HodgePodge Sealcoating Company

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Construction Repair Business Plan

Financial Plan

The following sections will outline important financial information.

7.1 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

7.2 Break-even Analysis

The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $7,571
Assumptions:
Average Percent Variable Cost 10%
Estimated Monthly Fixed Cost $6,814

7.3 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 $59,680 $168,728 $182,599
Direct Cost of Sales $5,968 $16,873 $18,260
Other Production Expenses $0 $0 $0
Total Cost of Sales $5,968 $16,873 $18,260
Gross Margin $53,712 $151,855 $164,339
Gross Margin % 90.00% 90.00% 90.00%
Expenses
Payroll $62,880 $89,760 $89,760
Sales and Marketing and Other Expenses $700 $700 $700
Depreciation $2,160 $4,260 $4,260
Leased Equipment $0 $0 $0
Utilities $600 $600 $600
Insurance $1,200 $1,200 $1,200
Rent $4,800 $4,800 $4,800
Payroll Taxes $9,432 $13,464 $13,464
Other $0 $0 $0
Total Operating Expenses $81,772 $114,784 $114,784
Profit Before Interest and Taxes ($28,060) $37,071 $49,555
EBITDA ($25,900) $41,331 $53,815
Interest Expense ($65) ($180) ($270)
Taxes Incurred $0 $11,175 $14,948
Net Profit ($27,995) $26,076 $34,878
Net Profit/Sales -46.91% 15.45% 19.10%

7.4 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 $59,680 $168,728 $182,599
Subtotal Cash from Operations $59,680 $168,728 $182,599
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 $59,680 $168,728 $182,599
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $62,880 $89,760 $89,760
Bill Payments $21,678 $45,592 $53,285
Subtotal Spent on Operations $84,558 $135,352 $143,045
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $1,200 $1,200 $600
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 $10,500 $0
Dividends $0 $0 $0
Subtotal Cash Spent $85,758 $147,052 $143,645
Net Cash Flow ($26,078) $21,676 $38,954
Cash Balance $2,722 $24,398 $63,352

7.5 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 $2,722 $24,398 $63,352
Other Current Assets $0 $0 $0
Total Current Assets $2,722 $24,398 $63,352
Long-term Assets
Long-term Assets $10,800 $21,300 $21,300
Accumulated Depreciation $2,160 $6,420 $10,680
Total Long-term Assets $8,640 $14,880 $10,620
Total Assets $11,362 $39,278 $73,972
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $957 $3,997 $4,414
Current Borrowing ($1,200) ($2,400) ($3,000)
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities ($243) $1,597 $1,414
Long-term Liabilities $0 $0 $0
Total Liabilities ($243) $1,597 $1,414
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($400) ($28,395) ($2,319)
Earnings ($27,995) $26,076 $34,878
Total Capital $11,605 $37,681 $72,558
Total Liabilities and Capital $11,362 $39,278 $73,972
Net Worth $11,605 $37,681 $72,558

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 1771, Concrete work, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 182.72% 8.22% 7.50%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 29.80%
Total Current Assets 23.96% 62.12% 85.64% 67.00%
Long-term Assets 76.04% 37.88% 14.36% 33.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities -2.14% 4.07% 1.91% 43.50%
Long-term Liabilities 0.00% 0.00% 0.00% 14.10%
Total Liabilities -2.14% 4.07% 1.91% 57.60%
Net Worth 102.14% 95.93% 98.09% 42.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 90.00% 90.00% 90.00% 29.40%
Selling, General & Administrative Expenses 141.12% 74.62% 71.00% 15.50%
Advertising Expenses 1.21% 0.41% 0.38% 0.30%
Profit Before Interest and Taxes -47.02% 21.97% 27.14% 2.40%
Main Ratios
Current -11.20 15.28 44.81 1.55
Quick -11.20 15.28 44.81 1.17
Total Debt to Total Assets -2.14% 4.07% 1.91% 57.60%
Pre-tax Return on Net Worth -241.23% 98.86% 68.67% 6.50%
Pre-tax Return on Assets -246.39% 94.84% 67.36% 15.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -46.91% 15.45% 19.10% n.a
Return on Equity -241.23% 69.20% 48.07% n.a
Activity Ratios
Accounts Payable Turnover 23.65 12.17 12.17 n.a
Payment Days 27 19 29 n.a
Total Asset Turnover 5.25 4.30 2.47 n.a
Debt Ratios
Debt to Net Worth -0.02 0.04 0.02 n.a
Current Liab. to Liab. 0.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $2,965 $22,801 $61,938 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.19 0.23 0.41 n.a
Current Debt/Total Assets -2% 4% 2% n.a
Acid Test 0.00 15.28 44.81 n.a
Sales/Net Worth 5.14 4.48 2.52 n.a
Dividend Payout 0.00 0.00 0.00 n.a