Freight Brokerage Business Plan

Silicon Freight Brokers

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Financial Plan

The following subtopics will provide more financial information.

7.1 Important Assumptions

See following table for general 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 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

This break-even analysis table and chart below project the necessary commission per month. As a service provider business we have labor costs and expenses, but no direct costs of sales. Salary costs are included in the Personnel table and expenses are listed in the Profit and Loss table.

Break-even Analysis
Monthly Revenue Break-even $6,251
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $6,251

7.3 Projected Profit and Loss

The following table presents the projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $73,732 $87,174 $94,708
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $73,732 $87,174 $94,708
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $52,800 $55,680 $55,680
Sales and Marketing and Other Expenses $4,800 $4,250 $4,250
Depreciation $672 $672 $672
Website Maintenance $780 $780 $780
Utilities, DSL $1,440 $1,440 $1,440
Insurance, Licenses $1,200 $1,200 $1,200
Rent $5,400 $5,400 $5,400
Payroll Taxes $7,920 $8,352 $8,352
Other $0 $0 $0
Total Operating Expenses $75,012 $77,774 $77,774
Profit Before Interest and Taxes ($1,280) $9,400 $16,934
EBITDA ($608) $10,072 $17,606
Interest Expense $0 $0 $0
Taxes Incurred $0 $2,350 $4,304
Net Profit ($1,280) $7,050 $12,630
Net Profit/Sales -1.74% 8.09% 13.34%

7.4 Projected Cash Flow

The following table shows our projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $18,433 $21,794 $23,677
Cash from Receivables $42,219 $62,996 $69,694
Subtotal Cash from Operations $60,652 $84,789 $93,371
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 $4,000 $0 $0
Subtotal Cash Received $64,652 $84,789 $93,371
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $52,800 $55,680 $55,680
Bill Payments $19,784 $23,575 $25,565
Subtotal Spent on Operations $72,584 $79,255 $81,245
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 $72,584 $79,255 $81,245
Net Cash Flow ($7,932) $5,535 $12,126
Cash Balance $8,418 $13,953 $26,079

7.5 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 $8,418 $13,953 $26,079
Accounts Receivable $13,080 $15,465 $16,801
Other Current Assets $0 $0 $0
Total Current Assets $21,498 $29,418 $42,880
Long-term Assets
Long-term Assets $2,200 $2,200 $2,200
Accumulated Depreciation $672 $1,344 $2,016
Total Long-term Assets $1,528 $856 $184
Total Assets $23,026 $30,274 $43,064
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $1,756 $1,954 $2,114
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,756 $1,954 $2,114
Long-term Liabilities $0 $0 $0
Total Liabilities $1,756 $1,954 $2,114
Paid-in Capital $26,000 $26,000 $26,000
Retained Earnings ($3,450) ($4,730) $2,320
Earnings ($1,280) $7,050 $12,630
Total Capital $21,270 $28,320 $40,950
Total Liabilities and Capital $23,026 $30,274 $43,064
Net Worth $21,270 $28,320 $40,950

7.6 Business Ratios

The following table contains important business ratios from the freight transportation arrangement industry, as determined by the Standard Industry Classification (SIC) Index code 4731.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 18.23% 8.64% 4.00%
Percent of Total Assets
Accounts Receivable 56.80% 51.08% 39.01% 27.00%
Other Current Assets 0.00% 0.00% 0.00% 37.60%
Total Current Assets 93.36% 97.17% 99.57% 65.20%
Long-term Assets 6.64% 2.83% 0.43% 34.80%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.63% 6.45% 4.91% 36.10%
Long-term Liabilities 0.00% 0.00% 0.00% 16.30%
Total Liabilities 7.63% 6.45% 4.91% 52.40%
Net Worth 92.37% 93.55% 95.09% 47.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 33.90%
Selling, General & Administrative Expenses 101.74% 91.91% 86.59% 24.00%
Advertising Expenses 1.63% 0.75% 0.69% 0.50%
Profit Before Interest and Taxes -1.74% 10.78% 17.88% 1.20%
Main Ratios
Current 12.24 15.06 20.28 1.59
Quick 12.24 15.06 20.28 1.32
Total Debt to Total Assets 7.63% 6.45% 4.91% 52.40%
Pre-tax Return on Net Worth -6.02% 33.19% 41.35% 2.90%
Pre-tax Return on Assets -5.56% 31.05% 39.32% 6.10%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -1.74% 8.09% 13.34% n.a
Return on Equity -6.02% 24.89% 30.84% n.a
Activity Ratios
Accounts Receivable Turnover 4.23 4.23 4.23 n.a
Collection Days 56 80 83 n.a
Accounts Payable Turnover 12.26 12.17 12.17 n.a
Payment Days 27 28 29 n.a
Total Asset Turnover 3.20 2.88 2.20 n.a
Debt Ratios
Debt to Net Worth 0.08 0.07 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $19,742 $27,464 $40,766 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.31 0.35 0.45 n.a
Current Debt/Total Assets 8% 6% 5% n.a
Acid Test 4.79 7.14 12.33 n.a
Sales/Net Worth 3.47 3.08 2.31 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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