Profit analysis - Real-Projects-Digitalization/RPD-Defendo GitHub Wiki

1. Revenue (average per year)

For each year, we have a revenue range (196,000€ to 226,000€ for Year 1). To simplify, we calculate the average of the revenue for each year:

Year 1: Revenue range from 196,000€ to 226,000€, Average = (196,000€ + 226,000€) / 2 = 211,000€

Year 2: Revenue range from 588,000€ to 678,000€, Average = (588,000€ + 678,000€) / 2 = 633,000€

Year 3: Revenue range from 1,176,000€ to 1,356,000€, Average = (1,176,000€ + 1,356,000€) / 2 = 1,266,000€

Year 4: Revenue range from 2,352,000€ to 2,712,000€, Average = (2,352,000€ + 2,712,000€) / 2 = 2,532,000€

Year 5: Revenue range from 4,704,000€ to 5,424,000€, Average = (4,704,000€ + 5,424,000€) / 2 = 5,064,000€

2. Cost structure:

The costs consist of fixed costs and variable costs:

Fixed costs:

Year 1: Fixed costs include the development of the app, R&D, office and administrative expenses, marketing, and sales:

  • App development: 150,000€
  • R&D: 100,000€
  • Office and administrative costs (12 months x 5,000€): 60,000€
  • Marketing and sales: 20,000€
  • CRM tools: 12,000€
  • Total Fixed Costs Year 1: 342,000€

From Year 2 onwards: Office and administrative costs and CRM tools remain constant:

  • Office and administrative costs: 60,000€
  • CRM tools: 12,000€
  • Total Fixed Costs from Year 2: 72,000€

Variable costs:

These vary depending on the number of restrooms (toilets) and include:

  • Scanners (cost of manufacturing the devices)
  • Installation (cost of installation)
  • Maintenance (monthly maintenance costs per restroom)

The calculations for Year 1 to Year 5 are as follows:

Year 1: For 30 restrooms

  • Scanners: 30 restrooms x 1,200€ = 36,000€
  • Installation: 30 restrooms x 500€ = 15,000€
  • Maintenance (monthly): 30 restrooms x 600€ = 18,000€ (12 months)
  • Total Variable Costs Year 1: 36,000€ + 15,000€ + 18,000€ = 69,000€

Year 2: For 90 restrooms

  • Scanners: 90 restrooms x 1,200€ = 108,000€
  • Installation: 90 restrooms x 500€ = 45,000€
  • Maintenance: 90 restrooms x 600€ = 54,000€
  • Total Variable Costs Year 2: 108,000€ + 45,000€ + 54,000€ = 207,000€

Year 3: For 135 restrooms

  • Scanners: 135 restrooms x 1,200€ = 162,000€
  • Installation: 135 restrooms x 500€ = 67,500€
  • Maintenance: 135 restrooms x 600€ = 81,000€
  • Total Variable Costs Year 3: 162,000€ + 67,500€ + 81,000€ = 310,500€

Year 4: For 270 restrooms

  • Scanners: 270 restrooms x 1,200€ = 324,000€
  • Installation: 270 restrooms x 500€ = 135,000€
  • Maintenance: 270 restrooms x 600€ = 162,000€
  • Total Variable Costs Year 4: 324,000€ + 135,000€ + 162,000€ = 621,000€

Year 5: For 450 restrooms

  • Scanners: 450 restrooms x 1,200€ = 540,000€
  • Installation: 450 restrooms x 500€ = 225,000€
  • Maintenance: 450 restrooms x 600€ = 270,000€
  • Total Variable Costs Year 5: 540,000€ + 225,000€ + 270,000€ = 1,035,000€

3. Profit calculation:

Now, we calculate the profit for each year by subtracting the costs (fixed costs + variable costs) from the revenue (average):

Year 1:

  • Revenue (Average): 211,000€
  • Fixed Costs: 342,000€
  • Variable Costs: 69,000€
  • Total Costs: 342,000€ + 69,000€ = 411,000€
  • Profit: 211,000€ - 411,000€ = -200,000€

Year 2:

  • Revenue (Average): 633,000€
  • Fixed Costs: 72,000€
  • Variable Costs: 207,000€
  • Total Costs: 72,000€ + 207,000€ = 279,000€
  • Profit: 633,000€ - 279,000€ = 354,000€

Year 3:

  • Revenue (Average): 1,266,000€
  • Fixed Costs: 72,000€
  • Variable Costs: 310,500€
  • Total Costs: 72,000€ + 310,500€ = 382,500€
  • Profit: 1,266,000€ - 382,500€ = 883,500€

Year 4:

  • Revenue (Average): 2,532,000€
  • Fixed Costs: 72,000€
  • Variable Costs: 621,000€
  • Total Costs: 72,000€ + 621,000€ = 693,000€
  • Profit: 2,532,000€ - 693,000€ = 1,839,000€

Year 5:

  • Revenue (Average): 5,064,000€
  • Fixed Costs: 72,000€
  • Variable Costs: 1,035,000€
  • Total Costs: 72,000€ + 1,035,000€ = 1,107,000€
  • Profit: 5,064,000€ - 1,107,000€ = 3,957,000€

Conclusion:

In Year 1, the company incurs a loss of approximately 200,000€ due to high initial investments.

From Year 2 onwards, the company becomes profitable, with a profit of 354,000€. The profit grows significantly over the years, reaching 3,957,000€ in Year 5.

These detailed calculations show how the revenues, costs, and profits evolve over the years and how the company becomes profitable as the number of restrooms and universities expands.