TTR Data Recovery

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Data Recovery Services Business Plan

Financial Plan

The following is the financial plan for TTR Data Recovery Technologies.

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

7.1 Break-even Analysis

The monthly break-even point is shown below.

Break-even Analysis
Monthly Revenue Break-even $26,440
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $26,440

7.2 Projected Profit and Loss

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

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $368,000 $448,000 $528,000
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $368,000 $448,000 $528,000
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $216,000 $234,000 $252,000
Sales and Marketing and Other Expenses $18,000 $36,000 $46,000
Depreciation $2,880 $2,880 $2,880
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $6,000 $6,000 $6,000
Rent $36,000 $36,000 $36,000
Payroll Taxes $32,400 $35,100 $37,800
Other $0 $0 $0
Total Operating Expenses $317,280 $355,980 $386,680
Profit Before Interest and Taxes $50,720 $92,020 $141,320
EBITDA $53,600 $94,900 $144,200
Interest Expense $9,233 $7,876 $6,460
Taxes Incurred $12,446 $25,243 $40,458
Net Profit $29,041 $58,901 $94,402
Net Profit/Sales 7.89% 13.15% 17.88%

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 $92,000 $112,000 $132,000
Cash from Receivables $219,200 $323,652 $383,652
Subtotal Cash from Operations $311,200 $435,652 $515,652
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 $311,200 $435,652 $515,652
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $216,000 $234,000 $252,000
Bill Payments $108,026 $151,761 $176,540
Subtotal Spent on Operations $324,026 $385,761 $428,540
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 $14,160 $14,160 $14,160
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $338,186 $399,921 $442,700
Net Cash Flow ($26,986) $35,731 $72,952
Cash Balance $135,214 $170,945 $243,897

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 $135,214 $170,945 $243,897
Accounts Receivable $56,800 $69,148 $81,496
Other Current Assets $0 $0 $0
Total Current Assets $192,014 $240,093 $325,393
Long-term Assets
Long-term Assets $100,000 $100,000 $100,000
Accumulated Depreciation $2,880 $5,760 $8,640
Total Long-term Assets $97,120 $94,240 $91,360
Total Assets $289,134 $334,333 $416,753
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $12,053 $12,511 $14,689
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $12,053 $12,511 $14,689
Long-term Liabilities $85,840 $71,680 $57,520
Total Liabilities $97,893 $84,191 $72,209
Paid-in Capital $250,000 $250,000 $250,000
Retained Earnings ($87,800) ($58,759) $142
Earnings $29,041 $58,901 $94,402
Total Capital $191,241 $250,142 $344,544
Total Liabilities and Capital $289,134 $334,333 $416,753
Net Worth $191,241 $250,142 $344,544

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 7379, Computer Related Services, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 21.74% 17.86% 7.20%
Percent of Total Assets
Accounts Receivable 19.64% 20.68% 19.55% 21.70%
Other Current Assets 0.00% 0.00% 0.00% 46.70%
Total Current Assets 66.41% 71.81% 78.08% 71.90%
Long-term Assets 33.59% 28.19% 21.92% 28.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.17% 3.74% 3.52% 51.40%
Long-term Liabilities 29.69% 21.44% 13.80% 19.10%
Total Liabilities 33.86% 25.18% 17.33% 70.50%
Net Worth 66.14% 74.82% 82.67% 29.50%
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 92.11% 86.85% 82.12% 80.70%
Advertising Expenses 3.26% 6.70% 7.58% 1.20%
Profit Before Interest and Taxes 13.78% 20.54% 26.77% 1.70%
Main Ratios
Current 15.93 19.19 22.15 1.27
Quick 15.93 19.19 22.15 1.01
Total Debt to Total Assets 33.86% 25.18% 17.33% 70.50%
Pre-tax Return on Net Worth 21.69% 33.64% 39.14% 3.50%
Pre-tax Return on Assets 14.35% 25.17% 32.36% 11.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.89% 13.15% 17.88% n.a
Return on Equity 15.19% 23.55% 27.40% n.a
Activity Ratios
Accounts Receivable Turnover 4.86 4.86 4.86 n.a
Collection Days 57 68 69 n.a
Accounts Payable Turnover 9.96 12.17 12.17 n.a
Payment Days 27 29 28 n.a
Total Asset Turnover 1.27 1.34 1.27 n.a
Debt Ratios
Debt to Net Worth 0.51 0.34 0.21 n.a
Current Liab. to Liab. 0.12 0.15 0.20 n.a
Liquidity Ratios
Net Working Capital $179,961 $227,582 $310,704 n.a
Interest Coverage 5.49 11.68 21.88 n.a
Additional Ratios
Assets to Sales 0.79 0.75 0.79 n.a
Current Debt/Total Assets 4% 4% 4% n.a
Acid Test 11.22 13.66 16.60 n.a
Sales/Net Worth 1.92 1.79 1.53 n.a
Dividend Payout 0.00 0.00 0.00 n.a