BVG MATH - all math for the case study BVG PDF

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Summary

Business 2257 BVG case study and analysis. Group case study for 2020-2021. Includes all necessary implications...

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BIG VIKING GAMES PROJECTED INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31st, 2016 REVENUE ASSUMPTIONS Gaming Revenue Growth of 20% $18,857,143 OIDMTC Refund 40% of game development salary $2,324,000 TOTAL REVENUE $21,181,143 OPERATING EXPENSES Depreciation Rent - London Rent – Toronto Interest & Principal payments Administrative Expenses Benefits Facebook fees Internet Marketing Expenses Professional services Recruiting Salary – Admin and Mgmt Salary – Game Development Server Fees Telephones Viking Culture Equipment for new employee Turnover

Same $ + $7000 Same $ Same $ Same $

$330,665 $200,000 $50,000 $1,000,000

Same % Same $ + 20 emp x 70k salary x 15% 30 % of game revenue Same $ Same % Same % Same $ + 20 emp x 70k salary x 10% Same $ + 6 x $70,000 Same $ + 14 x $70,000 Same % Same $ Same % 20 x $3600

$18,857 $1,239,000

10% of employees in 2015 (10) + Benefits and salary

TOTAL OPERATING EXPENSES OPERATING INCOME TAX NET INCOME AFTER TAX

$5,657,143 $12,500 $320,571 $339,429 $420,000 $2,450,000 $5,810,000 $188,571 $12,500 $188,857 $72,000 ($1,295,000) $ 18,309,808

22 % OF NIBT

$2,871,335 $631,694 $2,239,641

NEW GAME DEVELOPMENT PROJECTED NET BENFIT AND PAYBACK

INCREMENTAL BENEFIT New game revenue OIDMTC Refund

TOTAL INCREMENTAL BENEFIT INCRIMENTAL COST Marketing Employees Salary Benefits Total Incremental Cost

ASSUMPTIONS ARPDAU $0.12 x 100,000 users x 365 days 40% of 70% of employee salaries (game development salaries)

PAYBACK

$588,000

$4,968,000

Given 30 x 70,000 15% of salary

NET BENEFIT INVESTMENTS Server Infrastructure Concept development Office Cost TOTAL INVESTMENT

$4,380,000

$100,000 $2,100,000 $315,000 $2,515,000 $2,453,000

Given Given Given

$250,000 $500,000 $3,500,000 $4,250,000

INVESTMENT / NET BENEFIT

1.732 YEARS

BREAKEVEN FOR MARKETING CAMPAIGN FIXED COSTS

ASSUMPTION

Marketing budget

Given

$100,000

Facebook Fees

30% of game revenue

$4,714,286

Total fixed costs Unit Contribution (ARPDAU) BREAKEVEN

$4,814,286 100,000 + 20% increase in users x 0.06 x 365 days Fixed Costs / Unit Contribution

$2,628,000 1.832 Years

VALUATION NET BOOK VALUE ITEMS

ASSUMPTIONS

Assets

Balance sheet (2015)

$6,445713

Liabilities

Balance sheet (2015)

$5,051,023

NET BOOK VALUE

ASSETS – LIABILITIES

$1,394,690

CAPITALIZATION OF EARNINGS ITEM

ASSUMPTIONS

GROWTH FACTOR

Industry analysis / Previous income statements / projected income statements CAN and WANT analysis

RISK FACTOR OVERALL PE MULTIPLE

VALUE

15

10 11

Net Income After Tax * PE Multiple

$24,636,051

ECONOMIC APPRAISAL ITEM

BOOK VALUE

FACTOR VALUE

MARKET VALUE

CURRENT ASSETS Cash & short-term investments Accounts receivable

$2,654,280

100%

$2,654,280

$1,932,000

80%

$1,545,000

Prepaid Expenses

$52,343

0%

-

Office furniture, software & equipment, NET TOTAL ASSETS

$207,090

70%

$144,963

$4,344,243 Less: Liabilities

EA VALUE

$(1,051,023) $3,293,220...