Plan Outline
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SIC 5699 Apparel and Accessory Stores - Miscellaneous apparel and accessory stores
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Sports Memorabilia Business Plan
Jerseys R Us
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Financial Plan
The following sections outline important financial information.
7.1 Important Assumptions
The following table details 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 |
7.2 Business Ratios
The following table indicates industry and business specific Business Ratios, based on NAICS code 448190, Clothing Stores offering specialized lines of garments.
| Ratio Analysis | ||||
| 2003 | 2004 | 2005 | Industry Profile | |
| Sales Growth | -10.61% | 65.20% | 28.16% | 5.27% |
| Percent of Total Assets | ||||
| Inventory | 2.53% | 3.79% | 4.14% | 38.34% |
| Other Current Assets | 12.86% | 13.52% | 11.52% | 26.48% |
| Total Current Assets | 41.88% | 50.49% | 60.68% | 88.71% |
| Long-term Assets | 58.12% | 49.51% | 39.32% | 11.29% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.07% | 5.80% | 5.83% | 37.92% |
| Long-term Liabilities | 3.75% | 1.89% | 0.31% | 12.86% |
| Total Liabilities | 7.82% | 7.69% | 6.14% | 50.78% |
| Net Worth | 92.18% | 92.31% | 93.86% | 49.22% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 70.00% | 70.00% | 70.00% | 14.97% |
| Selling, General & Administrative Expenses | 77.62% | 61.65% | 56.25% | 6.56% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.14% |
| Profit Before Interest and Taxes | -6.60% | 12.55% | 20.13% | 1.32% |
| Main Ratios | ||||
| Current | 10.30 | 8.71 | 10.41 | 2.10 |
| Quick | 9.68 | 8.05 | 9.70 | 0.86 |
| Total Debt to Total Assets | 7.82% | 7.69% | 6.14% | 57.27% |
| Pre-tax Return on Net Worth | -5.40% | 13.14% | 23.15% | 4.00% |
| Pre-tax Return on Assets | -4.98% | 12.13% | 21.73% | 9.36% |
| Additional Ratios | 2003 | 2004 | 2005 | |
| Net Profit Margin | -7.49% | 8.50% | 13.96% | n.a |
| Return on Equity | -5.40% | 9.19% | 16.21% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 1.64 | 9.83 | 8.87 | n.a |
| Accounts Payable Turnover | 7.98 | 12.17 | 12.17 | n.a |
| Payment Days | 41 | 23 | 27 | n.a |
| Total Asset Turnover | 0.66 | 1.00 | 1.09 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.08 | 0.08 | 0.07 | n.a |
| Current Liab. to Liab. | 0.52 | 0.75 | 0.95 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $56,463 | $73,403 | $105,726 | n.a |
| Interest Coverage | -7.35 | 31.40 | 104.43 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 1.51 | 1.00 | 0.92 | n.a |
| Current Debt/Total Assets | 4% | 6% | 6% | n.a |
| Acid Test | 9.68 | 8.05 | 9.70 | n.a |
| Sales/Net Worth | 0.72 | 1.08 | 1.16 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
7.3 Break-even Analysis
The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $9,047 |
| Assumptions: | |
| Average Percent Variable Cost | 30% |
| Estimated Monthly Fixed Cost | $6,333 |
7.4 Projected Profit and Loss
The following table and charts project Profit and Loss.
| Pro Forma Profit and Loss | |||
| 2003 | 2004 | 2005 | |
| Sales | $99,218 | $163,913 | $210,065 |
| Direct Cost of Sales | $29,766 | $49,174 | $63,019 |
| Other Costs of Goods | $0 | $0 | $0 |
| Total Cost of Sales | $29,766 | $49,174 | $63,019 |
| Gross Margin | $69,453 | $114,739 | $147,045 |
| Gross Margin % | 70.00% | 70.00% | 70.00% |
| Expenses | |||
| Payroll | $42,000 | $57,800 | $67,000 |
| Sales and Marketing and Other Expenses | $3,000 | $3,000 | $3,000 |
| Depreciation | $5,497 | $5,500 | $5,500 |
| Rent | $10,800 | $10,800 | $10,800 |
| Utilities | $5,400 | $5,400 | $5,400 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Payroll Taxes | $6,300 | $8,670 | $10,050 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $75,997 | $94,170 | $104,750 |
| Profit Before Interest and Taxes | ($6,544) | $20,569 | $42,295 |
| EBITDA | ($1,047) | $26,069 | $47,795 |
| Interest Expense | $890 | $655 | $405 |
| Taxes Incurred | $0 | $5,974 | $12,567 |
| Net Profit | ($7,434) | $13,940 | $29,323 |
| Net Profit/Sales | -7.49% | 8.50% | 13.96% |
7.5 Projected Cash Flow
The following table and chart present Projected Cash Flow. Please note that there is a new investment received in January. This was an investment that Phil made into the business. Please also note a significant charge listed in January under purchase of long-term assets, the cost of buying out the lease and the existing business.
| Pro Forma Cash Flow | |||
| 2003 | 2004 | 2005 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $99,218 | $163,913 | $210,065 |
| Subtotal Cash from Operations | $99,218 | $163,913 | $210,065 |
| 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 | $85,000 | $0 | $0 |
| Subtotal Cash Received | $184,218 | $163,913 | $210,065 |
| Expenditures | 2003 | 2004 | 2005 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $57,800 | $67,000 |
| Bill Payments | $42,054 | $85,680 | $108,281 |
| Subtotal Spent on Operations | $84,054 | $143,480 | $175,281 |
| 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 | $2,400 | $2,500 | $2,500 |
| Purchase Other Current Assets | $1,200 | $3,000 | $0 |
| Purchase Long-term Assets | $65,000 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $152,654 | $148,980 | $177,781 |
| Net Cash Flow | $31,565 | $14,933 | $32,284 |
| Cash Balance | $39,565 | $54,498 | $86,781 |
7.6 Projected Balance Sheet
The following table displays the Projected Balance Sheet.
| Pro Forma Balance Sheet | |||
| 2003 | 2004 | 2005 | |
| Assets | |||
| Current Assets | |||
| Cash | $39,565 | $54,498 | $86,781 |
| Inventory | $3,772 | $6,231 | $7,985 |
| Other Current Assets | $19,200 | $22,200 | $22,200 |
| Total Current Assets | $62,537 | $82,929 | $116,967 |
| Long-term Assets | |||
| Long-term Assets | $99,000 | $99,000 | $99,000 |
| Accumulated Depreciation | $12,197 | $17,697 | $23,197 |
| Total Long-term Assets | $86,803 | $81,303 | $75,803 |
| Total Assets | $149,340 | $164,232 | $192,770 |
| Liabilities and Capital | 2003 | 2004 | 2005 |
| Current Liabilities | |||
| Accounts Payable | $3,874 | $7,326 | $9,041 |
| Current Borrowing | $2,200 | $2,200 | $2,200 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $6,074 | $9,526 | $11,241 |
| Long-term Liabilities | $5,600 | $3,100 | $600 |
| Total Liabilities | $11,674 | $12,626 | $11,841 |
| Paid-in Capital | $85,000 | $85,000 | $85,000 |
| Retained Earnings | $60,100 | $52,666 | $66,606 |
| Earnings | ($7,434) | $13,940 | $29,323 |
| Total Capital | $137,666 | $151,606 | $180,929 |
| Total Liabilities and Capital | $149,340 | $164,232 | $192,770 |
| Net Worth | $137,666 | $151,606 | $180,929 |
