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Swiss Financial Model

In early 2020, Swifiss, a small Swiss manufacturer of cosmetics products, was approached by one of its
clients. The client queried whether the company could manufacture a hand sanitizing product. Philipp
Untersander, the CEO of Swifiss, quickly thought about the opportunity. Due to the Covid-19 crisis,
Swifiss’ orders for cosmetic products had declined by 80 per cent. Philipp decided to take up the new
product challenge. Within only two days, the company managed to develop, produce and present the
new product to its client. The client was excited about the product and so the company decided to set
up production and launch the new hand sanitizing product.
By 23 March 2020, the company had already produced and delivered 100,000 flacons of hand sanitizer.
The company sourced 9 tonnes of alcohol from a nearby brewery, and repurposed unused cosmetic
flacons as hand sanitizing flacons. The main customers for the new product line were regional
businesses (40%) and pharmacies and drug stores (60%) in the eastern part of Switzerland. Swisfiss
intended to continue producing the new product post Covid-19. In addition, the company planned to
develop some new hand cream to nurture hands, and a new soap that had special sanitizing ability.
Swifiss had three investors: Ernst Sutter, Christine Deppermann and Philipp Untersander. Together
they had acquired some production assets and employees from the bankrupt cosmetics producer
Intracosmed in August and September 2019 for CHF 20,000. In total, they invested CHF 3 million in
starting the new venture. The new business opened on 1 October 2019. The new venture employed 24
full-time and 8 part-time employees. The investor’s expected the company to achieve a turnover of
CHF 6.5 million by the end of 2020 and to break-even with a profit of around CHF 0.
Assignment Tasks
Create a simple financial model showing quarterly pro forma forecasts starting with the first
quarter ending on 31 March 2020. Use relevant information provided in the case study. You
may also use the comparables data for the Basic Chemicals sector shown in Exhibits 1 & 2 to
estimate the pro forma statements. Discuss the key underlying assumptions of your model.
Based on your forecast, also discuss whether the company requires additional funds.
[10 marks