1,960

200

3,000

32,724

359,962

a

o o

60.487 420.449

196.447

a

o 329,962

o

329,962

9,899

339,861

156.548 30,000

Year 11

30,000

530,225 3,061

563,286

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757

1,400

1,960

191

3,000

32,723

359,952

10,575

o o

43,871 414.398

148,888

a

o 329,952

o

329,952

9,899

339,850

108,990

30,000

Year 12

30.000

681,578

1,058 712,636

72,000

321

114,109

22,822

18,543

10,188

o o

15,000

50,000

1,500

1,000

1,500

1,096

11,843

757

1,400

1,960

181

3,000

32,722

359,941

119,565

o a

90,173 569,678

142,957

o

o 329,941

o

329,941

9,898

339,839

103.059

30,000

TOTAL INTERMEDIATE LOAN PAYMENT ANALYSIS

Balance at beginning of year 0 0 250,579 208,709 163,071 113,325 59,103 0 0 0 0 0 Interest Accrued 0 0 22,552 18,784 14,676 10,199 5,319 0 0 0 0 0

Total Balance Before Payment 0 0 273,131 227,493 177,747 123,524 64,422 0 0 0 0 0

Payment 0 0 64,422 64,422 64,422 64,422 64,422 0 0 0 0 0

Remaining Balance 0 0 208,709 163,071 113,325 59,103 0 0 0 0 0 0

Princiele 0 0 41,870 45,638 49,745 54,223 59,103 0 0 0 0 0

Net Present Value (7 Years) 114,050

Internal Rate of Retum (7 Years) 46.84%

Net Present Value (12 Years) 141,003

Internal Rate of Retum (12 Years) 45.08%

Initial Investment (7 Years) -267,609 164,395 97,904 39,716 163,431 427,069

InHial Investment (12 Years) -267 ,609 164,395 97,904 39,716 163,431 64,553 87,250 202,550 156,548 108,990 482,852

Net income before short term -19,800 -62,609 266,077 175,173 123,451 282,581 190,720 138,561 290,581 194,021 140,422 289,782

Estimated social security tax 0 0 6,882 6,882 6,882 6,882 6,882 6,882 6,882 6,882 6,882 6,882

Estimated Medicare tax 0 0 3,776 3,776 3,580 3,776 3,776 3,776 3,776 3,776 3,776 3,776

Estimated income tax 0 0 75,235 47,055 31,021 80,351 51,874 35,705 82,831 52,897 36,282 82,584

Estimated total taxes 0 0 85,893 57,713 41,483 91,009 62,532 46,363 93,469 63,555 46,940 93,241

Estimated cash available before borrowing -411,157 625,685 559,183 500,697 624,686 525,799 464,019 599,353 553,340 505,771 499,630

Pre Ending Cash Balance -28,694 -244,794 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000

SHORT TERM BORROWING: Capital Equipment 0 250,579 0 0 0 0 0 0 0 0 0 0

Operating Capital 19,800 30,741 330,036 330,026 330,015 330,005 329,994 329,983 329,973 329,962 329,952 329,941

594 23,474 9,901 9,901 9,900 9,900 9,900 9,900 9,899 9,899 9,899 9,898

TABLE 6. Pro Forma Balance Sheet for Hypothetical Shrimp Farm Inc.

Item Year 1 Year 2 Year 3

CUARENT" ASSETS Cash on Hand

INTERMEDIATE ASSETS Mach. & Equip. (7)

Mach. & Equip. (6)

Mach. & Equip. (5)

Mach. & Equip. (4)

Mach. & Equip. (3)

TOTAL INTERMEDIATE ASSETS

LONG TERM ASSETS

Land

Pond Cons. (15)

Buildings (20)

Mach. & Equip. (12)

Mach. & Equip. (10)

