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SIC 4731 Transportation Services - Freight transportation arrangement
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Packaging and Shipping Business Plan
AuctionShipper
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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 | 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 Break-even Analysis
The Break-even Analysis indicates the monthly revenue needed to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $17,351 |
| Assumptions: | |
| Average Percent Variable Cost | 67% |
| Estimated Monthly Fixed Cost | $5,723 |
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 | $120,710 | $185,184 | $284,562 |
| Direct Cost of Sales | $80,896 | $131,351 | $201,840 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $80,896 | $131,351 | $201,840 |
| Gross Margin | $39,814 | $53,833 | $82,721 |
| Gross Margin % | 32.98% | 29.07% | 29.07% |
| Expenses | |||
| Payroll | $46,500 | $56,000 | $65,000 |
| Sales and Marketing and Other Expenses | $2,400 | $2,400 | $2,400 |
| Depreciation | $799 | $799 | $799 |
| Rent | $8,400 | $8,400 | $9,000 |
| Utilities | $1,800 | $1,800 | $1,800 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Payroll Taxes | $6,975 | $8,400 | $9,750 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $68,674 | $79,599 | $90,549 |
| Profit Before Interest and Taxes | ($28,860) | ($25,767) | ($7,828) |
| EBITDA | ($28,061) | ($24,968) | ($7,029) |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $0 | $0 |
| Net Profit | ($28,860) | ($25,767) | ($7,828) |
| Net Profit/Sales | -23.91% | -13.91% | -2.75% |
8.4 Projected Cash Flow
The following table and chart will indicate Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $120,710 | $185,184 | $284,562 |
| Subtotal Cash from Operations | $120,710 | $185,184 | $284,562 |
| 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 | $120,710 | $185,184 | $284,562 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $46,500 | $56,000 | $65,000 |
| Bill Payments | $90,234 | $153,517 | $220,637 |
| Subtotal Spent on Operations | $136,734 | $209,517 | $285,637 |
| 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 | $136,734 | $209,517 | $285,637 |
| Net Cash Flow | ($16,025) | ($24,334) | ($1,075) |
| Cash Balance | $43,700 | $19,366 | $18,292 |
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 | $43,700 | $19,366 | $18,292 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $43,700 | $19,366 | $18,292 |
| Long-term Assets | |||
| Long-term Assets | $4,000 | $4,000 | $4,000 |
| Accumulated Depreciation | $799 | $1,598 | $2,397 |
| Total Long-term Assets | $3,201 | $2,402 | $1,603 |
| Total Assets | $46,901 | $21,768 | $19,895 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $12,036 | $12,670 | $18,624 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $12,036 | $12,670 | $18,624 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $12,036 | $12,670 | $18,624 |
| Paid-in Capital | $70,000 | $70,000 | $70,000 |
| Retained Earnings | ($6,275) | ($35,135) | ($60,902) |
| Earnings | ($28,860) | ($25,767) | ($7,828) |
| Total Capital | $34,865 | $9,098 | $1,271 |
| Total Liabilities and Capital | $46,901 | $21,768 | $19,895 |
| Net Worth | $34,865 | $9,098 | $1,271 |
8.6 Business Ratios
The following table illustrates Business Ratios specific to this company as well as the industry.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 53.41% | 53.66% | 4.21% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 36.72% |
| Total Current Assets | 93.18% | 88.97% | 91.94% | 63.63% |
| Long-term Assets | 6.82% | 11.03% | 8.06% | 36.37% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 25.66% | 58.20% | 93.61% | 32.89% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 18.63% |
| Total Liabilities | 25.66% | 58.20% | 93.61% | 51.52% |
| Net Worth | 74.34% | 41.80% | 6.39% | 48.48% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 32.98% | 29.07% | 29.07% | 34.93% |
| Selling, General & Administrative Expenses | 56.89% | 42.98% | 31.82% | 22.73% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.73% |
| Profit Before Interest and Taxes | -23.91% | -13.91% | -2.75% | 1.04% |
| Main Ratios | ||||
| Current | 3.63 | 1.53 | 0.98 | 1.48 |
| Quick | 3.63 | 1.53 | 0.98 | 1.22 |
| Total Debt to Total Assets | 25.66% | 58.20% | 93.61% | 57.32% |
| Pre-tax Return on Net Worth | -82.78% | -283.20% | -615.95% | 2.62% |
| Pre-tax Return on Assets | -61.53% | -118.37% | -39.34% | 6.14% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -23.91% | -13.91% | -2.75% | n.a |
| Return on Equity | -82.78% | -283.20% | -615.95% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 8.50 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 29 | 25 | n.a |
| Total Asset Turnover | 2.57 | 8.51 | 14.30 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.35 | 1.39 | 14.66 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $31,664 | $6,696 | ($332) | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.39 | 0.12 | 0.07 | n.a |
| Current Debt/Total Assets | 26% | 58% | 94% | n.a |
| Acid Test | 3.63 | 1.53 | 0.98 | n.a |
| Sales/Net Worth | 3.46 | 20.35 | 223.92 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
