Regarding to the finance analysis, before we start up, we would like to fundraising $861,189 for being as the capital to create the company. Based on our estimation, the capital for buying fixed assets and business operation, which is equal to $861,189, and here the company will retain 58.06% ($500k) budget for manufacturing WDIRC products (2,400 sets) in an ODM factory, at the beginning, this is a small-scale production to test the acceptance of markets and the possibility of refined functions. How about the estimation of income between first to third years, the first year there is about -$176,149 (-26.6%) in net loss that included revenue, cost of goods sold, operating expenses, and other expenses. Second year, with the sale increase, the net income is positive and it is about +$411,403 (6.2%), finally is the third year, which net income has +$14,522,556 and its profit is +13.7%. The change of total liabilities and equity between first and third year is $883,567, $1,592,762, and $23,560,118, respectively. If we calculate the ROI (return of investment) on this invest, what are they in different periods? According to our assumption and calculation, ROI on the first, second and third year is 2.598%, 82.08%, and 26.357 times. Why we have a large ROI on our case, which depends on the necessity of rice cooking for every body and for every home, so the company trusts the appliance WDIRC can use a rage in markets to induce the buying intention. Moreover, the payback period, it will take 2.043 years to return the investment capital from seed investors, the time is very short to a big-scale business, and the investment will grow up quickly.

1. Estimation to return of investment (ROI)

Return on Investment (ROI) is a performance measure, used to evaluate the efficiency of this investment. ROI measures the amount of return on this investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of this investment is divided by the cost of the investment, and the result is expressed as a percentage. The return on investment formula is shown in Eq. (1).

Eq. 1 ROI = (Gain from Investment - Cost of Investment)/Cost of Investment

At the beginning, the initial investment is $861,189, after one to three year, the gain of investment grows up to $883,567, $1,592,762 and $23,560,118 1, so according to the equation, ROI on the first, second and third year is 2.599%, 84.94%, and 26.357 times. The index of ROI shows a benefit case on this investment. Why this growth is faster than other products? As we know this is a commodity that we daily used and no competition to be existed till we revealed it, and the company have an exclusive right to sell them in markets, so once the markets accept the products WDIRC, the selling will rapidly grow up and the revenue will also increase at the same time.

2 Payback period(~ 2 year)

The payback period is the length of time required to recover the cost of the investment. This period determinant of whether to undertake this investment, as longer payback periods is typically not desirable for investment positions. Also this method we ignore the time value of money (TVM), unlike other methods of capital budgeting such as net present value (NPV), internal rate of return (IRR) and discounted cash flow. For an uneven cash flow, the formula can be used as Eq. 2. Here A is the last period with a negative cumulative cash flow; B is the absolute value of cumulative cash flow at the end of the period A; C is the total cash flow during the period after A.

Eq. 2 Payback Period =A + (B/C)

According to the income statement in Table 1, the company starts up by fund $861,189, the cumulative cash flow can be shown in Table 1. The initial step the company funds $861,189, the payback period =2 + ABS(-625,935/14,522,556) ≒ 2.043 years. It will spend about two years to recover the cost of investment, this period is short than other consumer electronic investment, since the third year the net cash flow is the benefit of owners.

3. To estimate finance indexes

Regarding the finance ratios are derived from information included in the income statements and balance sheets of thEating Inc. All data included cash flow, income statement, and balance sheet is based on the assumption of sale volume of WDIRC, WDIRC+G and WFR selling from markets. So this information could be as your reference but not be real values. From this finance projection, the manager or investor can analyze the liquidity ratios (working capital ratios), efficiency ratios, profitability ratios and solvency ratios. Especially to a startup company, the health of finance of company is important for founder to operate his business plan. Table 2 shows the ratios from finance projection. The short-term assets to liabilities ratio shows the ability of business to generate cash, normally to have a current ratio of 2:1 or better. In our case, the company has current ratios as 3.22, 2.93 and 2.96 to first, second and third year, respectively. The quick test ratio it is similar to current ratio, its ideal value is 1 or better. As a business owner, we are concerned with optimizing the use of our assets and being a cost-effective producer. The turnover ratio of each indicator (included inventory, accounts receivable/payable, fixed assets and total assets) shows performance better than usual companies. How about the profitability of this company? The ratios are listed below; it includes gross profit margin, net profit margin, operating profit margin, return on assets and return on equity, here we can see the performance of the company operation by our expected. Finally, the equity benefit, it includes debt to equity ratio, total assets to equity ratio and total assets to total liabilities ratio, by these ratios, let us to operate this company with confidence and hope.