Basket of Goodies

Start your own business plan »

Gift Basket Business Plan

Financial Plan

The following sections will outline the important financial data.

7.1 Important Assumptions

The following table details important financial assumptions for BOG.

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

The Break-even Analysis indicates BOG will need to sell approximately $4,900 in baskets per month to break even.

Break-even Analysis
Monthly Revenue Break-even $4,915
Assumptions:
Average Percent Variable Cost 34%
Estimated Monthly Fixed Cost $3,223

7.3 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 $43,545 $93,319 $109,910
Direct Cost of Sales $14,989 $26,328 $34,022
Other $0 $0 $0
Total Cost of Sales $14,989 $26,328 $34,022
Gross Margin $28,556 $66,991 $75,888
Gross Margin % 65.58% 71.79% 69.05%
Expenses
Payroll $31,500 $39,000 $39,000
Sales and Marketing and Other Expenses $1,200 $1,200 $1,200
Depreciation $655 $672 $672
Leased Equipment $0 $0 $0
Utilities $0 $0 $0
Insurance $600 $600 $600
Rent $0 $0 $0
Payroll Taxes $4,725 $5,850 $5,850
Other $0 $0 $0
Total Operating Expenses $38,680 $47,322 $47,322
Profit Before Interest and Taxes ($10,124) $19,669 $28,566
EBITDA ($9,469) $20,341 $29,238
Interest Expense $0 $0 $0
Taxes Incurred $0 $4,917 $7,261
Net Profit ($10,124) $14,752 $21,305
Net Profit/Sales -23.25% 15.81% 19.38%

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $43,545 $93,319 $109,910
Subtotal Cash from Operations $43,545 $93,319 $109,910
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 $43,545 $93,319 $109,910
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $31,500 $39,000 $39,000
Bill Payments $18,916 $44,238 $49,978
Subtotal Spent on Operations $50,416 $83,238 $88,978
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 $50,416 $83,238 $88,978
Net Cash Flow ($6,871) $10,081 $20,932
Cash Balance $15,779 $25,860 $46,792

7.5 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 $15,779 $25,860 $46,792
Inventory $3,507 $6,160 $7,960
Other Current Assets $0 $0 $0
Total Current Assets $19,286 $32,020 $54,752
Long-term Assets
Long-term Assets $2,000 $2,000 $2,000
Accumulated Depreciation $655 $1,327 $1,999
Total Long-term Assets $1,345 $673 $1
Total Assets $20,631 $32,693 $54,753
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $6,105 $3,415 $4,170
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,105 $3,415 $4,170
Long-term Liabilities $0 $0 $0
Total Liabilities $6,105 $3,415 $4,170
Paid-in Capital $28,000 $28,000 $28,000
Retained Earnings ($3,350) ($13,474) $1,278
Earnings ($10,124) $14,752 $21,305
Total Capital $14,526 $29,278 $50,584
Total Liabilities and Capital $20,631 $32,693 $54,753
Net Worth $14,526 $29,278 $50,584

7.6 Business Ratios

The ratios table compares BOG's estimated growth, balance and profit ratios to the industry standard for Miscellaneous personal services (Standard Industry Code #7299).

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 114.30% 17.78% 17.90%
Percent of Total Assets
Inventory 17.00% 18.84% 14.54% 4.60%
Other Current Assets 0.00% 0.00% 0.00% 37.10%
Total Current Assets 93.48% 97.94% 100.00% 52.80%
Long-term Assets 6.52% 2.06% 0.00% 47.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 29.59% 10.45% 7.62% 33.90%
Long-term Liabilities 0.00% 0.00% 0.00% 28.00%
Total Liabilities 29.59% 10.45% 7.62% 61.90%
Net Worth 70.41% 89.55% 92.38% 38.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 65.58% 71.79% 69.05% 0.00%
Selling, General & Administrative Expenses 88.87% 55.98% 49.55% 72.70%
Advertising Expenses 0.00% 0.00% 0.00% 2.20%
Profit Before Interest and Taxes -23.25% 21.08% 25.99% 4.00%
Main Ratios
Current 3.16 9.38 13.13 1.81
Quick 2.58 7.57 11.22 1.33
Total Debt to Total Assets 29.59% 10.45% 7.62% 61.90%
Pre-tax Return on Net Worth -69.69% 67.18% 56.47% 6.30%
Pre-tax Return on Assets -49.07% 60.16% 52.17% 16.60%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -23.25% 15.81% 19.38% n.a
Return on Equity -69.69% 50.38% 42.12% n.a
Activity Ratios
Inventory Turnover 10.80 5.45 4.82 n.a
Accounts Payable Turnover 4.10 12.17 12.17 n.a
Payment Days 27 42 27 n.a
Total Asset Turnover 2.11 2.85 2.01 n.a
Debt Ratios
Debt to Net Worth 0.42 0.12 0.08 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $13,181 $28,605 $50,582 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.47 0.35 0.50 n.a
Current Debt/Total Assets 30% 10% 8% n.a
Acid Test 2.58 7.57 11.22 n.a
Sales/Net Worth 3.00 3.19 2.17 n.a
Dividend Payout 0.00 0.00 0.00 n.a