Tools Rental Business Plan

Borrow My Tools

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Financial Plan

The following sections will outline important financial information.

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

Break-even Analysis

The Break-even Analysis table and chart indicate what is needed in monthly revenue to reach the break even point.

Break-even Analysis
Monthly Revenue Break-even $11,869
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $10,098

Projected Profit and Loss

The following table and charts will indicate projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $69,827 $213,240 $248,272
Direct Cost of Sales $10,416 $31,808 $37,033
Other Costs of Sales $0 $0 $0
Total Cost of Sales $10,416 $31,808 $37,033
Gross Margin $59,411 $181,433 $211,239
Gross Margin % 85.08% 85.08% 85.08%
Expenses
Payroll $85,200 $117,600 $123,600
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $12,000 $12,000 $16,000
Rent $7,500 $9,000 $9,000
Utilities $2,200 $2,640 $2,640
Insurance $1,500 $1,800 $1,800
Payroll Taxes $12,780 $17,640 $18,540
Total Operating Expenses $121,180 $160,680 $171,580
Profit Before Interest and Taxes ($61,769) $20,753 $39,659
EBITDA ($49,769) $32,753 $55,659
Interest Expense $6,394 $5,317 $4,219
Taxes Incurred $0 $4,631 $10,632
Net Profit ($68,163) $10,805 $24,808
Net Profit/Sales -97.62% 5.07% 9.99%

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 $69,827 $213,240 $248,272
Subtotal Cash from Operations $69,827 $213,240 $248,272
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 $69,827 $213,240 $248,272
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $85,200 $117,600 $123,600
Bill Payments $38,101 $79,195 $78,378
Subtotal Spent on Operations $123,301 $196,795 $201,978
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 $11,359 $10,938 $11,029
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $20,000
Dividends $0 $0 $0
Subtotal Cash Spent $134,660 $207,733 $233,007
Net Cash Flow ($64,833) $5,507 $15,265
Cash Balance $1,767 $7,274 $22,539

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 $1,767 $7,274 $22,539
Inventory $1,683 $10,372 $4,604
Other Current Assets $0 $0 $0
Total Current Assets $3,450 $17,646 $27,143
Long-term Assets
Long-term Assets $60,000 $60,000 $80,000
Accumulated Depreciation $12,000 $24,000 $40,000
Total Long-term Assets $48,000 $36,000 $40,000
Total Assets $51,450 $53,646 $67,143
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,372 $6,701 $6,419
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,372 $6,701 $6,419
Long-term Liabilities $58,641 $47,703 $36,674
Total Liabilities $63,013 $54,404 $43,093
Paid-in Capital $65,000 $65,000 $65,000
Retained Earnings ($8,400) ($76,563) ($65,758)
Earnings ($68,163) $10,805 $24,808
Total Capital ($11,563) ($758) $24,050
Total Liabilities and Capital $51,450 $53,646 $67,143
Net Worth ($11,563) ($758) $24,050

