Plan Outline
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SIC 0139 Agricultural Production - Crops - Field crops, except cash grain
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Agriculture Farm Business Plan
Botanical Bounty
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Financial Plan
The following sections will outline important financial information.
7.1 Important Assumptions
The following table details important Financial Assumptions.
| General Assumptions | |||
| 2003 | 2004 | 2005 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 10.00% | 10.00% |
| Long-term Interest Rate | 4.00% | 4.00% | 4.00% |
| Tax Rate | 30.00% | 30.00% | 30.00% |
| Other | 0 | 0 | 0 |
7.2 Break-even Analysis
The Break-even Analysis is shown below.
| Break-even Analysis | |
| Monthly Revenue Break-even | $13,770 |
| Assumptions: | |
| Average Percent Variable Cost | 8% |
| Estimated Monthly Fixed Cost | $12,737 |
7.3 Projected Profit and Loss
The following table and charts show the Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| 2003 | 2004 | 2005 | |
| Sales | $84,839 | $190,835 | $216,613 |
| Direct Cost of Sales | $6,363 | $14,313 | $16,246 |
| Other Costs of Goods | $0 | $0 | $0 |
| Total Cost of Sales | $6,363 | $14,313 | $16,246 |
| Gross Margin | $78,476 | $176,522 | $200,367 |
| Gross Margin % | 92.50% | 92.50% | 92.50% |
| Expenses | |||
| Payroll | $87,000 | $92,000 | $97,000 |
| Sales and Marketing and Other Expenses | $10,000 | $12,000 | $14,000 |
| Depreciation | $6,996 | $6,996 | $6,996 |
| Mortgage | $24,000 | $24,000 | $24,000 |
| Utilities | $7,000 | $7,000 | $7,000 |
| Insurance | $2,400 | $2,400 | $2,400 |
| Payroll Taxes | $13,050 | $13,800 | $14,550 |
| Other | $2,400 | $2,400 | $2,400 |
| Total Operating Expenses | $152,846 | $160,596 | $168,346 |
| Profit Before Interest and Taxes | ($74,370) | $15,926 | $32,021 |
| EBITDA | ($67,374) | $22,922 | $39,017 |
| Interest Expense | $3,908 | $3,640 | $3,280 |
| Taxes Incurred | $0 | $3,686 | $8,623 |
| Net Profit | ($78,278) | $8,600 | $20,119 |
| Net Profit/Sales | -92.27% | 4.51% | 9.29% |
7.4 Projected Cash Flow
The following table and chart display the Projected Cash Flow, including our purchase of new equipment, and the loan (and principal repayment) related to the farm's expansion.
| Pro Forma Cash Flow | |||
| 2003 | 2004 | 2005 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $21,210 | $47,709 | $54,153 |
| Cash from Receivables | $58,575 | $126,816 | $158,493 |
| Subtotal Cash from Operations | $79,785 | $174,525 | $212,647 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $100,000 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| Subtotal Cash Received | $179,785 | $174,525 | $212,647 |
| Expenditures | 2003 | 2004 | 2005 |
| Expenditures from Operations | |||
| Cash Spending | $87,000 | $92,000 | $97,000 |
| Bill Payments | $77,335 | $81,273 | $91,737 |
| Subtotal Spent on Operations | $164,335 | $173,273 | $188,737 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $10 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $5,000 | $8,000 | $10,000 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $35,000 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $204,335 | $181,273 | $198,747 |
| Net Cash Flow | ($24,550) | ($6,748) | $13,900 |
| Cash Balance | $10,450 | $3,702 | $17,601 |
7.5 Projected Balance Sheet
The Projected Balance Sheet table appears below.
