Aztec Food Imports

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Ethnic Food Import Business Plan

Financial Plan

The following sections outline conservative estimates of the financial performance of Aztec Food Imports.

7.1 Break-even Analysis

The monthly break-even point is $26,514.

Break-even Analysis
Monthly Revenue Break-even $26,514
Assumptions:
Average Percent Variable Cost 31%
Estimated Monthly Fixed Cost $18,230

7.2 Projected Profit and Loss

The following table and charts will highlight the next three years.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $333,500 $420,000 $510,000
Direct Cost of Sales $104,200 $133,000 $154,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $104,200 $133,000 $154,000
Gross Margin $229,300 $287,000 $356,000
Gross Margin % 68.76% 68.33% 69.80%
Expenses
Payroll $151,200 $178,000 $198,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $2,880 $2,880 $2,880
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $0 $0 $0
Rent $36,000 $36,000 $36,000
Payroll Taxes $22,680 $26,700 $29,700
Other $0 $0 $0
Total Operating Expenses $218,760 $249,580 $272,580
Profit Before Interest and Taxes $10,540 $37,420 $83,420
EBITDA $13,420 $40,300 $86,300
Interest Expense $9,233 $7,876 $6,460
Taxes Incurred $392 $8,863 $23,088
Net Profit $915 $20,681 $53,872
Net Profit/Sales 0.27% 4.92% 10.56%

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 $83,375 $105,000 $127,500
Cash from Receivables $194,775 $300,644 $367,563
Subtotal Cash from Operations $278,150 $405,644 $495,063
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 $278,150 $405,644 $495,063
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $151,200 $178,000 $198,000
Bill Payments $110,267 $228,719 $255,535
Subtotal Spent on Operations $261,467 $406,719 $453,535
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 $275,627 $420,879 $467,695
Net Cash Flow $2,523 ($15,235) $27,368
Cash Balance $107,223 $91,987 $119,355

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 $107,223 $91,987 $119,355
Accounts Receivable $55,350 $69,706 $84,643
Inventory $15,950 $20,358 $23,573
Other Current Assets $0 $0 $0
Total Current Assets $178,523 $182,052 $227,571
Long-term Assets
Long-term Assets $20,000 $20,000 $20,000
Accumulated Depreciation $2,880 $5,760 $8,640
Total Long-term Assets $17,120 $14,240 $11,360
Total Assets $195,643 $196,292 $238,931
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $24,188 $18,316 $21,243
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $24,188 $18,316 $21,243
Long-term Liabilities $85,840 $71,680 $57,520
Total Liabilities $110,028 $89,996 $78,763
Paid-in Capital $100,000 $100,000 $100,000
Retained Earnings ($15,300) ($14,385) $6,296
Earnings $915 $20,681 $53,872
Total Capital $85,615 $106,296 $160,168
Total Liabilities and Capital $195,643 $196,292 $238,931
Net Worth $85,615 $106,296 $160,168

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 5149, Groceries and Related Products, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 25.94% 21.43% 4.60%
Percent of Total Assets
Accounts Receivable 28.29% 35.51% 35.43% 33.30%
Inventory 8.15% 10.37% 9.87% 26.00%
Other Current Assets 0.00% 0.00% 0.00% 20.90%
Total Current Assets 91.25% 92.75% 95.25% 80.20%
Long-term Assets 8.75% 7.25% 4.75% 19.80%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 12.36% 9.33% 8.89% 45.20%
Long-term Liabilities 43.88% 36.52% 24.07% 10.00%
Total Liabilities 56.24% 45.85% 32.96% 55.20%
Net Worth 43.76% 54.15% 67.04% 44.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 68.76% 68.33% 69.80% 44.10%
Selling, General & Administrative Expenses 68.48% 63.41% 59.24% 26.70%
Advertising Expenses 0.00% 0.00% 0.00% 0.70%
Profit Before Interest and Taxes 3.16% 8.91% 16.36% 0.80%
Main Ratios
Current 7.38 9.94 10.71 1.69
Quick 6.72 8.83 9.60 1.01
Total Debt to Total Assets 56.24% 45.85% 32.96% 55.20%
Pre-tax Return on Net Worth 1.53% 27.79% 48.05% 3.60%
Pre-tax Return on Assets 0.67% 15.05% 32.21% 8.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 0.27% 4.92% 10.56% n.a
Return on Equity 1.07% 19.46% 33.63% n.a
Activity Ratios
Accounts Receivable Turnover 4.52 4.52 4.52 n.a
Collection Days 56 72 74 n.a
Inventory Turnover 3.83 7.33 7.01 n.a
Accounts Payable Turnover 5.56 12.17 12.17 n.a
Payment Days 27 35 28 n.a
Total Asset Turnover 1.70 2.14 2.13 n.a
Debt Ratios
Debt to Net Worth 1.29 0.85 0.49 n.a
Current Liab. to Liab. 0.22 0.20 0.27 n.a
Liquidity Ratios
Net Working Capital $154,335 $163,736 $206,328 n.a
Interest Coverage 1.14 4.75 12.91 n.a
Additional Ratios
Assets to Sales 0.59 0.47 0.47 n.a
Current Debt/Total Assets 12% 9% 9% n.a
Acid Test 4.43 5.02 5.62 n.a
Sales/Net Worth 3.90 3.95 3.18 n.a
Dividend Payout 0.00 0.00 0.00 n.a