Business Ratios

The following table represents ratios specific to Borrow My Tools as well as industry average ratios.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 205.39% 16.43% 7.07%
Percent of Total Assets
Inventory 3.27% 19.33% 6.86% 3.96%
Other Current Assets 0.00% 0.00% 0.00% 44.65%
Total Current Assets 6.70% 32.89% 40.43% 76.22%
Long-term Assets 93.30% 67.11% 59.57% 23.78%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.50% 12.49% 9.56% 33.47%
Long-term Liabilities 113.98% 88.92% 54.62% 16.23%
Total Liabilities 122.47% 101.41% 64.18% 49.70%
Net Worth -22.47% -1.41% 35.82% 50.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.08% 85.08% 85.08% 100.00%
Selling, General & Administrative Expenses 182.70% 80.02% 75.09% 84.88%
Advertising Expenses 0.00% 0.00% 0.00% 1.01%
Profit Before Interest and Taxes -88.46% 9.73% 15.97% 1.94%
Main Ratios
Current 0.79 2.63 4.23 1.73
Quick 0.40 1.09 3.51 1.33
Total Debt to Total Assets 122.47% 101.41% 64.18% 3.77%
Pre-tax Return on Net Worth 589.49% -2035.50% 147.36% 57.72%
Pre-tax Return on Assets -132.49% 28.77% 52.78% 8.92%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -97.62% 5.07% 9.99% n.a
Return on Equity 0.00% 0.00% 103.15% n.a
Activity Ratios
Inventory Turnover 9.37 5.28 4.95 n.a
Accounts Payable Turnover 9.72 12.17 12.17 n.a
Payment Days 27 25 31 n.a
Total Asset Turnover 1.36 3.97 3.70 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 1.79 n.a
Current Liab. to Liab. 0.07 0.12 0.15 n.a
Liquidity Ratios
Net Working Capital ($922) $10,945 $20,724 n.a
Interest Coverage -9.66 3.90 9.40 n.a
Additional Ratios
Assets to Sales 0.74 0.25 0.27 n.a
Current Debt/Total Assets 8% 12% 10% n.a
Acid Test 0.40 1.09 3.51 n.a
Sales/Net Worth 0.00 0.00 10.32 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 $11,869
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $10,098
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $69,827 $213,240 $248,272
Direct Cost of Sales $10,416 $31,808 $37,033
Other Costs of Sales $0 $0 $0
Total Cost of Sales $10,416 $31,808 $37,033
Gross Margin $59,411 $181,433 $211,239
Gross Margin % 85.08% 85.08% 85.08%
Expenses
Payroll $85,200 $117,600 $123,600
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $12,000 $12,000 $16,000
Rent $7,500 $9,000 $9,000
Utilities $2,200 $2,640 $2,640
Insurance $1,500 $1,800 $1,800
Payroll Taxes $12,780 $17,640 $18,540
Total Operating Expenses $121,180 $160,680 $171,580
Profit Before Interest and Taxes ($61,769) $20,753 $39,659
EBITDA ($49,769) $32,753 $55,659
Interest Expense $6,394 $5,317 $4,219
Taxes Incurred $0 $4,631 $10,632
Net Profit ($68,163) $10,805 $24,808
Net Profit/Sales -97.62% 5.07% 9.99%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $69,827 $213,240 $248,272
Subtotal Cash from Operations $69,827 $213,240 $248,272
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 $69,827 $213,240 $248,272
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $85,200 $117,600 $123,600
Bill Payments $38,101 $79,195 $78,378
Subtotal Spent on Operations $123,301 $196,795 $201,978
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 $11,359 $10,938 $11,029
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $20,000
Dividends $0 $0 $0
Subtotal Cash Spent $134,660 $207,733 $233,007
Net Cash Flow ($64,833) $5,507 $15,265
Cash Balance $1,767 $7,274 $22,539
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $1,767 $7,274 $22,539
Inventory $1,683 $10,372 $4,604
Other Current Assets $0 $0 $0
Total Current Assets $3,450 $17,646 $27,143
Long-term Assets
Long-term Assets $60,000 $60,000 $80,000
Accumulated Depreciation $12,000 $24,000 $40,000
Total Long-term Assets $48,000 $36,000 $40,000
Total Assets $51,450 $53,646 $67,143
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,372 $6,701 $6,419
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,372 $6,701 $6,419
Long-term Liabilities $58,641 $47,703 $36,674
Total Liabilities $63,013 $54,404 $43,093
Paid-in Capital $65,000 $65,000 $65,000
Retained Earnings ($8,400) ($76,563) ($65,758)
Earnings ($68,163) $10,805 $24,808
Total Capital ($11,563) ($758) $24,050
Total Liabilities and Capital $51,450 $53,646 $67,143
Net Worth ($11,563) ($758) $24,050
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 205.39% 16.43% 7.07%
Percent of Total Assets
Inventory 3.27% 19.33% 6.86% 3.96%
Other Current Assets 0.00% 0.00% 0.00% 44.65%
Total Current Assets 6.70% 32.89% 40.43% 76.22%
Long-term Assets 93.30% 67.11% 59.57% 23.78%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.50% 12.49% 9.56% 33.47%
Long-term Liabilities 113.98% 88.92% 54.62% 16.23%
Total Liabilities 122.47% 101.41% 64.18% 49.70%
Net Worth -22.47% -1.41% 35.82% 50.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.08% 85.08% 85.08% 100.00%
Selling, General & Administrative Expenses 182.70% 80.02% 75.09% 84.88%
Advertising Expenses 0.00% 0.00% 0.00% 1.01%
Profit Before Interest and Taxes -88.46% 9.73% 15.97% 1.94%
Main Ratios
Current 0.79 2.63 4.23 1.73
Quick 0.40 1.09 3.51 1.33
Total Debt to Total Assets 122.47% 101.41% 64.18% 3.77%
Pre-tax Return on Net Worth 589.49% -2035.50% 147.36% 57.72%
Pre-tax Return on Assets -132.49% 28.77% 52.78% 8.92%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -97.62% 5.07% 9.99% n.a
Return on Equity 0.00% 0.00% 103.15% n.a
Activity Ratios
Inventory Turnover 9.37 5.28 4.95 n.a
Accounts Payable Turnover 9.72 12.17 12.17 n.a
Payment Days 27 25 31 n.a
Total Asset Turnover 1.36 3.97 3.70 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 1.79 n.a
Current Liab. to Liab. 0.07 0.12 0.15 n.a
Liquidity Ratios
Net Working Capital ($922) $10,945 $20,724 n.a
Interest Coverage -9.66 3.90 9.40 n.a
Additional Ratios
Assets to Sales 0.74 0.25 0.27 n.a
Current Debt/Total Assets 8% 12% 10% n.a
Acid Test 0.40 1.09 3.51 n.a
Sales/Net Worth 0.00 0.00 10.32 n.a
Dividend Payout 0.00 0.00 0.00 n.a