ReHabiliments' Financial Plan has the potential of providing expansion of the business, paving the way for new investments or loans, or changing the way in which the company conducts business.
ReHabiliments' financial objectives are:
Financial projections are based upon sales volume at the levels detailed in the sales forecast and represent, to the best of management's knowledge and belief, the company's expected assets, liabilities, capital, revenues, and expenses. Furthermore, these projections reflect management's judgment of the expected conditions and the company's expected course of action, given the financial assumptions.
The following chart shows some key benchmarks for the business. We anticipate gross margin remaining relatively steady, despite increasing sales, because of our commitment to secure raw materials from ethically sound producers.
The company's break-even analysis is based on the first year of operation, from April 1, 2004 through March 31, 2005.
ReHabiliments' estimated fixed costs include, but are not limited to, the following items:
Average percent variable cost takes into consideration variable costs of inventory that will fluctuate with the products provided to the customer.
The Projected Cash Flow table represents ReHabiliments' cash flow for the next four years (e.g., 2004, 2005, 2006, and 2007). The related bar chart illustrates monthly cash flow in the first year, with one bar representing cash flow per month and the other representing the monthly balance. Annual cash flow figures are included in the Projected Cash Flow table, with monthly cash flow projections included in the appendices.
ReHabiliments is in its early stages of development. Therefore, initial projections are based upon industry statistics, demographics in the Tri-State Area, and on the most important market segments believed to drive the income statement. As the company matures and gains operational history, management will track planned versus actual financial figures.
The following table and associated charts illustrate ReHabiliments' projected profit and loss. Monthly projections are included in the appendices.
ReHabiliments' main assumptions and projected forecasts are based upon similar products and on the operational history of its competitors. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
The more important underlying assumptions are:
All assumptions made about the company's market are supported by industry standards, relevant market research, market trends, surveys, and personal interviews.
The Projected Balance Sheet shows healthy growth of ReHabiliments' net worth and strong financial position. Monthly projections are included in the appendices.
Standard business ratios for ReHabiliments are included in the following table, along with ratios for the Women's and Children's Clothing Industry (SIC Code 5137) for comparison. ReHabiliments differs from these industry standard ratios in a number of ways, since no industry code exactly matches our business type.
These ratios show a plan for balanced, healthy growth. One of the more important indicators is the increase in working capital, which is critical to the growth and financial health of the company. Although there are significant differences between ReHabiliments' ratios and the standard industry ratios, these differences reflect our mixed business type. We manufacture, distribute (wholesale) and sell our products directly to consumers (retail). Our asset structure, in particular, reflects that of a manufacturer rather than a retailer or distributor, since we need both inventory (raw materials) and production equipment.