Healthy Restaurant Business Plan

Kona-Q

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Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following section will detail important Financial Assumptions.

General Assumptions
2003 2004 2005
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 Projected Cash Flow

The following chart and table will indicate Projected Cash Flow.

Pro Forma Cash Flow
2003 2004 2005
Cash Received
Cash from Operations
Cash Sales $80,597 $255,156 $475,163
Subtotal Cash from Operations $80,597 $255,156 $475,163
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $20,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $75,000 $75,000
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $10,000 $0 $0
Subtotal Cash Received $110,597 $330,156 $550,163
Expenditures 2003 2004 2005
Expenditures from Operations
Cash Spending $46,550 $99,200 $147,800
Bill Payments $50,960 $127,404 $242,199
Subtotal Spent on Operations $97,510 $226,604 $389,999
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $5,500 $5,500 $5,500
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $7,500 $7,500
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $75,000 $75,000
Dividends $0 $0 $0
Subtotal Cash Spent $103,010 $314,604 $477,999
Net Cash Flow $7,586 $15,552 $72,164
Cash Balance $12,575 $28,127 $100,291

8.3 Break-even Analysis

The Break-even Analysis indicates that $10,099 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $10,099
Assumptions:
Average Percent Variable Cost 30%
Estimated Monthly Fixed Cost $7,069

8.4 Projected Profit and Loss

The following table indicates Projected Profit and Loss.

Pro Forma Profit and Loss
2003 2004 2005
Sales $80,597 $255,156 $475,163
Direct Cost of Sales $24,179 $76,547 $142,549
Other Costs of Sales $0 $0 $0
Total Cost of Sales $24,179 $76,547 $142,549
Gross Margin $56,418 $178,609 $332,614
Gross Margin % 70.00% 70.00% 70.00%
Expenses
Payroll $46,550 $99,200 $147,800
Sales and Marketing and Other Expenses $3,600 $7,200 $10,000
Depreciation $12,996 $20,000 $24,000
Rent $9,000 $18,000 $27,000
Utilities $2,400 $4,800 $7,200
Insurance $2,400 $4,800 $7,200
Payroll Taxes $6,983 $14,880 $22,170
Other $900 $1,800 $2,700
Total Operating Expenses $84,829 $170,680 $248,070
Profit Before Interest and Taxes ($28,411) $7,929 $84,544
EBITDA ($15,415) $27,929 $108,544
Interest Expense $1,867 $4,836 $11,036
Taxes Incurred $0 $928 $22,052
Net Profit ($30,278) $2,165 $51,456
Net Profit/Sales -37.57% 0.85% 10.83%

8.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet
2003 2004 2005
Assets
Current Assets
Cash $12,575 $28,127 $100,291
Other Current Assets $0 $0 $0
Total Current Assets $12,575 $28,127 $100,291
Long-term Assets
Long-term Assets $22,141 $97,141 $172,141
Accumulated Depreciation $21,985 $41,985 $65,985
Total Long-term Assets $156 $55,156 $106,156
Total Assets $12,731 $83,283 $206,447
Liabilities and Capital 2003 2004 2005
Current Liabilities
Accounts Payable $4,610 $10,996 $20,705
Current Borrowing $14,500 $9,000 $3,500
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $19,110 $19,996 $24,205
Long-term Liabilities $2,858 $70,358 $137,858
Total Liabilities $21,968 $90,354 $162,063
Paid-in Capital $10,000 $10,000 $10,000
Retained Earnings $11,041 ($19,237) ($17,071)
Earnings ($30,278) $2,165 $51,456
Total Capital ($9,237) ($7,071) $44,384
Total Liabilities and Capital $12,731 $83,283 $206,447
Net Worth ($9,237) ($7,071) $44,384

8.6 Business Ratios

The following table indicates common Business Ratios specific to Kona-Q as well as industry ratios.

