Financial Services Business Plan

Green Investments

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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 is shown in the following table and chart.

Break-even Analysis
Monthly Revenue Break-even $15,225
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $12,941

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 $77,635 $230,298 $261,991
Direct Cost of Sales $11,645 $34,545 $39,299
Other Costs of Sales $0 $0 $0
Total Cost of Sales $11,645 $34,545 $39,299
Gross Margin $65,990 $195,753 $222,692
Gross Margin % 85.00% 85.00% 85.00%
Expenses
Payroll $120,250 $152,000 $152,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $3,804 $317 $317
Rent $7,800 $7,800 $7,800
Utilities $1,800 $1,800 $1,800
Insurance $1,800 $1,800 $1,800
Payroll Taxes $18,038 $22,800 $22,800
Other $1,800 $1,800 $1,800
Total Operating Expenses $155,292 $188,317 $188,317
Profit Before Interest and Taxes ($89,301) $7,436 $34,375
EBITDA ($85,497) $7,753 $34,692
Interest Expense $73 $220 $120
Taxes Incurred $0 $2,165 $10,277
Net Profit ($89,374) $5,051 $23,979
Net Profit/Sales -115.12% 2.19% 9.15%

8.4 Projected Cash Flow

The following table and chart will indicate Projected Cash Flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $77,635 $230,298 $261,991
Subtotal Cash from Operations $77,635 $230,298 $261,991
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $3,000 $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 $80,635 $230,298 $261,991
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $120,250 $152,000 $152,000
Bill Payments $38,394 $71,497 $84,646
Subtotal Spent on Operations $158,644 $223,497 $236,646
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $300 $1,000 $1,000
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 $158,944 $224,497 $237,646
Net Cash Flow ($78,308) $5,801 $24,345
Cash Balance $692 $6,492 $30,837

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 $692 $6,492 $30,837
Other Current Assets $7,000 $7,000 $7,000
Total Current Assets $7,692 $13,492 $37,837
Long-term Assets
Long-term Assets $19,000 $19,000 $19,000
Accumulated Depreciation $3,804 $4,121 $4,438
Total Long-term Assets $15,196 $14,879 $14,562
Total Assets $22,888 $28,371 $52,399
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,561 $5,994 $7,043
Current Borrowing $2,700 $1,700 $700
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $7,261 $7,694 $7,743
Long-term Liabilities $0 $0 $0
Total Liabilities $7,261 $7,694 $7,743
Paid-in Capital $125,000 $125,000 $125,000
Retained Earnings ($20,000) ($109,374) ($104,323)
Earnings ($89,374) $5,051 $23,979
Total Capital $15,626 $20,677 $44,656
Total Liabilities and Capital $22,888 $28,371 $52,399
Net Worth $15,626 $20,677 $44,656

