Green Office

Start your own business plan »

Office Supplies Retail Business Plan

Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following table details important Financial Assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 8.00% 8.00% 8.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The following table and chart show our break-even analysis.

Break-even Analysis
Monthly Revenue Break-even $31,303
Assumptions:
Average Percent Variable Cost 50%
Estimated Monthly Fixed Cost $15,657

8.3 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 $259,724 $818,950 $1,004,331
Direct Cost of Sales $129,821 $532,318 $652,815
Other Costs of Goods $0 $0 $0
Total Cost of Sales $129,821 $532,318 $652,815
Gross Margin $129,903 $286,633 $351,516
Gross Margin % 50.02% 35.00% 35.00%
Expenses
Payroll $131,200 $144,320 $158,752
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $8,700 $8,700 $8,700
Rent $12,000 $12,000 $12,000
Utilities $6,000 $6,000 $6,000
Insurance $2,400 $2,400 $2,400
Payroll Taxes $19,680 $27,180 $28,080
Website Maintenance $5,500 $6,500 $7,500
Total Operating Expenses $187,880 $209,500 $225,832
Profit Before Interest and Taxes ($57,977) $77,133 $125,684
EBITDA ($49,277) $85,833 $134,384
Interest Expense $3,854 $3,731 $3,500
Taxes Incurred $0 $22,021 $36,655
Net Profit ($61,831) $51,381 $85,528
Net Profit/Sales -23.81% 6.27% 8.52%

8.4 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 $64,931 $204,738 $251,083
Cash from Receivables $151,445 $520,877 $722,308
Subtotal Cash from Operations $216,376 $725,615 $973,390
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $3,000 $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 $36,000 $0
Subtotal Cash Received $216,376 $764,615 $973,390
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $131,200 $144,320 $158,752
Bill Payments $130,946 $601,459 $748,773
Subtotal Spent on Operations $262,146 $745,779 $907,525
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $2,234
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $3,403 $3,302 $3,324
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $265,548 $749,080 $913,083
Net Cash Flow ($49,173) $15,534 $60,308
Cash Balance $79,527 $95,062 $155,369

8.5 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 $79,527 $95,062 $155,369
Other Current Assets $3,500 $3,500 $3,500
Total Current Assets $141,788 $269,506 $368,509
Long-term Assets
Long-term Assets $43,500 $43,500 $43,500
Accumulated Depreciation $8,700 $17,400 $26,100
Total Long-term Assets $34,800 $26,100 $17,400
Total Assets $176,588 $295,606 $385,909
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $20,122 $52,060 $62,392
Current Borrowing $0 $3,000 $766
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $20,122 $55,060 $63,158
Long-term Liabilities $46,597 $43,296 $39,972
Total Liabilities $66,719 $98,356 $103,131
Paid-in Capital $213,000 $249,000 $249,000
Retained Earnings ($41,300) ($103,131) ($51,750)
Earnings ($61,831) $51,381 $85,528
Total Capital $109,869 $197,250 $282,779
Total Liabilities and Capital $176,588 $295,606 $385,909
Net Worth $109,869 $197,250 $282,779

8.6 Business Ratios

The following table shows common Business Ratios, specific to Green Office as well as to the industry as a whole.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 215.32% 22.64% 1.50%
Percent of Total Assets
Accounts Receivable 24.55% 46.24% 43.44% 38.65%
Inventory 8.73% 11.59% 10.89% 28.15%
Other Current Assets 1.98% 1.18% 0.91% 18.82%
Total Current Assets 80.29% 91.17% 95.49% 85.62%
Long-term Assets 19.71% 8.83% 4.51% 14.38%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 11.39% 18.63% 16.37% 43.40%
Long-term Liabilities 26.39% 14.65% 10.36% 11.10%
Total Liabilities 37.78% 33.27% 26.72% 54.50%
Net Worth 62.22% 66.73% 73.28% 45.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.02% 35.00% 35.00% 22.64%
Selling, General & Administrative Expenses 96.00% 31.88% 28.47% 13.42%
Advertising Expenses 0.00% 0.00% 0.00% 0.26%
Profit Before Interest and Taxes -22.32% 9.42% 12.51% 1.70%
Main Ratios
Current 7.05 4.89 5.83 1.77
Quick 6.28 4.27 5.17 1.07
Total Debt to Total Assets 37.78% 33.27% 26.72% 5.52%
Pre-tax Return on Net Worth -56.28% 37.21% 43.21% 59.64%
Pre-tax Return on Assets -35.01% 24.83% 31.66% 13.69%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -23.81% 6.27% 8.52% n.a
Return on Equity -56.28% 26.05% 30.25% n.a
Activity Ratios
Accounts Receivable Turnover 4.49 4.49 4.49 n.a
Collection Days 56 53 74 n.a
Inventory Turnover 5.91 21.43 17.12 n.a
Accounts Payable Turnover 7.51 12.17 12.17 n.a
Payment Days 27 21 28 n.a
Total Asset Turnover 1.47 2.77 2.60 n.a
Debt Ratios
Debt to Net Worth 0.61 0.50 0.36 n.a
Current Liab. to Liab. 0.30 0.56 0.61 n.a
Liquidity Ratios
Net Working Capital $121,666 $214,446 $305,351 n.a
Interest Coverage -15.04 20.67 35.91 n.a
Additional Ratios
Assets to Sales 0.68 0.36 0.38 n.a
Current Debt/Total Assets 11% 19% 16% n.a
Acid Test 4.13 1.79 2.52 n.a
Sales/Net Worth 2.36 4.15 3.55 n.a
Dividend Payout 0.00 0.00 0.00 n.a