Noah's Arf

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Dog and Cat Kennel Business Plan

Financial Plan

The following is Noah's Arf's financial plan.

7.1 Important Assumptions

The following table summarizes key financial assumptions, including payment for services in cash or credit card. We assume fast-growth and large demands in this new specialized service.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 0.00% 0.00% 0.00%
Long-term Interest Rate 9.00% 9.00% 9.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

The benchmark comparison chart highlights our ambitious plan. We feel this is a new fast growing service offered to the community. The opportunity to expand services is endless.

7.3 Break-even Analysis

For our break-even analysis, we assume monthly costs which include our full payroll, rent, and utilities, and an estimation of other running expenses.

Break-even Analysis
Monthly Revenue Break-even $13,340
Assumptions:
Average Percent Variable Cost 4%
Estimated Monthly Fixed Cost $12,781

7.4 Projected Profit and Loss

Month-by-month forecasts for profit and loss are included in the appendix.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $318,410 $307,376 $355,338
Direct Cost of Sales $13,335 $17,005 $19,670
Production Payroll $34,200 $102,768 $106,176
Other $0 $0 $0
Total Cost of Sales $47,535 $119,773 $125,846
Gross Margin $270,875 $187,603 $229,492
Gross Margin % 85.07% 61.03% 64.58%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $0 $0 $0
Advertising/Promotion $2,700 $5,500 $7,000
Travel $0 $0 $0
Miscellaneous $600 $1,000 $1,000
Total Sales and Marketing Expenses $3,300 $6,500 $8,000
Sales and Marketing % 1.04% 2.11% 2.25%
General and Administrative Expenses
General and Administrative Payroll $52,560 $60,672 $61,344
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $12,000 $12,000 $12,000
vehicle maintence $1,200 $1,500 $1,700
Utilities $14,400 $15,000 $15,500
Insurance $12,000 $13,000 $14,000
Taxes $6,000 $7,000 $8,000
Rent $38,500 $3,600 $3,800
Payroll Taxes $10,411 $19,613 $20,102
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $147,071 $132,385 $136,446
General and Administrative % 46.19% 43.07% 38.40%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Contract/Consultants $3,000 $4,000 $5,000
Total Other Expenses $3,000 $4,000 $5,000
Other % 0.94% 1.30% 1.41%
Total Operating Expenses $153,371 $142,885 $149,446
Profit Before Interest and Taxes $117,504 $44,718 $80,046
EBITDA $129,504 $56,718 $92,046
Interest Expense $8,210 $6,630 $5,050
Taxes Incurred $26,884 $9,522 $19,061
Net Profit $82,410 $28,566 $55,934
Net Profit/Sales 25.88% 9.29% 15.74%

7.5 Projected Cash Flow

The following chart and table show the project cash flow for Noah's Arf.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $318,410 $307,376 $355,338
Subtotal Cash from Operations $318,410 $307,376 $355,338
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 $318,410 $307,376 $355,338
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $86,760 $163,440 $167,520
Bill Payments $121,390 $109,197 $118,933
Subtotal Spent on Operations $208,150 $272,637 $286,453
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 $17,556 $17,556 $17,556
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $225,706 $290,193 $304,009
Net Cash Flow $92,704 $17,183 $51,329
Cash Balance $131,704 $148,887 $200,216

7.6 Projected Balance Sheet

The Projected Balance Sheet is quite solid. We do not project any real trouble meeting our debt obligations--as long as we can achieve our specific objectives.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $131,704 $148,887 $200,216
Inventory $1,974 $2,517 $2,912
Other Current Assets $0 $0 $0
Total Current Assets $133,678 $151,405 $203,128
Long-term Assets
Long-term Assets $100,000 $100,000 $100,000
Accumulated Depreciation $12,000 $24,000 $36,000
Total Long-term Assets $88,000 $76,000 $64,000
Total Assets $221,678 $227,405 $267,128
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $13,824 $8,541 $9,886
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $13,824 $8,541 $9,886
Long-term Liabilities $82,444 $64,888 $47,332
Total Liabilities $96,268 $73,429 $57,218
Paid-in Capital $70,000 $70,000 $70,000
Retained Earnings ($27,000) $55,410 $83,976
Earnings $82,410 $28,566 $55,934
Total Capital $125,410 $153,976 $209,910
Total Liabilities and Capital $221,678 $227,405 $267,128
Net Worth $125,410 $153,976 $209,910

7.7 Business Ratios

The table follows with our main business ratios. We intend to improve gross margins and inventory turnover. Industry profile ratios based on the Standard Industrial Classification (SIC) code 0752, Animal Specialty Services, nec., are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% -3.47% 15.60% -2.90%
Percent of Total Assets
Inventory 0.89% 1.11% 1.09% 8.20%
Other Current Assets 0.00% 0.00% 0.00% 31.90%
Total Current Assets 60.30% 66.58% 76.04% 55.90%
Long-term Assets 39.70% 33.42% 23.96% 44.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.24% 3.76% 3.70% 32.70%
Long-term Liabilities 37.19% 28.53% 17.72% 19.90%
Total Liabilities 43.43% 32.29% 21.42% 52.60%
Net Worth 56.57% 67.71% 78.58% 47.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.07% 61.03% 64.58% 42.50%
Selling, General & Administrative Expenses 59.33% 51.74% 48.76% 26.40%
Advertising Expenses 0.85% 1.79% 1.97% 0.50%
Profit Before Interest and Taxes 36.90% 14.55% 22.53% 2.40%
Main Ratios
Current 9.67 17.73 20.55 2.19
Quick 9.53 17.43 20.25 1.48
Total Debt to Total Assets 43.43% 32.29% 21.42% 52.60%
Pre-tax Return on Net Worth 87.15% 24.74% 35.73% 4.50%
Pre-tax Return on Assets 49.30% 16.75% 28.07% 9.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 25.88% 9.29% 15.74% n.a
Return on Equity 65.71% 18.55% 26.65% n.a
Activity Ratios
Inventory Turnover 6.20 7.57 7.25 n.a
Accounts Payable Turnover 9.78 12.17 12.17 n.a
Payment Days 27 39 28 n.a
Total Asset Turnover 1.44 1.35 1.33 n.a
Debt Ratios
Debt to Net Worth 0.77 0.48 0.27 n.a
Current Liab. to Liab. 0.14 0.12 0.17 n.a
Liquidity Ratios
Net Working Capital $119,854 $142,864 $193,242 n.a
Interest Coverage 14.31 6.74 15.85 n.a
Additional Ratios
Assets to Sales 0.70 0.74 0.75 n.a
Current Debt/Total Assets 6% 4% 4% n.a
Acid Test 9.53 17.43 20.25 n.a
Sales/Net Worth 2.54 2.00 1.69 n.a
Dividend Payout 0.00 0.00 0.00 n.a