The Bronx Deli and Bakery

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Delicatessen and Bakery Business Plan

Financial Plan

The following is the Financial plan for the Bronx Deli and Bakery.

7.1 Break-even Analysis

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

Break-even Analysis
Monthly Revenue Break-even $32,365
Assumptions:
Average Percent Variable Cost 29%
Estimated Monthly Fixed Cost $23,068

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 $422,500 $469,000 $522,000
Direct Cost of Sales $121,360 $130,400 $145,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $121,360 $130,400 $145,000
Gross Margin $301,140 $338,600 $377,000
Gross Margin % 71.28% 72.20% 72.22%
Expenses
Payroll $205,200 $217,000 $230,000
Sales and Marketing and Other Expenses $7,000 $10,000 $13,000
Depreciation $1,440 $1,440 $1,440
Leased Equipment $0 $0 $0
Utilities $4,800 $4,800 $4,800
Insurance $6,000 $6,000 $6,000
Rent $21,600 $21,600 $21,600
Payroll Taxes $30,780 $32,550 $34,500
Other $0 $0 $0
Total Operating Expenses $276,820 $293,390 $311,340
Profit Before Interest and Taxes $24,320 $45,210 $65,660
EBITDA $25,760 $46,650 $67,100
Interest Expense $4,459 $3,501 $2,501
Taxes Incurred $5,958 $12,513 $18,948
Net Profit $13,903 $29,197 $44,211
Net Profit/Sales 3.29% 6.23% 8.47%

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 $422,500 $469,000 $522,000
Subtotal Cash from Operations $422,500 $469,000 $522,000
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 $422,500 $469,000 $522,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $205,200 $217,000 $230,000
Bill Payments $189,370 $226,386 $246,000
Subtotal Spent on Operations $394,570 $443,386 $476,000
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 $9,996 $9,996 $9,996
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $404,566 $453,382 $485,996
Net Cash Flow $17,934 $15,618 $36,004
Cash Balance $81,134 $96,752 $132,756

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 $81,134 $96,752 $132,756
Inventory $14,630 $15,720 $17,480
Other Current Assets $0 $0 $0
Total Current Assets $95,764 $112,471 $150,235
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $1,440 $2,880 $4,320
Total Long-term Assets $48,560 $47,120 $45,680
Total Assets $144,324 $159,591 $195,915
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $22,217 $18,284 $20,392
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $22,217 $18,284 $20,392
Long-term Liabilities $40,004 $30,008 $20,012
Total Liabilities $62,221 $48,292 $40,404
Paid-in Capital $80,000 $80,000 $80,000
Retained Earnings ($11,800) $2,103 $31,300
Earnings $13,903 $29,197 $44,211
Total Capital $82,103 $111,300 $155,511
Total Liabilities and Capital $144,324 $159,591 $195,915
Net Worth $82,103 $111,300 $155,511

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 5812, Eating Places, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 11.01% 11.30% 7.60%
Percent of Total Assets
Inventory 10.14% 9.85% 8.92% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 66.35% 70.47% 76.68% 43.70%
Long-term Assets 33.65% 29.53% 23.32% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 15.39% 11.46% 10.41% 32.70%
Long-term Liabilities 27.72% 18.80% 10.21% 28.50%
Total Liabilities 43.11% 30.26% 20.62% 61.20%
Net Worth 56.89% 69.74% 79.38% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 71.28% 72.20% 72.22% 60.50%
Selling, General & Administrative Expenses 67.99% 65.97% 63.75% 39.80%
Advertising Expenses 1.66% 2.13% 2.49% 3.20%
Profit Before Interest and Taxes 5.76% 9.64% 12.58% 0.70%
Main Ratios
Current 4.31 6.15 7.37 0.98
Quick 3.65 5.29 6.51 0.65
Total Debt to Total Assets 43.11% 30.26% 20.62% 61.20%
Pre-tax Return on Net Worth 24.19% 37.47% 40.61% 1.70%
Pre-tax Return on Assets 13.76% 26.14% 32.24% 4.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 3.29% 6.23% 8.47% n.a
Return on Equity 16.93% 26.23% 28.43% n.a
Activity Ratios
Inventory Turnover 10.91 8.59 8.74 n.a
Accounts Payable Turnover 9.52 12.17 12.17 n.a
Payment Days 27 33 28 n.a
Total Asset Turnover 2.93 2.94 2.66 n.a
Debt Ratios
Debt to Net Worth 0.76 0.43 0.26 n.a
Current Liab. to Liab. 0.36 0.38 0.50 n.a
Liquidity Ratios
Net Working Capital $73,547 $94,188 $129,843 n.a
Interest Coverage 5.45 12.91 26.25 n.a
Additional Ratios
Assets to Sales 0.34 0.34 0.38 n.a
Current Debt/Total Assets 15% 11% 10% n.a
Acid Test 3.65 5.29 6.51 n.a
Sales/Net Worth 5.15 4.21 3.36 n.a
Dividend Payout 0.00 0.00 0.00 n.a