Computer Programming Business Plan

Gaming Futures, LLC

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Financial Plan

The following is the financial plan for Gaming Futures. The various topic tables display annual figures for the first three years. Monthly figures for the first year are presented in the appendix.

7.1 Break-even Analysis

The following table and chart show our Break-even Analysis.

Break-even Analysis
Monthly Revenue Break-even $16,971
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $16,971

7.2 Projected Profit and Loss

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

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $279,000 $380,000 $644,000
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $279,000 $380,000 $644,000
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $135,000 $210,000 $370,000
Sales and Marketing and Other Expenses $12,000 $15,000 $20,000
Depreciation $9,996 $10,000 $10,000
Leased Equipment $0 $0 $0
Utilities $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $18,000 $18,000 $18,000
Payroll Taxes $20,250 $31,500 $55,500
Other $0 $0 $0
Total Operating Expenses $203,646 $292,900 $481,900
Profit Before Interest and Taxes $75,354 $87,100 $162,100
EBITDA $85,350 $97,100 $172,100
Interest Expense $8,960 $7,080 $5,080
Taxes Incurred $19,918 $24,006 $47,106
Net Profit $46,476 $56,014 $109,914
Net Profit/Sales 16.66% 14.74% 17.07%

7.3 Projected Cash Flow

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

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $69,750 $95,000 $161,000
Cash from Receivables $142,750 $260,927 $420,075
Subtotal Cash from Operations $212,500 $355,927 $581,075
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 $212,500 $355,927 $581,075
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $135,000 $210,000 $370,000
Bill Payments $73,476 $109,491 $149,968
Subtotal Spent on Operations $208,476 $319,491 $519,968
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 $19,200 $20,000 $20,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $227,676 $339,491 $539,968
Net Cash Flow ($15,176) $16,435 $41,107
Cash Balance $45,524 $61,959 $103,066

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 $45,524 $61,959 $103,066
Accounts Receivable $66,500 $90,573 $153,498
Other Current Assets $20,000 $20,000 $20,000
Total Current Assets $132,024 $172,533 $276,564
Long-term Assets
Long-term Assets $70,000 $70,000 $70,000
Accumulated Depreciation $9,996 $19,996 $29,996
Total Long-term Assets $60,004 $50,004 $40,004
Total Assets $192,028 $222,537 $316,568
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $14,052 $8,547 $12,665
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $14,052 $8,547 $12,665
Long-term Liabilities $80,800 $60,800 $40,800
Total Liabilities $94,852 $69,347 $53,465
Paid-in Capital $175,000 $175,000 $175,000
Retained Earnings ($124,300) ($77,824) ($21,810)
Earnings $46,476 $56,014 $109,914
Total Capital $97,176 $153,190 $263,104
Total Liabilities and Capital $192,028 $222,537 $316,568
Net Worth $97,176 $153,190 $263,104

