> ## Documentation Index
> Fetch the complete documentation index at: https://village-docs.villagelabs.com/llms.txt
> Use this file to discover all available pages before exploring further.

# OperatingAssumptions Guide

> A deep dive into the OperatingAssumptions object, your annual strategic and financial inputs.

## Overview

The `OperatingAssumptions` object is where you define the discretionary, variable financial and strategic decisions for your ESOP on a year-by-year basis. You will create many different `OperatingAssumptions` objects to model various "what-if" scenarios and plan for the future.

<Info>
  **Source of Truth:** Your company's financial forecasts and strategic plans.
</Info>

## Complete Field Reference

Below is a detailed walkthrough of each field in the `OperatingAssumptions` object.

### `contribution_policy`

* **Type:** `object`
* **Required:** Yes
* **Description:** Defines your company's policy for making contributions to the ESOP.

<AccordionGroup>
  <Accordion title="`type`">
    - **Type:** `string`
    - **Values:** `"fixed_amount"`, `"percentage_of_payroll"`
    - **Description:** The method for calculating the annual contribution.
  </Accordion>

  <Accordion title="`annual_amount`">
    * **Type:** `number`
    * **Description:** Required if `type` is `"fixed_amount"`. The total dollar amount to be contributed.
    * **Example:** `500000`
  </Accordion>

  <Accordion title="`percentage`">
    * **Type:** `number`
    * **Description:** Required if `type` is `"percentage_of_payroll"`. The percentage of total payroll to contribute.
    * **Example:** `0.10` for 10% of payroll.
  </Accordion>
</AccordionGroup>

### `share_valuation`

* **Type:** `object`
* **Required:** Yes
* **Description:** Defines the current and projected future value of the company's stock.

<AccordionGroup>
  <Accordion title="`current_price`">
    - **Type:** `number`
    - **Description:** The current price per share of the stock, typically from your most recent 409A valuation.
    - **Example:** `100.00`
  </Accordion>

  <Accordion title="`annual_growth_rate`">
    * **Type:** `number`
    * **Description:** The projected annual growth rate of the share price.
    * **Example:** `0.05` for 5% annual growth.
  </Accordion>
</AccordionGroup>

### `repurchase_strategy`

* **Type:** `object`
* **Required:** Yes
* **Description:** Defines how and when the company will repurchase shares from terminated participants.

<AccordionGroup>
  <Accordion title="`timing`">
    - **Type:** `string`
    - **Values:** `"immediate"`, `"deferred"`
    - **Description:** Whether shares are repurchased immediately upon distribution or deferred.
  </Accordion>

  <Accordion title="`funding_source`">
    * **Type:** `string`
    * **Values:** `"trust_cash"`, `"company_contribution"`, `"company_loan"`
    * **Description:** The source of funds for repurchasing shares.
  </Accordion>
</AccordionGroup>

### `financial_projections`

* **Type:** `object`
* **Required:** No
* **Description:** Your company's financial projections, which can influence other assumptions.
* **Example:**
  ```json theme={null}
  "financial_projections": {
      "revenue_growth_rate": 0.10,
      "ebitda_margin": 0.15
  }
  ```

## Complete Example

```json theme={null}
{
  "contribution_policy": {
    "type": "fixed_amount",
    "annual_amount": 500000
  },
  "share_valuation": {
    "current_price": 100.00,
    "annual_growth_rate": 0.05
  },
  "repurchase_strategy": {
    "timing": "immediate",
    "funding_source": "company_contribution"
  },
  "financial_projections": {
    "revenue_growth_rate": 0.10,
    "ebitda_margin": 0.15
  }
}
```