AutoNest Retail Units Sold, 2015-2019

Year Number of Retail Units Sold

2015 6523
2016 18,761
2017 44,252
2018 94,108
2019 177,549

AutoNest Market Coverage

Year Total Market Covered at Year End
2015 9
2016 21
2017 44
2018 85
2019 146

Car Vending Machine Placements

Year Number of Vending Machine
2015 1
2016 2
2017 7
2018 15
2019 23

Year Inventory Units

2014 652
2015 1,842
2016 7,310
2017 9,505
2018 14,657
2019 25,977

AutoNest Key Results, 2015-2019

2019

Net sales and operating revenues: ($)

Used vehicle sales, net 3,420,659
Wholesale vehicle sales 267,576
Other sales and revenues 251,661
Total net sales and operating revenues $3,939,896
Gross profit: ($)
Total gross profit $506,414
Net Loss -364,639
Unit sales information:
Used vehicle unit sales 177,549
Wholesale vehicle unit sales 39,895
Per unit selling prices: ($)
Unit vehicles 19,266
Wholesale vehicles 6,707

Expenses Retail
Car acquisition 2,736,527,227
Reconditioning 434,995,050
Inbound cost 53,264,700
Inspection cost 17,754,900
Total COGS 3,242,541,877

Operational
Inbounding VM 6,900,000
Inbounding IRC 8,000,000

SG&A
Leases VM 46,000,000
Salaries VM 46,000,000
Advertising costs 35,509,800

Direct costs
Delivery 396,648,000
Auction cost

EBIT (64,559,800)
Others 169,117,200
300,079,200

Note - Net loss is the bottom line item. However, for ROIC, we calculcate NOPAT = EBIT(1-Tax rate)

Capital expenditure of building each car vending mach $5,000,000

VM Markets 23
Delivery markets 123
Acquaisition COGS(Purchasing cost)(% of revenue) 80%
Reconditioning cost/vehicle $3,500
Inbound cost/car $300
inspection cost/car $100
Other COGS Reconditioning+inbound+inspection

Number of IRC 8
Operational expense/IRC $1,000,000
Operational expense/VM $300,000

Retail operation cost put under SG&A

Annual lease/VM $2,000,000
Salaries for each VM allocated to rtl operation $2,000,000
Stock capacity of VM 27
Turnaround rate of a car 5
Useful life of cars in auto nest inventory 5
Direct cost for delivery/vehicle $3,000
Advertising expense/car sold $200

Wholesale market(No reconditioning & not displayed on VM)

Auction cost/car $600

2019
Fixed capital $115,000,000
Working capital $496,000,000

Tax rate 5%
Cost of capital 10%
Implied % U.S. Population Coverage
10%
20%
41%
59%
67%

Results of Operation
Fiscal Year Ending February of:
2018 2017 2016 2015
(dollars in thousands)
($) ($) ($) ($)
1,785,045 796,915 341,989 124,972
73,584 28,514 10,163 3,743
 96,838 33,441 12,996 1,677
$1,955,467 $858,870 $365,148 $130,392
($) ($) ($) ($)
$196,709 $68,091 $19,197 $1,346
-254,745 -164,316 -93,112 -36,780

94,108 44,252 18,761 6,523

15,125 6,509 2,651 1,070
($) ($) ($) ($)
18,968 18,009 18,229 19,159
4,865 4,381 3,834 3,498

Wholesale

190,940,123

Total rev
3,939,896,000
Gross profit Total COGS
506,414,000 3,433,482,000

7,979,000

23,937,000

T(1-Tax rate)
70% of cars reconditioned

Always fully stocked

days
years

Regardless of market it was sold at

 NOPAT
-64,559,800

ROIC
-10.57%

Capital
611000000

NOTE
1) NOPAT = EBIT(1-Tax rate)
Tax rate is not applied due to negative EBIT
EBIT Total net sales & operating revenues
-64,559,800 3939895999.99999

Tax rate
5%

Fixed capital
115000000

Working capital
496000000

Fixed capital/VM
5000000
Total Expenses
Working capital/unit 4,004,455,800
2281.047074

Other sales & revenue/units

1157.36098029838

Total Gross Profit

506414000

Total COGS
3,433,482,000
Revenue from Retail sales Revenue from VM sales
3420659033.99999 873385578

