Nature's Candy

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E-commerce Retailer Business Plan

Financial Plan

The following sections will outline important financial information.

8.1 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

8.2 Break-even Analysis

The Break-even Analysis indicates that $24,248 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $24,248
Assumptions:
Average Percent Variable Cost 30%
Estimated Monthly Fixed Cost $16,974

8.3 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 $189,397 $412,314 $456,226
Direct Cost of Sales $56,819 $123,694 $136,868
Other Production Expenses $0 $0 $0
Total Cost of Sales $56,819 $123,694 $136,868
Gross Margin $132,578 $288,620 $319,358
Gross Margin % 70.00% 70.00% 70.00%
Expenses
Payroll $157,000 $174,000 $190,000
Sales and Marketing and Other Expenses $10,800 $9,200 $7,200
Depreciation $636 $636 $636
Leased Equipment $0 $0 $0
Utilities $1,800 $1,800 $1,800
Insurance $1,500 $1,500 $1,500
Rent $8,400 $8,400 $8,400
Payroll Taxes $23,550 $26,100 $28,500
Other $0 $0 $0
Total Operating Expenses $203,686 $221,636 $238,036
Profit Before Interest and Taxes ($71,108) $66,984 $81,322
EBITDA ($70,472) $67,620 $81,958
Interest Expense $0 $0 $0
Taxes Incurred $0 $20,095 $24,397
Net Profit ($71,108) $46,889 $56,925
Net Profit/Sales -37.54% 11.37% 12.48%

8.4 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 $189,397 $412,314 $456,226
Subtotal Cash from Operations $189,397 $412,314 $456,226
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 $189,397 $412,314 $456,226
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $157,000 $174,000 $190,000
Bill Payments $90,905 $187,072 $207,195
Subtotal Spent on Operations $247,905 $361,072 $397,195
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 $247,905 $361,072 $397,195
Net Cash Flow ($58,508) $51,242 $59,030
Cash Balance $7,092 $58,334 $117,364

8.5 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 $7,092 $58,334 $117,364
Other Current Assets $0 $0 $0
Total Current Assets $7,092 $58,334 $117,364
Long-term Assets
Long-term Assets $3,200 $3,200 $3,200
Accumulated Depreciation $636 $1,272 $1,908
Total Long-term Assets $2,564 $1,928 $1,292
Total Assets $9,656 $60,262 $118,656
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $11,964 $15,681 $17,150
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $11,964 $15,681 $17,150
Long-term Liabilities $0 $0 $0
Total Liabilities $11,964 $15,681 $17,150
Paid-in Capital $80,000 $80,000 $80,000
Retained Earnings ($11,200) ($82,308) ($35,419)
Earnings ($71,108) $46,889 $56,925
Total Capital ($2,308) $44,581 $101,506
Total Liabilities and Capital $9,656 $60,262 $118,656
Net Worth ($2,308) $44,581 $101,506

8.6 Business Ratios

The following table compares key ratios for our industry category, SIC 5961, Electronic Shopping.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 117.70% 10.65% 7.56%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 27.99%
Total Current Assets 73.45% 96.80% 98.91% 77.31%
Long-term Assets 26.55% 3.20% 1.09% 22.69%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 123.90% 26.02% 14.45% 38.85%
Long-term Liabilities 0.00% 0.00% 0.00% 18.29%
Total Liabilities 123.90% 26.02% 14.45% 57.14%
Net Worth -23.90% 73.98% 85.55% 42.86%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 70.00% 70.00% 70.00% 26.42%
Selling, General & Administrative Expenses 107.54% 58.63% 57.52% 12.12%
Advertising Expenses 5.07% 1.94% 1.32% 2.29%
Profit Before Interest and Taxes -37.54% 16.25% 17.82% 0.78%
Main Ratios
Current 0.59 3.72 6.84 1.78
Quick 0.59 3.72 6.84 0.63
Total Debt to Total Assets 123.90% 26.02% 14.45% 62.52%
Pre-tax Return on Net Worth 3080.94% 150.25% 80.12% 2.07%
Pre-tax Return on Assets -736.41% 111.15% 68.54% 5.53%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -37.54% 11.37% 12.48% n.a
Return on Equity 0.00% 105.18% 56.08% n.a
Activity Ratios
Accounts Payable Turnover 8.60 12.17 12.17 n.a
Payment Days 27 26 29 n.a
Total Asset Turnover 19.61 6.84 3.84 n.a
Debt Ratios
Debt to Net Worth 0.00 0.35 0.17 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital ($4,872) $42,653 $100,214 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.05 0.15 0.26 n.a
Current Debt/Total Assets 124% 26% 14% n.a
Acid Test 0.59 3.72 6.84 n.a
Sales/Net Worth 0.00 9.25 4.49 n.a
Dividend Payout 0.00 0.00 0.00 n.a