TOTAL LONG TERM ASSETS

TOTAL ASSETS

CURRENT" UABlUTlES

Current Portion Intermediate

TOTAL CURRENT LIABILITIES

INTERMEDIATE LlABLITIES

TOTAL LIABILITIES

NET WORTH

TOTAL LIABILITIES & NET WORTH

CHANGE IN NET WORTH

Curran1 Ra1io Debt/Equity (Leverage) Ratio

Net Capital Ratio Debt/Asset Ratio

30,000

o o o

8,300

o 8,300

o o o o o o

38.300

o

o

o

38,300

38,300

38,300

30,000

12,324

20,500

30,614

6,433

10,575

80,445

126 ,000

123,954

27,390

850

88,951

367,144

477,590

41,870

208,709

250,579

227,011

477,590

188,711

0.72

1.10

1.91 0.52

30,000

10,739

17,425

25,104

4,565

7 ,403

65,235

126,000

115,690

26,021

786

80,945

349,442

444,677

45,638

163,071

208,709

235,968

444,677

8,957

0.66

0 .88

2 .13 0 .47

Year 4

30,000

9,155

14,350

19,593

2,698

4,230

50,025

126,000

107,427

24,651

723

72,939

331,740

411,765

49,745

113,325

163,071

248,694

411,765

12,726

0.60

0.66

2 .53 0.40

Year 5

30,000

7,570

11,275

14,082

9,130

11,633

53,690

126,000

99,163

23 ,282

659

64,934

314,037

397,727

54,223

59,103

113,325

284,402

397,727

35,708

0.55

0.40

3 .51 0 .28

Year 6

30,000

5,986

8,200

8,572

7,263

8,460

38,480

126,000

90,900

21,912

595

56,928

296,335

364,815

59,103

o

59,103

305,712

364,815

21,310

0 ,51

0.19

6.17 0.16

Year 7

30,000

4,401

5,125 33,676

5,395

5,288

53,884

126,000

82,636

20,543

531 48,923

278,632

362,517

o

o

o

362,517

362,517

56,804

0.00

0.00

0 .00 0 .00

Year 8

30,000

2,817

22,550

28,165

3,528

12,690

69,749

126 ,000

74,372

19,173

468

40,917

260,930

360,679

o

o

o

360,679

360,679

-1,837

0 .00

0.00

0.00 0.00

Year 9

30,000

13,556

19,475 22,654

9,960

9,518

75,163

126,000

66,109

17,804

404

32,912

243,228

348 ,390

o

o

o

348,390

348,390

-12,289

0.00

0.00

0.00

0 .00

Year 10

30,000

11,971

16,400 17,144

8,093

6 ,345

59,953

126,000

57,845

16,434

340

24,906

225,525

315,478

o

o

o

315,478

315,478

-32 ,912

0.00

0 .00

0.00

0.00

Year 11

30,000

10,387

13 ,325 11,633

6,225

13,748

55,318

126,000

49,582

15,065

276

16,901

207 ,823

293,141

o

o

o

293,141

293,141

-22,337

0.00

0.00

0.00

0 .00

Year 12

30,000

8,803

10,250 36,737

4,358

10,575

70,722

126,000

41,318

13,695

213 97,846

279,071

379,793

o

o

o

379,793

379,793

86,652

0.00

0.00

0 .00

0.00

A 81 C 0 E F G H I J K L M N 0 1 TABLE 7. Pro Forma Income Statement for Hypothetical Shrimp Farm Inc.

2 litem Year 1 Year 2 Year 3 Year 4 YearS Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12

3 Income: 4 Shrimp 0 0 681,578 586,895 530,225 681,578 586895 530,225 681,578 586,895 530,225 681,578

5 Sale of Capital Eguipment 0 0 0 0 830 4,119 2,050 1,232 1,888 0 3,061 1,058

6 Total Income 0 0 681,578 586,895 531,055 685,697 588,945 531,457 683,466 586,895 533,286 682,636

7 1 8 Cash Expense:

9 Operating 19,800 60,741 360,036 360,026 360,015 360,005 359,994 359,983 359,973 359,962 359,952 359,941 10 Interest 594 23,474 32,453 28,685 24,577 20,099 15,219 9,900 9899 9,899 9,899 9,898

1 1 Total Cash Expense 20,394 84,216 392,489 388,710 384592 380,104 375 213 369,883 369,872 369,861 369,850 369,839

12 I 13 Net Cash Income I -20,394 -84,216 289,089 198,185 146,463 305,593 213,732 161,574 313,594 217,034 163,436 312,797

