Transitional Housing of Pittsburgh

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Emergency Shelters Business Plan

Financial Plan

The following sections outline important financial information.

8.1 Important Assumptions

The following table includes 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 0.00% 0.00% 0.00%
Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis is shown in the following table and chart.

Break-even Analysis
Monthly Revenue Break-even $17,643
Assumptions:
Average Percent Variable Cost 14%
Estimated Monthly Fixed Cost $15,118

8.3 Projected Surplus or Deficit

The following table and charts show projected surplus and deficit.

Surplus and Deficit
Year 1 Year 2 Year 3
Funding $304,000 $295,000 $307,000
Direct Cost $43,500 $41,625 $43,485
Other Costs of Funding $0 $0 $0
Total Direct Cost $43,500 $41,625 $43,485
Gross Surplus $260,500 $253,375 $263,515
Gross Surplus % 85.69% 85.89% 85.84%
Expenses
Payroll $82,800 $141,600 $147,600
Account Name $0 $0 $0
Depreciation $4,596 $4,596 $4,596
Leased Building $48,000 $48,000 $48,000
Utilities $24,000 $24,000 $24,000
Insurance $9,600 $9,600 $9,600
Payroll Taxes $12,420 $21,240 $22,140
Other $0 $0 $0
Total Operating Expenses $181,416 $249,036 $255,936
Surplus Before Interest and Taxes $79,084 $4,339 $7,579
EBITDA $83,680 $8,935 $12,175
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $0
Net Surplus $79,084 $4,339 $7,579
Net Surplus/Funding 26.01% 1.47% 2.47%

8.4 Projected Cash Flow

The following table and chart illustrate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Funding $304,000 $295,000 $307,000
Subtotal Cash from Operations $304,000 $295,000 $307,000
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 $304,000 $295,000 $307,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $82,800 $141,600 $147,600
Bill Payments $129,040 $141,071 $146,998
Subtotal Spent on Operations $211,840 $282,671 $294,598
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 $211,840 $282,671 $294,598
Net Cash Flow $92,160 $12,329 $12,402
Cash Balance $110,160 $122,489 $134,891

8.5 Projected Balance Sheet

The following table shows the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $110,160 $122,489 $134,891
Other Current Assets $23,000 $23,000 $23,000
Total Current Assets $133,160 $145,489 $157,891
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $4,596 $9,192 $13,788
Total Long-term Assets ($4,596) ($9,192) ($13,788)
Total Assets $128,564 $136,297 $144,103
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $8,480 $11,874 $12,101
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $8,480 $11,874 $12,101
Long-term Liabilities $0 $0 $0
Total Liabilities $8,480 $11,874 $12,101
Paid-in Capital $45,000 $45,000 $45,000
Accumulated Surplus/Deficit ($4,000) $75,084 $79,423
Surplus/Deficit $79,084 $4,339 $7,579
Total Capital $120,084 $124,423 $132,002
Total Liabilities and Capital $128,564 $136,297 $144,103
Net Worth $120,084 $124,423 $132,002

8.6 Standard Ratios

The following table presents standard ratios. Transitional Housing has a Standard Industrial Classification (SIC) code: 8322.0304 - Emergency Shelters. Industry profile ratios are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Funding Growth 0.00% -2.96% 4.07% 7.72%
Percent of Total Assets
Other Current Assets 17.89% 16.87% 15.96% 32.31%
Total Current Assets 103.57% 106.74% 109.57% 56.30%
Long-term Assets -3.57% -6.74% -9.57% 43.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.60% 8.71% 8.40% 23.57%
Long-term Liabilities 0.00% 0.00% 0.00% 28.65%
Total Liabilities 6.60% 8.71% 8.40% 52.22%
Net Worth 93.40% 91.29% 91.60% 47.78%
Percent of Funding
Funding 100.00% 100.00% 100.00% 100.00%
Gross Surplus 85.69% 85.89% 85.84% 100.00%
Selling, General & Administrative Expenses #NAME? 84.42% 83.37% 78.74%
Advertising Expenses 0.00% 0.00% 0.00% 0.97%
Surplus Before Interest and Taxes 26.01% 1.47% 2.47% 1.90%
Main Ratios
Current 15.70 12.25 13.05 2.18
Quick 15.70 12.25 13.05 1.77
Total Debt to Total Assets 6.60% 8.71% 8.40% 3.01%
Pre-tax Return on Net Worth 65.86% 3.49% 5.74% 58.63%
Pre-tax Return on Assets 61.51% 3.18% 5.26% 7.27%
Additional Ratios Year 1 Year 2 Year 3
Net Surplus Margin 26.01% 1.47% 2.47% n.a
Return on Equity 65.86% 3.49% 5.74% n.a
Activity Ratios
Accounts Payable Turnover 16.22 12.17 12.17 n.a
Payment Days 27 26 30 n.a
Total Asset Turnover 2.36 2.16 2.13 n.a
Debt Ratios
Debt to Net Worth 0.07 0.10 0.09 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $124,680 $133,615 $145,790 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Funding 0.42 0.46 0.47 n.a
Current Debt/Total Assets 7% 9% 8% n.a
Acid Test 15.70 12.25 13.05 n.a
Funding/Net Worth 2.53 2.37 2.33 n.a
Dividend Payout 0.00 0.00 0.00 n.a