Bees' Circus

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Children's Play Program Business Plan

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Financial Plan

The following is the financial plan for Bees' Circus.

7.1 Break-even Analysis

The monthly break-even point is presented in the following table and chart.

Break-even Analysis
Monthly Revenue Break-even $20,918
Assumptions:
Average Percent Variable Cost 5%
Estimated Monthly Fixed Cost $19,933

7.2 Projected Profit and Loss

The following table and chart highlight the projected profit and loss for three years.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $244,200 $272,000 $315,000
Direct Cost of Sales $11,500 $9,800 $11,300
Other Production Expenses $0 $0 $0
Total Cost of Sales $11,500 $9,800 $11,300
Gross Margin $232,700 $262,200 $303,700
Gross Margin % 95.29% 96.40% 96.41%
Expenses
Payroll $180,000 $191,000 $202,000
Sales and Marketing and Other Expenses $2,400 $3,000 $3,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $3,000 $3,000 $3,000
Insurance $4,800 $4,800 $4,800
Rent $22,000 $22,000 $22,000
Payroll Taxes $27,000 $28,650 $30,300
Other $0 $0 $0
Total Operating Expenses $239,200 $252,450 $265,100
Profit Before Interest and Taxes ($6,500) $9,750 $38,600
EBITDA ($6,500) $9,750 $38,600
Interest Expense $7,549 $6,751 $5,918
Taxes Incurred $0 $900 $9,805
Net Profit ($14,049) $2,099 $22,877
Net Profit/Sales -5.75% 0.77% 7.26%

7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $244,200 $272,000 $315,000
Subtotal Cash from Operations $244,200 $272,000 $315,000
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 $244,200 $272,000 $315,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $180,000 $191,000 $202,000
Bill Payments $73,225 $77,440 $89,200
Subtotal Spent on Operations $253,225 $268,440 $291,200
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 $8,328 $8,328 $8,328
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $261,553 $276,768 $299,528
Net Cash Flow ($17,353) ($4,768) $15,472
Cash Balance $34,447 $29,680 $45,151

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $34,447 $29,680 $45,151
Other Current Assets $0 $0 $0
Total Current Assets $34,447 $29,680 $45,151
Long-term Assets
Long-term Assets $30,000 $30,000 $30,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $30,000 $30,000 $30,000
Total Assets $64,447 $59,680 $75,151
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $5,024 $6,485 $7,407
Current Borrowing $30,000 $30,000 $30,000
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $35,024 $36,485 $37,407
Long-term Liabilities $41,672 $33,344 $25,016
Total Liabilities $76,696 $69,829 $62,423
Paid-in Capital $70,000 $70,000 $70,000
Retained Earnings ($68,200) ($82,249) ($80,149)
Earnings ($14,049) $2,099 $22,877
Total Capital ($12,249) ($10,149) $12,728
Total Liabilities and Capital $64,447 $59,680 $75,151
Net Worth ($12,249) ($10,149) $12,728

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8351, Child Day Care Services, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 11.38% 15.81% 9.50%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 26.80%
Total Current Assets 53.45% 49.73% 60.08% 44.70%
Long-term Assets 46.55% 50.27% 39.92% 55.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 54.35% 61.13% 49.78% 31.80%
Long-term Liabilities 64.66% 55.87% 33.29% 31.00%
Total Liabilities 119.01% 117.01% 83.06% 62.80%
Net Worth -19.01% -17.01% 16.94% 37.20%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.29% 96.40% 96.41% 0.00%
Selling, General & Administrative Expenses 101.04% 95.63% 89.15% 75.60%
Advertising Expenses 0.98% 1.10% 0.95% 0.70%
Profit Before Interest and Taxes -2.66% 3.58% 12.25% 2.60%
Main Ratios
Current 0.98 0.81 1.21 1.27
Quick 0.98 0.81 1.21 1.14
Total Debt to Total Assets 119.01% 117.01% 83.06% 62.80%
Pre-tax Return on Net Worth 114.70% -29.55% 256.77% 5.40%
Pre-tax Return on Assets -21.80% 5.03% 43.49% 14.60%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -5.75% 0.77% 7.26% n.a
Return on Equity 0.00% 0.00% 179.74% n.a
Activity Ratios
Accounts Payable Turnover 15.57 12.17 12.17 n.a
Payment Days 27 27 28 n.a
Total Asset Turnover 3.79 4.56 4.19 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 4.90 n.a
Current Liab. to Liab. 0.46 0.52 0.60 n.a
Liquidity Ratios
Net Working Capital ($577) ($6,805) $7,744 n.a
Interest Coverage -0.86 1.44 6.52 n.a
Additional Ratios
Assets to Sales 0.26 0.22 0.24 n.a
Current Debt/Total Assets 54% 61% 50% n.a
Acid Test 0.98 0.81 1.21 n.a
Sales/Net Worth 0.00 0.00 24.75 n.a
Dividend Payout 0.00 0.00 0.00 n.a