| Pro Forma Balance Sheet | |||
| 2003 | 2004 | 2005 | |
| Assets | |||
| Current Assets | |||
| Cash | $10,450 | $3,702 | $17,601 |
| Accounts Receivable | $13,054 | $29,364 | $33,330 |
| Other Current Assets | $4,000 | $4,000 | $4,000 |
| Total Current Assets | $27,504 | $37,066 | $54,932 |
| Long-term Assets | |||
| Long-term Assets | $70,000 | $70,000 | $70,000 |
| Accumulated Depreciation | $13,996 | $20,992 | $27,988 |
| Total Long-term Assets | $56,004 | $49,008 | $42,012 |
| Total Assets | $83,508 | $86,074 | $96,944 |
| Liabilities and Capital | 2003 | 2004 | 2005 |
| Current Liabilities | |||
| Accounts Payable | $4,876 | $6,842 | $7,603 |
| Current Borrowing | $0 | $0 | ($10) |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $4,876 | $6,842 | $7,593 |
| Long-term Liabilities | $95,000 | $87,000 | $77,000 |
| Total Liabilities | $99,876 | $93,842 | $84,593 |
| Paid-in Capital | $0 | $0 | $0 |
| Retained Earnings | $61,910 | ($16,368) | ($7,768) |
| Earnings | ($78,278) | $8,600 | $20,119 |
| Total Capital | ($16,368) | ($7,768) | $12,351 |
| Total Liabilities and Capital | $83,508 | $86,074 | $96,944 |
| Net Worth | ($16,368) | ($7,768) | $12,351 |
7.6 Business Ratios
Business ratios for Botanical Bounty. SIC industry class: Herb or spice farm, code 0139.9905.
| Ratio Analysis | ||||
| 2003 | 2004 | 2005 | Industry Profile | |
| Sales Growth | 82.45% | 124.94% | 13.51% | 10.17% |
| Percent of Total Assets | ||||
| Accounts Receivable | 15.63% | 34.11% | 34.38% | 7.31% |
| Other Current Assets | 4.79% | 4.65% | 4.13% | 27.46% |
| Total Current Assets | 32.94% | 43.06% | 56.66% | 44.97% |
| Long-term Assets | 67.06% | 56.94% | 43.34% | 55.03% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 5.84% | 7.95% | 7.83% | 24.14% |
| Long-term Liabilities | 113.76% | 101.08% | 79.43% | 28.08% |
| Total Liabilities | 119.60% | 109.02% | 87.26% | 52.22% |
| Net Worth | -19.60% | -9.02% | 12.74% | 47.78% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 92.50% | 92.50% | 92.50% | 47.84% |
| Selling, General & Administrative Expenses | 191.95% | 90.33% | 85.38% | 33.12% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.26% |
| Profit Before Interest and Taxes | -87.66% | 8.35% | 14.78% | 0.82% |
| Main Ratios | ||||
| Current | 5.64 | 5.42 | 7.23 | 1.16 |
| Quick | 5.64 | 5.42 | 7.23 | 0.55 |
| Total Debt to Total Assets | 119.60% | 109.02% | 87.26% | 0.86% |
| Pre-tax Return on Net Worth | 478.24% | -158.16% | 232.70% | 61.86% |
| Pre-tax Return on Assets | -93.74% | 14.27% | 29.65% | 2.24% |
| Additional Ratios | 2003 | 2004 | 2005 | |
| Net Profit Margin | -92.27% | 4.51% | 9.29% | n.a |
| Return on Equity | 0.00% | 0.00% | 162.89% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.87 | 4.87 | 4.87 | n.a |
| Collection Days | 59 | 54 | 70 | n.a |
| Accounts Payable Turnover | 14.17 | 12.17 | 12.17 | n.a |
| Payment Days | 32 | 26 | 28 | n.a |
| Total Asset Turnover | 1.02 | 2.22 | 2.23 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.00 | 0.00 | 6.85 | n.a |
| Current Liab. to Liab. | 0.05 | 0.07 | 0.09 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $22,628 | $30,224 | $47,339 | n.a |
| Interest Coverage | -19.03 | 4.38 | 9.76 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.98 | 0.45 | 0.45 | n.a |
| Current Debt/Total Assets | 6% | 8% | 8% | n.a |
| Acid Test | 2.96 | 1.13 | 2.85 | n.a |
| Sales/Net Worth | 0.00 | 0.00 | 17.54 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