8.6 Business Ratios

The following table indicates Business Ratios found within the industry of financial services as well as ratios specific to Green Investments. Please note that while there are some similarities between the general financial service industry and Green Investments, GI is more unusual in that they do their own assessment of companies, beyond typical research.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 196.64% 13.76% 8.79%
Percent of Total Assets
Other Current Assets 30.58% 24.67% 13.36% 44.18%
Total Current Assets 33.61% 47.56% 72.21% 76.27%
Long-term Assets 66.39% 52.44% 27.79% 23.73%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 31.73% 27.12% 14.78% 38.61%
Long-term Liabilities 0.00% 0.00% 0.00% 13.60%
Total Liabilities 31.73% 27.12% 14.78% 52.21%
Net Worth 68.27% 72.88% 85.22% 47.79%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.00% 85.00% 85.00% 100.00%
Selling, General & Administrative Expenses 200.12% 82.81% 75.85% 82.68%
Advertising Expenses 0.00% 0.00% 0.00% 1.66%
Profit Before Interest and Taxes -115.03% 3.23% 13.12% 1.37%
Main Ratios
Current 1.06 1.75 4.89 1.59
Quick 1.06 1.75 4.89 1.22
Total Debt to Total Assets 31.73% 27.12% 14.78% 3.09%
Pre-tax Return on Net Worth -571.95% 34.90% 76.71% 60.22%
Pre-tax Return on Assets -390.49% 25.43% 65.37% 7.76%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -115.12% 2.19% 9.15% n.a
Return on Equity -571.95% 24.43% 53.70% n.a
Activity Ratios
Accounts Payable Turnover 9.42 12.17 12.17 n.a
Payment Days 27 26 28 n.a
Total Asset Turnover 3.39 8.12 5.00 n.a
Debt Ratios
Debt to Net Worth 0.46 0.37 0.17 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $430 $5,798 $30,094 n.a
Interest Coverage -1,231.74 33.80 286.46 n.a
Additional Ratios
Assets to Sales 0.29 0.12 0.20 n.a
Current Debt/Total Assets 32% 27% 15% n.a
Acid Test 1.06 1.75 4.89 n.a
Sales/Net Worth 4.97 11.14 5.87 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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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
Break-even Analysis
Monthly Revenue Break-even $15,225
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $12,941
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $77,635 $230,298 $261,991
Direct Cost of Sales $11,645 $34,545 $39,299
Other Costs of Sales $0 $0 $0
Total Cost of Sales $11,645 $34,545 $39,299
Gross Margin $65,990 $195,753 $222,692
Gross Margin % 85.00% 85.00% 85.00%
Expenses
Payroll $120,250 $152,000 $152,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $3,804 $317 $317
Rent $7,800 $7,800 $7,800
Utilities $1,800 $1,800 $1,800
Insurance $1,800 $1,800 $1,800
Payroll Taxes $18,038 $22,800 $22,800
Other $1,800 $1,800 $1,800
Total Operating Expenses $155,292 $188,317 $188,317
Profit Before Interest and Taxes ($89,301) $7,436 $34,375
EBITDA ($85,497) $7,753 $34,692
Interest Expense $73 $220 $120
Taxes Incurred $0 $2,165 $10,277
Net Profit ($89,374) $5,051 $23,979
Net Profit/Sales -115.12% 2.19% 9.15%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $77,635 $230,298 $261,991
Subtotal Cash from Operations $77,635 $230,298 $261,991
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $3,000 $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 $80,635 $230,298 $261,991
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $120,250 $152,000 $152,000
Bill Payments $38,394 $71,497 $84,646
Subtotal Spent on Operations $158,644 $223,497 $236,646
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $300 $1,000 $1,000
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 $158,944 $224,497 $237,646
Net Cash Flow ($78,308) $5,801 $24,345
Cash Balance $692 $6,492 $30,837
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $692 $6,492 $30,837
Other Current Assets $7,000 $7,000 $7,000
Total Current Assets $7,692 $13,492 $37,837
Long-term Assets
Long-term Assets $19,000 $19,000 $19,000
Accumulated Depreciation $3,804 $4,121 $4,438
Total Long-term Assets $15,196 $14,879 $14,562
Total Assets $22,888 $28,371 $52,399
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,561 $5,994 $7,043
Current Borrowing $2,700 $1,700 $700
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $7,261 $7,694 $7,743
Long-term Liabilities $0 $0 $0
Total Liabilities $7,261 $7,694 $7,743
Paid-in Capital $125,000 $125,000 $125,000
Retained Earnings ($20,000) ($109,374) ($104,323)
Earnings ($89,374) $5,051 $23,979
Total Capital $15,626 $20,677 $44,656
Total Liabilities and Capital $22,888 $28,371 $52,399
Net Worth $15,626 $20,677 $44,656
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 196.64% 13.76% 8.79%
Percent of Total Assets
Other Current Assets 30.58% 24.67% 13.36% 44.18%
Total Current Assets 33.61% 47.56% 72.21% 76.27%
Long-term Assets 66.39% 52.44% 27.79% 23.73%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 31.73% 27.12% 14.78% 38.61%
Long-term Liabilities 0.00% 0.00% 0.00% 13.60%
Total Liabilities 31.73% 27.12% 14.78% 52.21%
Net Worth 68.27% 72.88% 85.22% 47.79%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.00% 85.00% 85.00% 100.00%
Selling, General & Administrative Expenses 200.12% 82.81% 75.85% 82.68%
Advertising Expenses 0.00% 0.00% 0.00% 1.66%
Profit Before Interest and Taxes -115.03% 3.23% 13.12% 1.37%
Main Ratios
Current 1.06 1.75 4.89 1.59
Quick 1.06 1.75 4.89 1.22
Total Debt to Total Assets 31.73% 27.12% 14.78% 3.09%
Pre-tax Return on Net Worth -571.95% 34.90% 76.71% 60.22%
Pre-tax Return on Assets -390.49% 25.43% 65.37% 7.76%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -115.12% 2.19% 9.15% n.a
Return on Equity -571.95% 24.43% 53.70% n.a
Activity Ratios
Accounts Payable Turnover 9.42 12.17 12.17 n.a
Payment Days 27 26 28 n.a
Total Asset Turnover 3.39 8.12 5.00 n.a
Debt Ratios
Debt to Net Worth 0.46 0.37 0.17 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $430 $5,798 $30,094 n.a
Interest Coverage -1,231.74 33.80 286.46 n.a
Additional Ratios
Assets to Sales 0.29 0.12 0.20 n.a
Current Debt/Total Assets 32% 27% 15% n.a
Acid Test 1.06 1.75 4.89 n.a
Sales/Net Worth 4.97 11.14 5.87 n.a
Dividend Payout 0.00 0.00 0.00 n.a