14 I 15 NonCash Adjustments

16 Depreciation 0 1,868 32,912 32,912 32,912 32,912 32,912 32,912 32,912 32,912 32,912 32,912

17 Book Value - Capital assets 0 0 0 0 0 0 0 0 0 0 0 0

18 Total NonCash Adiustments 0 1 868 32912 32,912 32912 32,912 32,912 32,912 32,912 32,912 32,912 32,912

19 I 20 Net Farm Income Before Tax -20,394 -86,083 256.176 165,273 113,550 272,681 180820 128,662 280,681 184,122 130,524 279,884

21 Taxes I 22 Social Security 0 0 6,882 6,882 6,882 6,882 6882 6882 6882 6882 6,882 6882

23 Medicare 0 0 3.776 3,776 3,293 3,778 3,776 3,731 3,776 3,776 3,776 3776

24 Income Tax 0 0 72,166 43,985 27,952 77,282 48,805 32,636 79,762 49,829 33,213 79,515

25 Total taxes 0 0 82823 54,643 36,127 67.940 59463 43,249 90,420 60,487 43,871 90.173

26 I 27 Net Income Above Taxes -20,394 -86,083 173,353 110,629 75,424 184,741 121,357 85,412 190,261 123,635 86,653 189,711

28 Breakeven Production (kg. heads-oHI

29 To Cover Cash Costs 36,375 41,837 45,818 35,227 40,384 44,065 34,279 39,808 44,062 34,276

30 To Cover All Costs Before Taxes 39,426 45,379 49,739 38,278 43,927 47,9B6 37,329 43,351 47,983 37,326

31 To Cover All Cost Including Taxes 47,102 51,261 54,281 46,428 50,327 53,139 45,709 49 B61 53,209 45,683

32 Breakeven Price ($/kg)

33 To Cover Cash Costs 6.21 6.15 6.09 6.02 5.94 5.B6 5.86 5.86 5.86 5.85

34 To Cover All Costs Before Taxes 6.73 6.67 6.61 6.54 6.46 6.38 6.38 6.38 6.38 6.38 35 To Cover All Cost Including Taxes 8.05 7.54 7.21 7.93 7.40 7.06 7.81 7.33 7.07 7.80

Abstract A GUIDE TO TI-IE FINANCIAL ANALYSIS OF SHRIMP FARMING

(Spread Sheet For Micro Computers) Griffin and Treece, 1999

This program was re-written by Wade L. Griffin, Professor, Department of Agricultural Economics, Texas A&M University and Granvil D. Treece, Aquaculture Specialist, Texas A&M University, Sea Grant College Program in 1999. In starting a shrimp culture business, one of the first steps is to develop a business plan. The business' plan should contain a statement about the business and a financial plan. Once the basic business plan has been developed, it is necessary to demonstrate the economic feasibility over the planning horizon of the venture. This type of analysis is required by banks or investors for determining the financial success of the venture. The purpose for this program is to assist the user in conducting an economic feasibility analysis of a shrimp farm. To achieve this objective a financial analysis is conducted for a hypothetical intensive shrimp farm on the Texas coast. The hard copy of the analysis accompanying the diskette shows the results of the analysis and a "read me" file explains how to use the model and how to customize it to suite the users' needs. The model includes seven (7) tables: 1) Unit Cost, Production, and Financial Assumptions; 2) Construction and Equipment Needs; 3) Fann Production, Inputs Used and Management; 4) Capital Transactions and Various Financial Assumptions; 5) Pro Forma Cashflow Budget (Profit and Financial Return); 6) Pro Forma Balance Sheet; and 7) Pro Forma Income Statement (break-even analysis, sensitivity analysis). This financial model for a shrimp farm is developed in a fully integrated spreadsheet. For example, if you want to change your stocking density, the model will automatically make all the changes to your cash flow, balance sheet, income statement, and rate of return. The Shrimp Farming Financial Analysis/Spread Sheet for micro computers is available on three and one half inch diskette only for either Macintosh (Excel 5.0 or higher) or mM/PC (Excel 5.0/95 or higher). When ordering please specify which. US$25.00 includes a hard copy of program, a "read me" file, and one diskette and shipping.

Documents

A Guide to the Financial Analysis of Shrimp Farming