Second Run Pizza

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Movie Theater Restaurant Business Plan

Financial Plan

We will invest $300,000 of our own capital. This will provide the start-up financing required.

7.1 Break-even Analysis

Our break-even analysis is based on the average of the first-year numbers for total sales by meal served, total cost of sales, and all operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. We realize that this is not the same as fixed cost, but these conservative assumptions make for a better estimate of real risk.

Break-even Analysis
Monthly Units Break-even 7,778
Monthly Revenue Break-even $46,356
Assumptions:
Average Per-Unit Revenue $5.96
Average Per-Unit Variable Cost $1.53
Estimated Monthly Fixed Cost $34,483

7.2 Projected Profit and Loss

The following table and chart shows projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $692,100 $860,000 $1,150,000
Direct Cost of Sales $177,255 $213,500 $287,000
Movie Screening Expenses $77,861 $96,750 $129,375
Total Cost of Sales $255,116 $310,250 $416,375
Gross Margin $436,984 $549,750 $733,625
Gross Margin % 63.14% 63.92% 63.79%
Expenses
Payroll $288,000 $307,000 $326,000
Sales and Marketing and Other Expenses $22,600 $8,000 $8,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $14,400 $14,400 $14,400
Insurance $21,600 $21,600 $21,600
Rent $24,000 $24,000 $24,000
Payroll Taxes $43,200 $46,050 $48,900
Other $0 $0 $0
Total Operating Expenses $413,800 $421,050 $442,900
Profit Before Interest and Taxes $23,184 $128,700 $290,725
EBITDA $23,184 $128,700 $290,725
Interest Expense $0 $0 $0
Taxes Incurred $6,955 $38,610 $87,218
Net Profit $16,229 $90,090 $203,508
Net Profit/Sales 2.34% 10.48% 17.70%

7.3 Projected Cash Flow

The table and chart shows projected cash flow for the year.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $692,100 $860,000 $1,150,000
Subtotal Cash from Operations $692,100 $860,000 $1,150,000
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 $692,100 $860,000 $1,150,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $288,000 $307,000 $326,000
Bill Payments $337,234 $475,500 $607,541
Subtotal Spent on Operations $625,234 $782,500 $933,541
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 $625,234 $782,500 $933,541
Net Cash Flow $66,866 $77,500 $216,459
Cash Balance $216,066 $293,566 $510,026

7.4 Projected Balance Sheet

The table shows projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $216,066 $293,566 $510,026
Other Current Assets $10,000 $10,000 $10,000
Total Current Assets $226,066 $303,566 $520,026
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $226,066 $303,566 $520,026
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $50,638 $38,047 $50,999
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $50,638 $38,047 $50,999
Long-term Liabilities $0 $0 $0
Total Liabilities $50,638 $38,047 $50,999
Paid-in Capital $300,000 $300,000 $300,000
Retained Earnings ($140,800) ($124,571) ($34,481)
Earnings $16,229 $90,090 $203,508
Total Capital $175,429 $265,519 $469,026
Total Liabilities and Capital $226,066 $303,566 $520,026
Net Worth $175,429 $265,519 $469,026

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry Profile ratios based on the Standard Industrial Classification (SIC) code 5813, Eating Places, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 24.26% 33.72% 1.90%
Percent of Total Assets
Other Current Assets 4.42% 3.29% 1.92% 44.60%
Total Current Assets 100.00% 100.00% 100.00% 52.30%
Long-term Assets 0.00% 0.00% 0.00% 47.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.40% 12.53% 9.81% 28.20%
Long-term Liabilities 0.00% 0.00% 0.00% 23.10%
Total Liabilities 22.40% 12.53% 9.81% 51.30%
Net Worth 77.60% 87.47% 90.19% 48.70%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 63.14% 63.92% 63.79% 42.30%
Selling, General & Administrative Expenses 60.79% 53.45% 46.10% 23.40%
Advertising Expenses 3.27% 0.93% 0.70% 2.40%
Profit Before Interest and Taxes 3.35% 14.97% 25.28% 2.80%
Main Ratios
Current 4.46 7.98 10.20 1.14
Quick 4.46 7.98 10.20 0.74
Total Debt to Total Assets 22.40% 12.53% 9.81% 51.30%
Pre-tax Return on Net Worth 13.22% 48.47% 61.98% 5.20%
Pre-tax Return on Assets 10.26% 42.40% 55.91% 10.60%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 2.34% 10.48% 17.70% n.a
Return on Equity 9.25% 33.93% 43.39% n.a
Activity Ratios
Accounts Payable Turnover 7.66 12.17 12.17 n.a
Payment Days 27 35 26 n.a
Total Asset Turnover 3.06 2.83 2.21 n.a
Debt Ratios
Debt to Net Worth 0.29 0.14 0.11 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $175,429 $265,519 $469,026 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.33 0.35 0.45 n.a
Current Debt/Total Assets 22% 13% 10% n.a
Acid Test 4.46 7.98 10.20 n.a
Sales/Net Worth 3.95 3.24 2.45 n.a
Dividend Payout 0.00 0.00 0.00 n.a