Revenue from Delivery sales

2547273455.99999

Revenue from Wholesale No. of wholesale units sold

267575765 39,895

Other sales. & Revenue Selling price/unit for wholesale

251661201 6,707

Total COGS COGS- VM

3,433,482,000 827907512.4

COGS - Delivery
2414634364.79999
 COGS - Wholesale
190,940,123

Wholesale Auction cost

23937000

Operational expense IRC - operational expense

527484999.999999 8000000

Advertising expense VM- Operational Expense

43,488,800 98900000

Delivery- Direct cost

396647999.999999
No.of VM unit sold
45333

No. of Delivery units sold

132,216

Total No. of Retail unit sold

177,549

Selling price/unit for retail

19,266

VM - Other COGS
129199050

VM- Acquisition COGS

698708462.4

Delivery - Other COGS

376815599.999999

Delivery- Acquisition COGS

 2037818764.8

Number of IRC
8

Expense/IRC
1000000

Number of VM
23

Expense/VM
300000

Annual lease/VM
2000000

Salaries for each VM

2000000

Direct cost for delivery/vehicle

3000

Advertising expense/car
200
Number of cars sold/Delivery market
1075

Number of Delivery markets

123

Number of Vending machine

23

Stock/VM
27

Turnover rate(days)
5

VM Capacity
621

Annual turnover
73

Reconditioning cost/vehicle No of cars reconditioned

3500 70% Of total cars sold

Inbound cost/car
300

Inspection cost/car
100

Acquisition COGS/car Acquisition COGS

15412.8 80%
Wholesale auction cost/car
600
total cars sold
 Percentage
Stock/VM ROIC improvement
Base 27 -10.57%
10% 29.7 -8.96% 1.61%
20% 32.4 -7.41% 3.16%
50% 40.5 -3.04% 7.53%
-20% 21.6 -13.95% -3.38%
-10% 24.3 -12.23% -1.66%

Percentage
Number of VM ROIC improvement
Base 23.0 -10.57%
10% 25.3 4.29% 14.85%
20% 27.6 18.15% 28.71%
50% 34.5 54.68% 65.25%
-20% 18.4 -43.70% -33.13%
-10% 20.7 -26.52% -15.95%
24 -3.98% 6.59%

Percentage
Turnover rate ROIC improvement
Base 5 -10.57%
-10% 4.5 -8.78% 1.78%
-20% 4 -6.65% 3.92%
-50% 2.5 3.40% 13.97%
20% 6 -13.37% -2.80%
10% 5.5 -12.07% -1.51%

Percentage
Number of cars sold/Delivery market ROIC improvement
Base 1075 -10.57%
10% 1182 -12.21% -1.65%
20% 1290 -13.71% -3.14%
50% 1612 -17.49% -6.93%
-20% 860 -6.73% 3.83%
-10% 967 -8.75% 1.82%
-30% 752.448780487803 -4.48% 6.08%

Retail market margin

Percentage
COGS Acquisition/car ROIC improvement
Base 15412.8 -10.57%
-1% 15258.672 -6.09% 4.48%
-2% 15104.544 -1.61% 8.96%
-3% 14950.416 2.87% 13.44%
-4% 14796.288 7.35% 17.92%
-5% 14642.16 11.83% 22.39%
-6% 14488.032 16.31% 26.87%
-7% 14333.904 20.79% 31.35%
-10% 13871.52 34.22% 44.79%
2% 15721.056 -19.52% -8.96%
5% 16183.44 -32.96% -22.39%

Percentage
acquisition COGS as % of revenue ROIC improvement
Base 80% -10.57%
-1% 79% -4.97% 5.60%
-2% 78% 0.63% 11.20%
-3% 77% 6.23% 16.80%
-4% 76% 11.83% 22.39%
-5% 75% 17.43% 27.99%
2% 82% -21.76% -11.20%
5% 85% -38.56% -27.99%

Percentage
Selling Price ROIC improvement
Base 19266 -10.57%
1% 19458.66 -4.97% 5.60%
2% 19651.32 0.63% 11.20%
3% 19843.98 6.23% 16.80%
4% 20036.64 11.83% 22.39%
5% 20229.3 17.43% 27.99%
10% 21192.6 45.42% 55.98%
20% 23119.2 101.40% 111.97%
-10% 17339.4 -66.55% -55.98%
-5% 18302.7 -38.56% -27.99%
-2% 18880.68 -21.76% -11.20%

Percentage
Number of delivery markets ROIC improvement
Base 123 -10.57%
10% 135.3 -12.21% -1.65%
20% 147.6 -13.71% -3.14%
50% 184.5 -17.49% -6.93%
-20% 98.4 -6.73% 3.83%
-10% 110.7 -8.75% 1.82%
-50% 61.5 0.90% 11.47%
 Percentage
% of car that need reconditioning ROIC improvement
Base 70% -10.57%
-2% 68% -8.53% 2.03%
-4% 66% -6.50% 4.07%
-5% 65% -5.48% 5.09%
-7% 63% -3.45% 7.12%
-10% 60% -0.40% 10.17%
-20% 50% 9.77% 20.34%
2% 72% -12.60% -2.03%
5% 75% -15.65% -5.09%
10% 80% -20.74% -10.17%

% increase/Decrease Improvement in ROIC

Stock/VM 10% 1.61%
Number of VM 10% 14.85%
Turnover rate -10% 1.78%
acquisition COGS as % of revenue -10% 45.42
Selling Price 10% 55.98%
Number of delivery markets -10% 1.82%
% of car that need reconditioning -10% 10.17%

