Sports Therapy Business Plan

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Financial Plan

The following sections 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 is shown below.

Break-even Analysis
Monthly Revenue Break-even $21,753
Assumptions:
Average Percent Variable Cost 5%
Estimated Monthly Fixed Cost $20,665

8.3 Projected Profit and Loss

The following table and charts illustrate the projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $136,646 $368,944 $442,733
Direct Cost of Sales $6,832 $18,447 $22,137
Other Costs of Sales $0 $0 $0
Total Cost of Sales $6,832 $18,447 $22,137
Gross Margin $129,814 $350,497 $420,597
Gross Margin % 95.00% 95.00% 95.00%
Expenses
Payroll $190,000 $258,000 $270,000
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $4,404 $4,404 $4,404
Rent $18,000 $18,000 $19,000
Utilities $1,680 $1,680 $1,680
Insurance $3,000 $3,000 $3,500
Payroll Taxes $28,500 $38,700 $40,500
Total Operating Expenses $247,984 $326,184 $341,484
Profit Before Interest and Taxes ($118,170) $24,313 $79,113
EBITDA ($113,766) $28,717 $83,517
Interest Expense $2,740 $2,270 $1,783
Taxes Incurred $0 $6,613 $23,199
Net Profit ($120,911) $15,430 $54,131
Net Profit/Sales -88.48% 4.18% 12.23%

8.4 Projected Cash Flow

The following chart and table show the projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $136,646 $368,944 $442,733
Subtotal Cash from Operations $136,646 $368,944 $442,733
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 $136,646 $368,944 $442,733
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $190,000 $258,000 $270,000
Bill Payments $56,687 $90,087 $112,301
Subtotal Spent on Operations $246,687 $348,087 $382,301
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 $4,868 $4,868 $4,868
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $251,556 $352,955 $387,169
Net Cash Flow ($114,909) $15,990 $55,564
Cash Balance $6,591 $22,580 $78,145

8.5 Projected Balance Sheet

The following table presents the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $6,591 $22,580 $78,145
Other Current Assets $0 $0 $0
Total Current Assets $6,591 $22,580 $78,145
Long-term Assets
Long-term Assets $22,000 $22,000 $22,000
Accumulated Depreciation $4,404 $8,808 $13,212
Total Long-term Assets $17,596 $13,192 $8,788
Total Assets $24,187 $35,772 $86,933
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $6,465 $7,488 $9,386
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,465 $7,488 $9,386
Long-term Liabilities $25,132 $20,264 $15,396
Total Liabilities $31,597 $27,752 $24,782
Paid-in Capital $122,000 $122,000 $122,000
Retained Earnings ($8,500) ($129,411) ($113,980)
Earnings ($120,911) $15,430 $54,131
Total Capital ($7,411) $8,020 $62,151
Total Liabilities and Capital $24,187 $35,772 $86,933
Net Worth ($7,411) $8,020 $62,151

