Concrete Fabricators

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Formwork Construction Business Plan

Financal Plan

Summary of three-year financial projections

Financial projections are based on sales volume at the levels described in the revenue section; it presents, to the best of management's knowledge and belief, the company's expected assets, liabilities, capital, revenues, and expenses. Further, the projections reflect management's judgement of the expected conditions and its expected course of action, given the hypothetical assumptions.

Financial notes and assumptions

  • Revenues will be derived from sales of services for the installation of reinforced-concrete utilizing formwork, reinforcing steel, embedded items, concrete placement, and engineering. Concrete Fabricators plans to bid and receive contracts for commercial concrete projects at all levels throughout the state. Management also expects to achieve a small percentage of revenues resulting from consulting services arising out of training.
  • Annual Growth The company expects annual growth to increase by 110%, on the basis that the company will be stepping up its sales efforts, as well as initiating new partnerships and alliances that will foster growth and extensions of our existing markets. These strategies are designed to build momentum and critical mass within the company and its overall sales results.
  • Cost of Goods Concrete Fabricators expects that its services will bear a reasonably high markup, which translates to a relatively low cost of goods. Cost of goods includes consideration for cost of equipment, cost of products, bank charges due to credit card transactions (not passed along to the consumer), and labor.
  • Operating Expenses Concrete Fabricators groups sales and marketing expenses, and general and administrative expense items under this category.

7.1 Break-even Analysis

The Break-even Analysis chart and table show that if the costs stay at the current, or relatively stable, level we will be able to make an increased profit by the second year.

Break-even Analysis
Monthly Revenue Break-even $23,465
Assumptions:
Average Percent Variable Cost 4%
Estimated Monthly Fixed Cost $22,620

7.2 Projected Profit and Loss

The following table outlines our expected profit and loss for fiscal years 2000-2002.

Pro Forma Profit and Loss
2000 2001 2002
Sales $277,692 $416,539 $624,807
Direct Cost of Sales $10,000 $20,000 $40,000
Other $3,000 $6,000 $12,000
Total Cost of Sales $13,000 $26,000 $52,000
Gross Margin $264,692 $390,539 $572,807
Gross Margin % 95.32% 93.76% 91.68%
Expenses
Payroll $139,512 $152,176 $171,500
Sales and Marketing and Other Expenses $34,344 $47,610 $71,010
Depreciation $47,997 $50,333 $52,668
Rent/Mortgage $12,420 $12,420 $12,420
Supplies and Equipment $9,926 $19,851 $39,702
Insurance $14,459 $21,688 $32,533
Services $2,833 $2,833 $2,833
Payroll Taxes $9,947 $10,800 $12,600
Other $0 $0 $0
Total Operating Expenses $271,437 $317,711 $395,266
Profit Before Interest and Taxes ($6,745) $72,828 $177,541
EBITDA $41,252 $123,160 $230,209
Interest Expense $1,597 $922 $288
Taxes Incurred $0 $17,977 $45,052
Net Profit ($8,342) $53,930 $132,201
Net Profit/Sales -3.00% 12.95% 21.16%

7.3 Projected Cash Flow

The following chart and table show our estimated cash flow for this plan.

Pro Forma Cash Flow
2000 2001 2002
Cash Received
Cash from Operations
Cash Sales $69,423 $104,135 $156,202
Cash from Receivables $194,193 $293,703 $440,554
Subtotal Cash from Operations $263,616 $397,838 $596,755
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $2,000 $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 $3,000 $0 $0
Subtotal Cash Received $268,616 $397,838 $596,755
Expenditures 2000 2001 2002
Expenditures from Operations
Cash Spending $139,512 $152,176 $171,500
Bill Payments $131,211 $154,852 $259,534
Subtotal Spent on Operations $270,723 $307,028 $431,034
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $1,100 $900 $0
Other Liabilities Principal Repayment $6,000 $6,000 $6,000
Long-term Liabilities Principal Repayment $6,000 $6,000 $5,766
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $283,823 $319,928 $442,800
Net Cash Flow ($15,207) $77,910 $153,955
Cash Balance $30,101 $108,010 $261,966

7.4 Projected Balance Sheet

The following table provides Concrete Fabricator's projected balance sheets for 2000-2002.

