Contemporary Ti Design

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Custom Jewelry Business Plan

Financial Plan

The following sections will outline the important financial information.

7.1 Important Assumptions

The following table highlights some of the important financial assumptions for Contemporary Ti Design.

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 following table and chart show our Break-even Analysis.

Break-even Analysis
Monthly Revenue Break-even $3,879
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $3,297

7.3 Projected Profit and Loss

The following table indicates projected profit and loss.

 

 

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $39,301 $62,419 $75,659
Direct Cost of Sales $5,895 $9,363 $11,349
Other $0 $0 $0
Total Cost of Sales $5,895 $9,363 $11,349
Gross Margin $33,406 $53,056 $64,310
Gross Margin % 85.00% 85.00% 85.00%
Expenses
Payroll $27,500 $32,400 $32,400
Sales and Marketing and Other Expenses $5,200 $1,200 $1,200
Depreciation $936 $936 $928
Leased Equipment $0 $0 $0
Utilities $600 $600 $600
Insurance $1,200 $1,200 $1,200
Rent $0 $0 $0
Payroll Taxes $4,125 $4,860 $4,860
Other $0 $0 $0
Total Operating Expenses $39,561 $41,196 $41,188
Profit Before Interest and Taxes ($6,155) $11,860 $23,122
EBITDA ($5,219) $12,796 $24,050
Interest Expense $0 $0 $0
Taxes Incurred $0 $2,965 $5,877
Net Profit ($6,155) $8,895 $17,245
Net Profit/Sales -15.66% 14.25% 22.79%

7.4 Projected Cash Flow

The following chart and table indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $13,755 $21,847 $26,481
Cash from Receivables $18,949 $36,692 $46,956
Subtotal Cash from Operations $32,705 $58,539 $73,437
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 $2,000 $0 $0
Subtotal Cash Received $34,705 $58,539 $73,437
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $27,500 $32,400 $32,400
Bill Payments $16,525 $20,725 $25,078
Subtotal Spent on Operations $44,025 $53,125 $57,478
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 $44,025 $53,125 $57,478
Net Cash Flow ($9,321) $5,414 $15,959
Cash Balance $3,429 $8,843 $24,802

7.5 Projected Balance Sheet

The following table indicates the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $3,429 $8,843 $24,802
Accounts Receivable $6,596 $10,477 $12,699
Inventory $1,105 $1,755 $2,127
Other Current Assets $0 $0 $0
Total Current Assets $11,131 $21,075 $39,628
Long-term Assets
Long-term Assets $2,800 $2,800 $2,800
Accumulated Depreciation $936 $1,872 $2,800
Total Long-term Assets $1,864 $928 $0
Total Assets $12,995 $22,003 $39,628
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $1,600 $1,713 $2,092
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,600 $1,713 $2,092
Long-term Liabilities $0 $0 $0
Total Liabilities $1,600 $1,713 $2,092
Paid-in Capital $19,000 $19,000 $19,000
Retained Earnings ($1,450) ($7,605) $1,290
Earnings ($6,155) $8,895 $17,245
Total Capital $11,395 $20,290 $37,535
Total Liabilities and Capital $12,995 $22,003 $39,628
Net Worth $11,395 $20,290 $37,535