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 7371, Computer Programming Services, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 36.20% 69.47% 10.40%
Percent of Total Assets
Accounts Receivable 34.63% 40.70% 48.49% 24.10%
Other Current Assets 10.42% 8.99% 6.32% 42.90%
Total Current Assets 68.75% 77.53% 87.36% 71.10%
Long-term Assets 31.25% 22.47% 12.64% 28.90%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.32% 3.84% 4.00% 47.80%
Long-term Liabilities 42.08% 27.32% 12.89% 19.10%
Total Liabilities 49.39% 31.16% 16.89% 66.90%
Net Worth 50.61% 68.84% 83.11% 33.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 83.34% 85.26% 82.93% 82.10%
Advertising Expenses 4.30% 3.95% 3.11% 1.20%
Profit Before Interest and Taxes 27.01% 22.92% 25.17% 2.00%
Main Ratios
Current 9.40 20.19 21.84 1.30
Quick 9.40 20.19 21.84 1.03
Total Debt to Total Assets 49.39% 31.16% 16.89% 66.90%
Pre-tax Return on Net Worth 68.32% 52.24% 59.68% 3.10%
Pre-tax Return on Assets 34.58% 35.96% 49.60% 9.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 16.66% 14.74% 17.07% n.a
Return on Equity 47.83% 36.57% 41.78% n.a
Activity Ratios
Accounts Receivable Turnover 3.15 3.15 3.15 n.a
Collection Days 55 101 92 n.a
Accounts Payable Turnover 6.23 12.17 12.17 n.a
Payment Days 27 40 25 n.a
Total Asset Turnover 1.45 1.71 2.03 n.a
Debt Ratios
Debt to Net Worth 0.98 0.45 0.20 n.a
Current Liab. to Liab. 0.15 0.12 0.24 n.a
Liquidity Ratios
Net Working Capital $117,972 $163,986 $263,900 n.a
Interest Coverage 8.41 12.30 31.91 n.a
Additional Ratios
Assets to Sales 0.69 0.59 0.49 n.a
Current Debt/Total Assets 7% 4% 4% n.a
Acid Test 4.66 9.59 9.72 n.a
Sales/Net Worth 2.87 2.48 2.45 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Break-even Analysis
Monthly Revenue Break-even $16,971
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $16,971
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $279,000 $380,000 $644,000
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $279,000 $380,000 $644,000
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $135,000 $210,000 $370,000
Sales and Marketing and Other Expenses $12,000 $15,000 $20,000
Depreciation $9,996 $10,000 $10,000
Leased Equipment $0 $0 $0
Utilities $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $18,000 $18,000 $18,000
Payroll Taxes $20,250 $31,500 $55,500
Other $0 $0 $0
Total Operating Expenses $203,646 $292,900 $481,900
Profit Before Interest and Taxes $75,354 $87,100 $162,100
EBITDA $85,350 $97,100 $172,100
Interest Expense $8,960 $7,080 $5,080
Taxes Incurred $19,918 $24,006 $47,106
Net Profit $46,476 $56,014 $109,914
Net Profit/Sales 16.66% 14.74% 17.07%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $69,750 $95,000 $161,000
Cash from Receivables $142,750 $260,927 $420,075
Subtotal Cash from Operations $212,500 $355,927 $581,075
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 $212,500 $355,927 $581,075
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $135,000 $210,000 $370,000
Bill Payments $73,476 $109,491 $149,968
Subtotal Spent on Operations $208,476 $319,491 $519,968
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 $19,200 $20,000 $20,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $227,676 $339,491 $539,968
Net Cash Flow ($15,176) $16,435 $41,107
Cash Balance $45,524 $61,959 $103,066
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $45,524 $61,959 $103,066
Accounts Receivable $66,500 $90,573 $153,498
Other Current Assets $20,000 $20,000 $20,000
Total Current Assets $132,024 $172,533 $276,564
Long-term Assets
Long-term Assets $70,000 $70,000 $70,000
Accumulated Depreciation $9,996 $19,996 $29,996
Total Long-term Assets $60,004 $50,004 $40,004
Total Assets $192,028 $222,537 $316,568
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $14,052 $8,547 $12,665
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $14,052 $8,547 $12,665
Long-term Liabilities $80,800 $60,800 $40,800
Total Liabilities $94,852 $69,347 $53,465
Paid-in Capital $175,000 $175,000 $175,000
Retained Earnings ($124,300) ($77,824) ($21,810)
Earnings $46,476 $56,014 $109,914
Total Capital $97,176 $153,190 $263,104
Total Liabilities and Capital $192,028 $222,537 $316,568
Net Worth $97,176 $153,190 $263,104
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 36.20% 69.47% 10.40%
Percent of Total Assets
Accounts Receivable 34.63% 40.70% 48.49% 24.10%
Other Current Assets 10.42% 8.99% 6.32% 42.90%
Total Current Assets 68.75% 77.53% 87.36% 71.10%
Long-term Assets 31.25% 22.47% 12.64% 28.90%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.32% 3.84% 4.00% 47.80%
Long-term Liabilities 42.08% 27.32% 12.89% 19.10%
Total Liabilities 49.39% 31.16% 16.89% 66.90%
Net Worth 50.61% 68.84% 83.11% 33.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 83.34% 85.26% 82.93% 82.10%
Advertising Expenses 4.30% 3.95% 3.11% 1.20%
Profit Before Interest and Taxes 27.01% 22.92% 25.17% 2.00%
Main Ratios
Current 9.40 20.19 21.84 1.30
Quick 9.40 20.19 21.84 1.03
Total Debt to Total Assets 49.39% 31.16% 16.89% 66.90%
Pre-tax Return on Net Worth 68.32% 52.24% 59.68% 3.10%
Pre-tax Return on Assets 34.58% 35.96% 49.60% 9.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 16.66% 14.74% 17.07% n.a
Return on Equity 47.83% 36.57% 41.78% n.a
Activity Ratios
Accounts Receivable Turnover 3.15 3.15 3.15 n.a
Collection Days 55 101 92 n.a
Accounts Payable Turnover 6.23 12.17 12.17 n.a
Payment Days 27 40 25 n.a
Total Asset Turnover 1.45 1.71 2.03 n.a
Debt Ratios
Debt to Net Worth 0.98 0.45 0.20 n.a
Current Liab. to Liab. 0.15 0.12 0.24 n.a
Liquidity Ratios
Net Working Capital $117,972 $163,986 $263,900 n.a
Interest Coverage 8.41 12.30 31.91 n.a
Additional Ratios
Assets to Sales 0.69 0.59 0.49 n.a
Current Debt/Total Assets 7% 4% 4% n.a
Acid Test 4.66 9.59 9.72 n.a
Sales/Net Worth 2.87 2.48 2.45 n.a
Dividend Payout 0.00 0.00 0.00 n.a