Number of VM Revenue Cost

20 3819132666.52349 3325494063.59999
21
22
23
24
25
26
27
28
29
30
7
3
6
2
1
5
4
 Pessimistic
2019 2020
Demand 45,333 45,333
Sales 873,385,578 873,385,578
COGS 836,850,126 836,850,126
Gross Profit (Loss) 36,535,452 36,535,452
Lease For VMs 46,000,000 46,000,000
Salary For VMs 48,070,000 48,070,000
Advertising Expense 9,066,600 9,066,600

Depreciation Fixed Capital (10%) 11,500,000 13,800,000

Depreciation of Inventory and Expenses (8.8%
of expenses) 67,274,411 67,274,411

EBIT (145,375,559) (147,675,559)

Tax Rate (5%) (138,106,781) (140,291,781)
Investment (23,000,000)
CF (161,106,781) (140,291,781)
Net CF (581,982,123)

Pessimistic Most Likely

Floors (581,982,123) (642,906,743)
10
20
30
40
50

The company should refrain from increasing VM capacity because, despite higher demand and additional VMs, net
across all scenarios. The marginal costs significantly exceed the marginal benefits. However, if the overall demand
100% year-over-year, there could be a potential return on investment when demand hits approximately
 Pessimistic Most Likely
2021 2022 2019 2020
45,333 45,333 45,333 68,000
873,385,578 873,385,578 873,385,578 1,310,078,367
836,850,126 836,850,126 836,850,126 1,255,275,189
36,535,452 36,535,452 36,535,452 54,803,178
46,000,000 46,000,000 46,000,000 46,000,000
48,070,000 48,070,000 48,070,000 48,070,000
9,066,600 9,066,600 9,066,600 13,599,900

13,800,000 13,800,000 11,500,000 13,800,000

67,274,411 67,274,411 67,274,411 100,911,616

(147,675,559) (147,675,559) (145,375,559) (167,578,338)

(140,291,781) (140,291,781) (138,106,781) (159,199,421)
(23,000,000)
(140,291,781) (140,291,781) (161,106,781) (159,199,421)
(642,906,743)

Optimistic
(645,007,591)
(645,007,591)
(645,007,591)
(645,007,591)
(645,007,591)
(645,007,591)

demand and additional VMs, net cash flow remains negative

However, if the overall demand for the retail units grows by
when demand hits approximately 1,420,392 units.
Most Likely Optimistic
2021 2022 2019 2020
101,999 152,999 45,333 90,666
1,358,599,788 1,358,599,788 873,385,578 1,358,599,788
1,301,766,863 1,301,766,863 836,850,126 1,301,766,863
56,832,925 56,832,925 36,535,452 56,832,925
46,000,000 46,000,000 46,000,000 46,000,000
48,070,000 48,070,000 48,070,000 48,070,000
14,103,600 14,103,600 9,066,600 14,103,600

13,800,000 13,800,000 11,500,000 13,800,000

104,649,083 104,649,083 67,274,411 104,649,083

(169,789,758) (169,789,758) (145,375,559) (169,789,758)

(161,300,270) (161,300,270) (138,106,781) (161,300,270)
(23,000,000)
(161,300,270) (161,300,270) (161,106,781) (161,300,270)
(645,007,591)
Optimistic
2021 2022 Number of floors
181,332 362,664
1,358,599,788 1,358,599,788 Revenue per car
1,301,766,863 1,301,766,863 COGS as percentage
56,832,925 56,832,925 Retail
46,000,000 46,000,000 Cost of VM
48,070,000 48,070,000 No. of VMs
14,103,600 14,103,600 Additional Markets

13,800,000 13,800,000 Cost of VM Improvement

104,649,083 104,649,083 Acquisition COGS

Additional VM cost /
(169,789,758) (169,789,758) floor
(161,300,270) (161,300,270) Cost of VM Car
Other COGS
(161,300,270) (161,300,270) Var Cost
Reconditioning Cost

Inspection Cost
Delivery Cost
Advert Expense
Auction Expense
% reconditioning cost
Operational Expenses
IRC
No Of IRCs
VM
Lease
Salary

Additional Salary / floor

SG&A
Capital
Fixed Capital
Working Capital

Additional floor VM cost

No of Cars in Vm
Car Turnover Rate in
days
Cars sold in an year
No Of Cars Sold in 1 Vm
Additional Cars / floor
No of Additional cars per
extra floor
Cars Sold Through VM
% cars
Delivery Cars Retail
Depreciation of
Inventory
Cost Of Capital
Inventory in WC(70%)
Expenses as part of rev
Tax Rate
 1

19266
0.8

5000000
23
123

1000000

1000000
18460.0649855152

3500

100
3000
200
600
0.7

1000000
8
300000
2000000
2000000

90000
4000000

138000000
496000000

27

5
73
1971
 15

25185
70518
0.25532669854519
132216

0.2
0.1
347200000
8%
5%