Ratio Analysis
2003 2004 2005 Industry Profile
Sales Growth -30.19% 216.58% 86.22% 6.96%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 28.39%
Total Current Assets 98.77% 33.77% 48.58% 37.68%
Long-term Assets 1.23% 66.23% 51.42% 62.32%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 150.10% 24.01% 11.72% 19.17%
Long-term Liabilities 22.45% 84.48% 66.78% 29.21%
Total Liabilities 172.55% 108.49% 78.50% 48.38%
Net Worth -72.55% -8.49% 21.50% 51.62%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 70.00% 70.00% 70.00% 59.31%
Selling, General & Administrative Expenses 105.61% 70.92% 60.97% 39.09%
Advertising Expenses 0.00% 0.00% 0.00% 2.75%
Profit Before Interest and Taxes -35.25% 3.11% 17.79% 1.59%
Main Ratios
Current 0.66 1.41 4.14 1.26
Quick 0.66 1.41 4.14 0.87
Total Debt to Total Assets 172.55% 108.49% 78.50% 3.27%
Pre-tax Return on Net Worth 327.79% -43.75% 165.62% 54.38%
Pre-tax Return on Assets -237.82% 3.71% 35.61% 7.17%
Additional Ratios 2003 2004 2005
Net Profit Margin -37.57% 0.85% 10.83% n.a
Return on Equity 0.00% 0.00% 115.93% n.a
Activity Ratios
Accounts Payable Turnover 11.13 12.17 12.17 n.a
Payment Days 29 21 23 n.a
Total Asset Turnover 6.33 3.06 2.30 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 3.65 n.a
Current Liab. to Liab. 0.87 0.22 0.15 n.a
Liquidity Ratios
Net Working Capital ($6,535) $8,131 $76,086 n.a
Interest Coverage -15.22 1.64 7.66 n.a
Additional Ratios
Assets to Sales 0.16 0.33 0.43 n.a
Current Debt/Total Assets 150% 24% 12% n.a
Acid Test 0.66 1.41 4.14 n.a
Sales/Net Worth 0.00 0.00 10.71 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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General Assumptions
2003 2004 2005
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
Pro Forma Cash Flow
2003 2004 2005
Cash Received
Cash from Operations
Cash Sales $80,597 $255,156 $475,163
Subtotal Cash from Operations $80,597 $255,156 $475,163
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $20,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $75,000 $75,000
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $10,000 $0 $0
Subtotal Cash Received $110,597 $330,156 $550,163
Expenditures 2003 2004 2005
Expenditures from Operations
Cash Spending $46,550 $99,200 $147,800
Bill Payments $50,960 $127,404 $242,199
Subtotal Spent on Operations $97,510 $226,604 $389,999
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $5,500 $5,500 $5,500
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $7,500 $7,500
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $75,000 $75,000
Dividends $0 $0 $0
Subtotal Cash Spent $103,010 $314,604 $477,999
Net Cash Flow $7,586 $15,552 $72,164
Cash Balance $12,575 $28,127 $100,291
Break-even Analysis
Monthly Revenue Break-even $10,099
Assumptions:
Average Percent Variable Cost 30%
Estimated Monthly Fixed Cost $7,069
Pro Forma Profit and Loss
2003 2004 2005
Sales $80,597 $255,156 $475,163
Direct Cost of Sales $24,179 $76,547 $142,549
Other Costs of Sales $0 $0 $0
Total Cost of Sales $24,179 $76,547 $142,549
Gross Margin $56,418 $178,609 $332,614
Gross Margin % 70.00% 70.00% 70.00%
Expenses
Payroll $46,550 $99,200 $147,800
Sales and Marketing and Other Expenses $3,600 $7,200 $10,000
Depreciation $12,996 $20,000 $24,000
Rent $9,000 $18,000 $27,000
Utilities $2,400 $4,800 $7,200
Insurance $2,400 $4,800 $7,200
Payroll Taxes $6,983 $14,880 $22,170
Other $900 $1,800 $2,700
Total Operating Expenses $84,829 $170,680 $248,070
Profit Before Interest and Taxes ($28,411) $7,929 $84,544
EBITDA ($15,415) $27,929 $108,544
Interest Expense $1,867 $4,836 $11,036
Taxes Incurred $0 $928 $22,052
Net Profit ($30,278) $2,165 $51,456
Net Profit/Sales -37.57% 0.85% 10.83%
Pro Forma Balance Sheet
2003 2004 2005
Assets
Current Assets
Cash $12,575 $28,127 $100,291
Other Current Assets $0 $0 $0
Total Current Assets $12,575 $28,127 $100,291
Long-term Assets
Long-term Assets $22,141 $97,141 $172,141
Accumulated Depreciation $21,985 $41,985 $65,985
Total Long-term Assets $156 $55,156 $106,156
Total Assets $12,731 $83,283 $206,447
Liabilities and Capital 2003 2004 2005
Current Liabilities
Accounts Payable $4,610 $10,996 $20,705
Current Borrowing $14,500 $9,000 $3,500
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $19,110 $19,996 $24,205
Long-term Liabilities $2,858 $70,358 $137,858
Total Liabilities $21,968 $90,354 $162,063
Paid-in Capital $10,000 $10,000 $10,000
Retained Earnings $11,041 ($19,237) ($17,071)
Earnings ($30,278) $2,165 $51,456
Total Capital ($9,237) ($7,071) $44,384
Total Liabilities and Capital $12,731 $83,283 $206,447
Net Worth ($9,237) ($7,071) $44,384
Ratio Analysis
2003 2004 2005 Industry Profile
Sales Growth -30.19% 216.58% 86.22% 6.96%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 28.39%
Total Current Assets 98.77% 33.77% 48.58% 37.68%
Long-term Assets 1.23% 66.23% 51.42% 62.32%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 150.10% 24.01% 11.72% 19.17%
Long-term Liabilities 22.45% 84.48% 66.78% 29.21%
Total Liabilities 172.55% 108.49% 78.50% 48.38%
Net Worth -72.55% -8.49% 21.50% 51.62%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 70.00% 70.00% 70.00% 59.31%
Selling, General & Administrative Expenses 105.61% 70.92% 60.97% 39.09%
Advertising Expenses 0.00% 0.00% 0.00% 2.75%
Profit Before Interest and Taxes -35.25% 3.11% 17.79% 1.59%
Main Ratios
Current 0.66 1.41 4.14 1.26
Quick 0.66 1.41 4.14 0.87
Total Debt to Total Assets 172.55% 108.49% 78.50% 3.27%
Pre-tax Return on Net Worth 327.79% -43.75% 165.62% 54.38%
Pre-tax Return on Assets -237.82% 3.71% 35.61% 7.17%
Additional Ratios 2003 2004 2005
Net Profit Margin -37.57% 0.85% 10.83% n.a
Return on Equity 0.00% 0.00% 115.93% n.a
Activity Ratios
Accounts Payable Turnover 11.13 12.17 12.17 n.a
Payment Days 29 21 23 n.a
Total Asset Turnover 6.33 3.06 2.30 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 3.65 n.a
Current Liab. to Liab. 0.87 0.22 0.15 n.a
Liquidity Ratios
Net Working Capital ($6,535) $8,131 $76,086 n.a
Interest Coverage -15.22 1.64 7.66 n.a
Additional Ratios
Assets to Sales 0.16 0.33 0.43 n.a
Current Debt/Total Assets 150% 24% 12% n.a
Acid Test 0.66 1.41 4.14 n.a
Sales/Net Worth 0.00 0.00 10.71 n.a
Dividend Payout 0.00 0.00 0.00 n.a