Auto Inspectors Business Plan

Portland Mobile Auto Inspectors

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Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following table details important financial assumptions.

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 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Projected Profit and Loss

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $51,900 $87,000 $93,000
Direct Cost of Sales $3,633 $6,090 $6,510
Other Production Expenses $0 $0 $0
Total Cost of Sales $3,633 $6,090 $6,510
Gross Margin $48,267 $80,910 $86,490
Gross Margin % 93.00% 93.00% 93.00%
Expenses
Payroll $36,000 $54,000 $66,000
Sales and Marketing and Other Expenses $1,200 $1,200 $1,200
Depreciation $3,804 $3,804 $3,804
Leased Equipment $0 $0 $0
Utilities $1,500 $1,500 $1,500
Insurance $1,200 $1,200 $1,200
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $43,704 $61,704 $73,704
Profit Before Interest and Taxes $4,563 $19,206 $12,786
EBITDA $8,367 $23,010 $16,590
Interest Expense $0 $0 $0
Taxes Incurred $1,369 $5,762 $3,836
Net Profit $3,194 $13,444 $8,950
Net Profit/Sales 6.15% 15.45% 9.62%

8.3 Break-even Analysis

The Break-even Analysis indicates that $4,400 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $3,916
Assumptions:
Average Percent Variable Cost 7%
Estimated Monthly Fixed Cost $3,642

8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $51,900 $87,000 $93,000
Subtotal Cash from Operations $51,900 $87,000 $93,000
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 $51,900 $87,000 $93,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $36,000 $54,000 $66,000
Bill Payments $5,765 $17,594 $14,370
Subtotal Spent on Operations $41,765 $71,594 $80,370
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 $41,765 $71,594 $80,370
Net Cash Flow $10,135 $15,406 $12,630
Cash Balance $21,635 $37,041 $49,671

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $21,635 $37,041 $49,671
Other Current Assets $0 $0 $0
Total Current Assets $21,635 $37,041 $49,671
Long-term Assets
Long-term Assets $19,000 $19,000 $19,000
Accumulated Depreciation $3,804 $7,608 $11,412
Total Long-term Assets $15,196 $11,392 $7,588
Total Assets $36,831 $48,433 $57,259
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,137 $1,295 $1,171
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,137 $1,295 $1,171
Long-term Liabilities $0 $0 $0
Total Liabilities $3,137 $1,295 $1,171
Paid-in Capital $32,000 $32,000 $32,000
Retained Earnings ($1,500) $1,694 $15,138
Earnings $3,194 $13,444 $8,950
Total Capital $33,694 $47,138 $56,089
Total Liabilities and Capital $36,831 $48,433 $57,259
Net Worth $33,694 $47,138 $56,088

8.6 Business Ratios

The following table shows our ratios comparison to our industry classification, Automotive services, nec (SIC#7549).