Pro Forma Balance Sheet
2000 2001 2002
Assets
Current Assets
Cash $30,101 $108,010 $261,966
Accounts Receivable $37,403 $56,104 $84,156
Other Current Assets $8,830 $8,830 $8,830
Total Current Assets $76,333 $172,944 $354,951
Long-term Assets
Long-term Assets $507,687 $507,687 $507,687
Accumulated Depreciation $93,688 $144,021 $196,689
Total Long-term Assets $413,999 $363,667 $310,999
Total Assets $490,332 $536,611 $665,950
Liabilities and Capital 2000 2001 2002
Current Liabilities
Accounts Payable $7,910 $13,159 $22,063
Current Borrowing $900 $0 $0
Other Current Liabilities $16,785 $10,785 $4,785
Subtotal Current Liabilities $25,595 $23,944 $26,848
Long-term Liabilities $11,766 $5,766 $0
Total Liabilities $37,361 $29,710 $26,848
Paid-in Capital $3,000 $3,000 $3,000
Retained Earnings $458,313 $449,971 $503,901
Earnings ($8,342) $53,930 $132,201
Total Capital $452,971 $506,901 $639,101
Total Liabilities and Capital $490,332 $536,611 $665,950
Net Worth $452,971 $506,901 $639,101

7.5 Business Ratios

The following table includes Industry Profile statistics for the concrete work industry, as determined by the Standard Industrial Classifications (SIC) Index code 1799. These statistics show a comparison of industry standards and the key ratios for this plan.

Ratio Analysis
2000 2001 2002 Industry Profile
Sales Growth 42.86% 50.00% 50.00% 7.50%
Percent of Total Assets
Accounts Receivable 7.63% 10.46% 12.64% 34.20%
Other Current Assets 1.80% 1.65% 1.33% 27.20%
Total Current Assets 15.57% 32.23% 53.30% 67.00%
Long-term Assets 84.43% 67.77% 46.70% 33.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 5.22% 4.46% 4.03% 42.20%
Long-term Liabilities 2.40% 1.07% 0.00% 12.30%
Total Liabilities 7.62% 5.54% 4.03% 54.50%
Net Worth 92.38% 94.46% 95.97% 45.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.32% 93.76% 91.68% 33.10%
Selling, General & Administrative Expenses 77.24% 65.33% 58.70% 18.10%
Advertising Expenses 2.52% 3.36% 4.48% 0.30%
Profit Before Interest and Taxes -2.43% 17.48% 28.42% 3.20%
Main Ratios
Current 2.98 7.22 13.22 1.63
Quick 2.98 7.22 13.22 1.30
Total Debt to Total Assets 7.62% 5.54% 4.03% 54.50%
Pre-tax Return on Net Worth -1.84% 14.19% 27.73% 8.60%
Pre-tax Return on Assets -1.70% 13.40% 26.62% 18.80%
Additional Ratios 2000 2001 2002
Net Profit Margin -3.00% 12.95% 21.16% n.a
Return on Equity -1.84% 10.64% 20.69% n.a
Activity Ratios
Accounts Receivable Turnover 5.57 5.57 5.57 n.a
Collection Days 59 55 55 n.a
Accounts Payable Turnover 12.46 12.17 12.17 n.a
Payment Days 39 24 24 n.a
Total Asset Turnover 0.57 0.78 0.94 n.a
Debt Ratios
Debt to Net Worth 0.08 0.06 0.04 n.a
Current Liab. to Liab. 0.69 0.81 1.00 n.a
Liquidity Ratios
Net Working Capital $50,738 $149,000 $328,103 n.a
Interest Coverage -4.22 79.02 615.82 n.a
Additional Ratios
Assets to Sales 1.77 1.29 1.07 n.a
Current Debt/Total Assets 5% 4% 4% n.a
Acid Test 1.52 4.88 10.09 n.a
Sales/Net Worth 0.61 0.82 0.98 n.a
Dividend Payout 0.00 0.00 0.00 n.a