8.6 Business Ratios

The following table offers many business ratios specific to this business. The U.S. Standard Industrial Classifications (SIC) currently classifies sports therapy and training clinics as: Offices of health practitioners, nec. - 8049.9900. The industry profile ratios are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 170.00% 20.00% 3.71%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 44.76%
Total Current Assets 27.25% 63.12% 89.89% 80.71%
Long-term Assets 72.75% 36.88% 10.11% 19.29%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 26.73% 20.93% 10.80% 27.67%
Long-term Liabilities 103.91% 56.65% 17.71% 14.39%
Total Liabilities 130.64% 77.58% 28.51% 42.06%
Net Worth -30.64% 22.42% 71.49% 57.94%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.00% 95.00% 95.00% 100.00%
Selling, General & Administrative Expenses 183.48% 90.82% 82.77% 77.50%
Advertising Expenses 0.00% 0.00% 0.00% 1.52%
Profit Before Interest and Taxes -86.48% 6.59% 17.87% 3.26%
Main Ratios
Current 1.02 3.02 8.33 2.29
Quick 1.02 3.02 8.33 2.00
Total Debt to Total Assets 130.64% 77.58% 28.51% 55.30%
Pre-tax Return on Net Worth 1631.60% 274.86% 124.42% 10.01%
Pre-tax Return on Assets -499.91% 61.62% 88.95% 22.39%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -88.48% 4.18% 12.23% n.a
Return on Equity 0.00% 192.40% 87.10% n.a
Activity Ratios
Accounts Payable Turnover 9.77 12.17 12.17 n.a
Payment Days 27 28 27 n.a
Total Asset Turnover 5.65 10.31 5.09 n.a
Debt Ratios
Debt to Net Worth 0.00 3.46 0.40 n.a
Current Liab. to Liab. 0.20 0.27 0.38 n.a
Liquidity Ratios
Net Working Capital $125 $15,092 $68,759 n.a
Interest Coverage -43.12 10.71 44.37 n.a
Additional Ratios
Assets to Sales 0.18 0.10 0.20 n.a
Current Debt/Total Assets 27% 21% 11% n.a
Acid Test 1.02 3.02 8.33 n.a
Sales/Net Worth 0.00 46.00 7.12 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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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
Break-even Analysis
Monthly Revenue Break-even $21,753
Assumptions:
Average Percent Variable Cost 5%
Estimated Monthly Fixed Cost $20,665
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $136,646 $368,944 $442,733
Direct Cost of Sales $6,832 $18,447 $22,137
Other Costs of Sales $0 $0 $0
Total Cost of Sales $6,832 $18,447 $22,137
Gross Margin $129,814 $350,497 $420,597
Gross Margin % 95.00% 95.00% 95.00%
Expenses
Payroll $190,000 $258,000 $270,000
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $4,404 $4,404 $4,404
Rent $18,000 $18,000 $19,000
Utilities $1,680 $1,680 $1,680
Insurance $3,000 $3,000 $3,500
Payroll Taxes $28,500 $38,700 $40,500
Total Operating Expenses $247,984 $326,184 $341,484
Profit Before Interest and Taxes ($118,170) $24,313 $79,113
EBITDA ($113,766) $28,717 $83,517
Interest Expense $2,740 $2,270 $1,783
Taxes Incurred $0 $6,613 $23,199
Net Profit ($120,911) $15,430 $54,131
Net Profit/Sales -88.48% 4.18% 12.23%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $136,646 $368,944 $442,733
Subtotal Cash from Operations $136,646 $368,944 $442,733
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 $136,646 $368,944 $442,733
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $190,000 $258,000 $270,000
Bill Payments $56,687 $90,087 $112,301
Subtotal Spent on Operations $246,687 $348,087 $382,301
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 $4,868 $4,868 $4,868
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $251,556 $352,955 $387,169
Net Cash Flow ($114,909) $15,990 $55,564
Cash Balance $6,591 $22,580 $78,145
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $6,591 $22,580 $78,145
Other Current Assets $0 $0 $0
Total Current Assets $6,591 $22,580 $78,145
Long-term Assets
Long-term Assets $22,000 $22,000 $22,000
Accumulated Depreciation $4,404 $8,808 $13,212
Total Long-term Assets $17,596 $13,192 $8,788
Total Assets $24,187 $35,772 $86,933
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $6,465 $7,488 $9,386
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,465 $7,488 $9,386
Long-term Liabilities $25,132 $20,264 $15,396
Total Liabilities $31,597 $27,752 $24,782
Paid-in Capital $122,000 $122,000 $122,000
Retained Earnings ($8,500) ($129,411) ($113,980)
Earnings ($120,911) $15,430 $54,131
Total Capital ($7,411) $8,020 $62,151
Total Liabilities and Capital $24,187 $35,772 $86,933
Net Worth ($7,411) $8,020 $62,151
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 170.00% 20.00% 3.71%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 44.76%
Total Current Assets 27.25% 63.12% 89.89% 80.71%
Long-term Assets 72.75% 36.88% 10.11% 19.29%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 26.73% 20.93% 10.80% 27.67%
Long-term Liabilities 103.91% 56.65% 17.71% 14.39%
Total Liabilities 130.64% 77.58% 28.51% 42.06%
Net Worth -30.64% 22.42% 71.49% 57.94%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.00% 95.00% 95.00% 100.00%
Selling, General & Administrative Expenses 183.48% 90.82% 82.77% 77.50%
Advertising Expenses 0.00% 0.00% 0.00% 1.52%
Profit Before Interest and Taxes -86.48% 6.59% 17.87% 3.26%
Main Ratios
Current 1.02 3.02 8.33 2.29
Quick 1.02 3.02 8.33 2.00
Total Debt to Total Assets 130.64% 77.58% 28.51% 55.30%
Pre-tax Return on Net Worth 1631.60% 274.86% 124.42% 10.01%
Pre-tax Return on Assets -499.91% 61.62% 88.95% 22.39%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -88.48% 4.18% 12.23% n.a
Return on Equity 0.00% 192.40% 87.10% n.a
Activity Ratios
Accounts Payable Turnover 9.77 12.17 12.17 n.a
Payment Days 27 28 27 n.a
Total Asset Turnover 5.65 10.31 5.09 n.a
Debt Ratios
Debt to Net Worth 0.00 3.46 0.40 n.a
Current Liab. to Liab. 0.20 0.27 0.38 n.a
Liquidity Ratios
Net Working Capital $125 $15,092 $68,759 n.a
Interest Coverage -43.12 10.71 44.37 n.a
Additional Ratios
Assets to Sales 0.18 0.10 0.20 n.a
Current Debt/Total Assets 27% 21% 11% n.a
Acid Test 1.02 3.02 8.33 n.a
Sales/Net Worth 0.00 46.00 7.12 n.a
Dividend Payout 0.00 0.00 0.00 n.a