Premier Airport Transportation Service

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Airport Taxi Business Plan

Financial Plan

The following sections will detail important financial information.

7.1 Important Assumptions

The following table highlights some of the important financial assumptions for PATS.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis indicates what PATS must have in averaged monthly revenue to break even.

Break-even Analysis
Monthly Revenue Break-even $15,131
Assumptions:
Average Percent Variable Cost 20%
Estimated Monthly Fixed Cost $12,105

7.3 Projected Profit and Loss

The following table presents the projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $168,824 $282,759 $319,748
Direct Cost of Sales $33,765 $56,552 $63,950
Other $0 $0 $0
Total Cost of Sales $33,765 $56,552 $63,950
Gross Margin $135,059 $226,207 $255,798
Gross Margin % 80.00% 80.00% 80.00%
Expenses
Payroll $111,700 $138,900 $138,900
Sales and Marketing and Other Expenses $3,100 $3,600 $3,600
Depreciation $504 $498 $498
Web site maintenance $600 $600 $600
Utilities $1,200 $1,200 $1,200
Insurance $5,400 $5,400 $5,400
Rent $6,000 $0 $0
Payroll Taxes $16,755 $20,835 $20,835
Other $0 $0 $0
Total Operating Expenses $145,259 $171,033 $171,033
Profit Before Interest and Taxes ($10,200) $55,174 $84,765
EBITDA ($9,696) $55,672 $85,263
Interest Expense $0 $0 $0
Taxes Incurred $0 $13,794 $21,545
Net Profit ($10,200) $41,381 $63,221
Net Profit/Sales -6.04% 14.63% 19.77%

7.4 Projected Cash Flow

The following chart and table display the projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $168,824 $282,759 $319,748
Subtotal Cash from Operations $168,824 $282,759 $319,748
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 $0 $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 $168,824 $282,759 $319,748
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $111,700 $138,900 $138,900
Bill Payments $57,893 $102,525 $115,884
Subtotal Spent on Operations $169,593 $241,425 $254,784
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $169,593 $241,425 $254,784
Net Cash Flow ($769) $41,334 $64,964
Cash Balance $30,206 $71,540 $136,504

7.5 Projected Balance Sheet

The following table details the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $30,206 $71,540 $136,504
Other Current Assets $0 $0 $0
Total Current Assets $30,206 $71,540 $136,504
Long-term Assets
Long-term Assets $1,500 $1,500 $1,500
Accumulated Depreciation $504 $1,002 $1,500
Total Long-term Assets $996 $498 $0
Total Assets $31,202 $72,038 $136,504
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $8,927 $8,382 $9,627
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $8,927 $8,382 $9,627
Long-term Liabilities $0 $0 $0
Total Liabilities $8,927 $8,382 $9,627
Paid-in Capital $35,000 $35,000 $35,000
Retained Earnings ($2,525) ($12,725) $28,656
Earnings ($10,200) $41,381 $63,221
Total Capital $22,275 $63,656 $126,877
Total Liabilities and Capital $31,202 $72,038 $136,504
Net Worth $22,275 $63,656 $126,877

7.6 Business Ratios

The business ratios table below is generated by the planning software using the interconnected tables. Standard industry ratios, based upon Standard Industrial Classification Code (SIC) 4111, Local and Suburban Transit, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 67.49% 13.08% 3.70%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 45.30%
Total Current Assets 96.81% 99.31% 100.00% 64.40%
Long-term Assets 3.19% 0.69% 0.00% 35.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 28.61% 11.64% 7.05% 31.20%
Long-term Liabilities 0.00% 0.00% 0.00% 25.20%
Total Liabilities 28.61% 11.64% 7.05% 56.40%
Net Worth 71.39% 88.36% 92.95% 43.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.00% 80.00% 80.00% 66.70%
Selling, General & Administrative Expenses 86.04% 65.37% 60.12% 46.50%
Advertising Expenses 0.36% 0.21% 0.19% 0.50%
Profit Before Interest and Taxes -6.04% 19.51% 26.51% 2.90%
Main Ratios
Current 3.38 8.53 14.18 1.61
Quick 3.38 8.53 14.18 1.17
Total Debt to Total Assets 28.61% 11.64% 7.05% 56.40%
Pre-tax Return on Net Worth -45.79% 86.68% 66.81% 4.60%
Pre-tax Return on Assets -32.69% 76.59% 62.10% 10.50%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -6.04% 14.63% 19.77% n.a
Return on Equity -45.79% 65.01% 49.83% n.a
Activity Ratios
Accounts Payable Turnover 7.49 12.17 12.17 n.a
Payment Days 27 31 28 n.a
Total Asset Turnover 5.41 3.93 2.34 n.a
Debt Ratios
Debt to Net Worth 0.40 0.13 0.08 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $21,279 $63,158 $126,877 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.18 0.25 0.43 n.a
Current Debt/Total Assets 29% 12% 7% n.a
Acid Test 3.38 8.53 14.18 n.a
Sales/Net Worth 7.58 4.44 2.52 n.a
Dividend Payout 0.00 0.00 0.00 n.a