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 67.63% 6.90% 6.10%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 30.69%
Total Current Assets 58.74% 76.48% 86.75% 55.12%
Long-term Assets 41.26% 23.52% 13.25% 44.88%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.52% 2.67% 2.04% 21.25%
Long-term Liabilities 0.00% 0.00% 0.00% 29.25%
Total Liabilities 8.52% 2.67% 2.04% 50.50%
Net Worth 91.48% 97.33% 97.96% 49.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 93.00% 93.00% 93.00% 100.00%
Selling, General & Administrative Expenses 95.77% 67.89% 65.31% 74.40%
Advertising Expenses 2.31% 1.38% 1.29% 1.76%
Profit Before Interest and Taxes 8.79% 22.08% 13.75% 2.09%
Main Ratios
Current 6.90 28.61 42.42 2.06
Quick 6.90 28.61 42.42 1.37
Total Debt to Total Assets 8.52% 2.67% 2.04% 54.70%
Pre-tax Return on Net Worth 13.54% 40.74% 22.80% 6.05%
Pre-tax Return on Assets 12.39% 39.65% 22.33% 13.36%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 6.15% 15.45% 9.62% n.a
Return on Equity 9.48% 28.52% 15.96% n.a
Activity Ratios
Accounts Payable Turnover 2.84 12.17 12.17 n.a
Payment Days 70 51 32 n.a
Total Asset Turnover 1.41 1.80 1.62 n.a
Debt Ratios
Debt to Net Worth 0.09 0.03 0.02 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $18,498 $35,746 $48,500 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.71 0.56 0.62 n.a
Current Debt/Total Assets 9% 3% 2% n.a
Acid Test 6.90 28.61 42.42 n.a
Sales/Net Worth 1.54 1.85 1.66 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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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 30.00% 30.00% 30.00%
Other 0 0 0
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $51,900 $87,000 $93,000
Direct Cost of Sales $3,633 $6,090 $6,510
Other Production Expenses $0 $0 $0
Total Cost of Sales $3,633 $6,090 $6,510
Gross Margin $48,267 $80,910 $86,490
Gross Margin % 93.00% 93.00% 93.00%
Expenses
Payroll $36,000 $54,000 $66,000
Sales and Marketing and Other Expenses $1,200 $1,200 $1,200
Depreciation $3,804 $3,804 $3,804
Leased Equipment $0 $0 $0
Utilities $1,500 $1,500 $1,500
Insurance $1,200 $1,200 $1,200
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $43,704 $61,704 $73,704
Profit Before Interest and Taxes $4,563 $19,206 $12,786
EBITDA $8,367 $23,010 $16,590
Interest Expense $0 $0 $0
Taxes Incurred $1,369 $5,762 $3,836
Net Profit $3,194 $13,444 $8,950
Net Profit/Sales 6.15% 15.45% 9.62%
Break-even Analysis
Monthly Revenue Break-even $3,916
Assumptions:
Average Percent Variable Cost 7%
Estimated Monthly Fixed Cost $3,642
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $51,900 $87,000 $93,000
Subtotal Cash from Operations $51,900 $87,000 $93,000
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 $51,900 $87,000 $93,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $36,000 $54,000 $66,000
Bill Payments $5,765 $17,594 $14,370
Subtotal Spent on Operations $41,765 $71,594 $80,370
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 $41,765 $71,594 $80,370
Net Cash Flow $10,135 $15,406 $12,630
Cash Balance $21,635 $37,041 $49,671
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $21,635 $37,041 $49,671
Other Current Assets $0 $0 $0
Total Current Assets $21,635 $37,041 $49,671
Long-term Assets
Long-term Assets $19,000 $19,000 $19,000
Accumulated Depreciation $3,804 $7,608 $11,412
Total Long-term Assets $15,196 $11,392 $7,588
Total Assets $36,831 $48,433 $57,259
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,137 $1,295 $1,171
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,137 $1,295 $1,171
Long-term Liabilities $0 $0 $0
Total Liabilities $3,137 $1,295 $1,171
Paid-in Capital $32,000 $32,000 $32,000
Retained Earnings ($1,500) $1,694 $15,138
Earnings $3,194 $13,444 $8,950
Total Capital $33,694 $47,138 $56,089
Total Liabilities and Capital $36,831 $48,433 $57,259
Net Worth $33,694 $47,138 $56,088
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 67.63% 6.90% 6.10%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 30.69%
Total Current Assets 58.74% 76.48% 86.75% 55.12%
Long-term Assets 41.26% 23.52% 13.25% 44.88%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.52% 2.67% 2.04% 21.25%
Long-term Liabilities 0.00% 0.00% 0.00% 29.25%
Total Liabilities 8.52% 2.67% 2.04% 50.50%
Net Worth 91.48% 97.33% 97.96% 49.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 93.00% 93.00% 93.00% 100.00%
Selling, General & Administrative Expenses 95.77% 67.89% 65.31% 74.40%
Advertising Expenses 2.31% 1.38% 1.29% 1.76%
Profit Before Interest and Taxes 8.79% 22.08% 13.75% 2.09%
Main Ratios
Current 6.90 28.61 42.42 2.06
Quick 6.90 28.61 42.42 1.37
Total Debt to Total Assets 8.52% 2.67% 2.04% 54.70%
Pre-tax Return on Net Worth 13.54% 40.74% 22.80% 6.05%
Pre-tax Return on Assets 12.39% 39.65% 22.33% 13.36%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 6.15% 15.45% 9.62% n.a
Return on Equity 9.48% 28.52% 15.96% n.a
Activity Ratios
Accounts Payable Turnover 2.84 12.17 12.17 n.a
Payment Days 70 51 32 n.a
Total Asset Turnover 1.41 1.80 1.62 n.a
Debt Ratios
Debt to Net Worth 0.09 0.03 0.02 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $18,498 $35,746 $48,500 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.71 0.56 0.62 n.a
Current Debt/Total Assets 9% 3% 2% n.a
Acid Test 6.90 28.61 42.42 n.a
Sales/Net Worth 1.54 1.85 1.66 n.a
Dividend Payout 0.00 0.00 0.00 n.a