Oasis Juice

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Wholesale Juice Business Plan

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Financial Plan

The following is the financial plan for Oasis Juice.

7.1 Break-even Analysis

The monthly break-even point is $66,534.

Break-even Analysis
Monthly Revenue Break-even $66,534
Assumptions:
Average Percent Variable Cost 27%
Estimated Monthly Fixed Cost $48,400

7.2 Projected Profit and Loss

The following table and charts are the projected profit and loss for three years.

Pro Forma Profit and Loss
2002 2003 2004
Sales $1,020,000 $1,200,000 $1,300,000
Direct Cost of Sales $278,000 $310,000 $360,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $278,000 $310,000 $360,000
Gross Margin $742,000 $890,000 $940,000
Gross Margin % 72.75% 74.17% 72.31%
Expenses
Payroll $384,000 $416,000 $448,000
Sales and Marketing and Other Expenses $72,000 $132,000 $132,000
Depreciation $9,600 $9,600 $9,600
Leased Equipment $0 $0 $0
Utilities $12,000 $12,000 $12,000
Insurance $9,600 $9,600 $9,600
Rent $36,000 $36,000 $36,000
Payroll Taxes $57,600 $62,400 $67,200
Other $0 $0 $0
Total Operating Expenses $580,800 $677,600 $714,400
Profit Before Interest and Taxes $161,200 $212,400 $225,600
EBITDA $170,800 $222,000 $235,200
Interest Expense $9,310 $13,703 $14,203
Taxes Incurred $45,567 $59,609 $63,419
Net Profit $106,323 $139,088 $147,978
Net Profit/Sales 10.42% 11.59% 11.38%

7.3 Projected Cash Flow

The following table and chart are the projected cash flow for three years.

Pro Forma Cash Flow
2002 2003 2004
Cash Received
Cash from Operations
Cash Sales $255,000 $300,000 $325,000
Cash from Receivables $697,500 $873,971 $960,539
Subtotal Cash from Operations $952,500 $1,173,971 $1,285,539
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $100,163 $0 $0
New Other Liabilities (interest-free) $36,000 $36,000 $36,000
New Long-term Liabilities $36,000 $36,000 $36,000
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 $1,124,663 $1,245,971 $1,357,539
Expenditures 2002 2003 2004
Expenditures from Operations
Cash Spending $384,000 $416,000 $448,000
Bill Payments $511,954 $637,704 $695,324
Subtotal Spent on Operations $895,954 $1,053,704 $1,143,324
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $19,992 $19,992 $19,992
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $18,000 $18,300 $3,700
Purchase Other Current Assets $24,000 $30,000 $40,000
Purchase Long-term Assets $24,000 $30,000 $30,000
Dividends $0 $0 $0
Subtotal Cash Spent $981,946 $1,151,996 $1,237,016
Net Cash Flow $142,717 $93,975 $120,524
Cash Balance $182,717 $276,692 $397,216

7.4 Projected Balance Sheet

The following table is the projected balance sheet for three years.

Pro Forma Balance Sheet
2002 2003 2004
Assets
Current Assets
Cash $182,717 $276,692 $397,216
Accounts Receivable $147,500 $173,529 $187,990
Inventory $33,000 $36,799 $42,734
Other Current Assets $29,000 $59,000 $99,000
Total Current Assets $392,217 $546,020 $726,940
Long-term Assets
Long-term Assets $74,000 $104,000 $134,000
Accumulated Depreciation $21,600 $31,200 $40,800
Total Long-term Assets $52,400 $72,800 $93,200
Total Assets $444,617 $618,820 $820,140
Liabilities and Capital 2002 2003 2004
Current Liabilities
Accounts Payable $51,123 $52,530 $57,564
Current Borrowing $80,171 $60,179 $40,187
Other Current Liabilities $36,000 $72,000 $108,000
Subtotal Current Liabilities $167,294 $184,709 $205,751
Long-term Liabilities $58,000 $75,700 $108,000
Total Liabilities $225,294 $260,409 $313,751
Paid-in Capital $80,000 $80,000 $80,000
Retained Earnings $33,000 $139,323 $278,411
Earnings $106,323 $139,088 $147,978
Total Capital $219,323 $358,411 $506,389
Total Liabilities and Capital $444,617 $618,820 $820,140
Net Worth $219,323 $358,411 $506,389

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5149, Groceries and related products, are shown for comparison.

Ratio Analysis
2002 2003 2004 Industry Profile
Sales Growth 75.86% 17.65% 8.33% 4.60%
Percent of Total Assets
Accounts Receivable 33.17% 28.04% 22.92% 33.30%
Inventory 7.42% 5.95% 5.21% 26.00%
Other Current Assets 6.52% 9.53% 12.07% 20.90%
Total Current Assets 88.21% 88.24% 88.64% 80.20%
Long-term Assets 11.79% 11.76% 11.36% 19.80%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 37.63% 29.85% 25.09% 45.20%
Long-term Liabilities 13.04% 12.23% 13.17% 10.00%
Total Liabilities 50.67% 42.08% 38.26% 55.20%
Net Worth 49.33% 57.92% 61.74% 44.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 72.75% 74.17% 72.31% 44.10%
Selling, General & Administrative Expenses 62.32% 62.58% 60.92% 26.70%
Advertising Expenses 5.88% 10.00% 9.23% 0.70%
Profit Before Interest and Taxes 15.80% 17.70% 17.35% 0.80%
Main Ratios
Current 2.34 2.96 3.53 1.69
Quick 2.15 2.76 3.33 1.01
Total Debt to Total Assets 50.67% 42.08% 38.26% 55.20%
Pre-tax Return on Net Worth 69.25% 55.44% 41.75% 3.60%
Pre-tax Return on Assets 34.16% 32.11% 25.78% 8.00%
Additional Ratios 2002 2003 2004
Net Profit Margin 10.42% 11.59% 11.38% n.a
Return on Equity 48.48% 38.81% 29.22% n.a
Activity Ratios
Accounts Receivable Turnover 5.19 5.19 5.19 n.a
Collection Days 59 65 68 n.a
Inventory Turnover 10.91 8.88 9.05 n.a
Accounts Payable Turnover 10.62 12.17 12.17 n.a
Payment Days 28 30 29 n.a
Total Asset Turnover 2.29 1.94 1.59 n.a
Debt Ratios
Debt to Net Worth 1.03 0.73 0.62 n.a
Current Liab. to Liab. 0.74 0.71 0.66 n.a
Liquidity Ratios
Net Working Capital $224,923 $361,311 $521,189 n.a
Interest Coverage 17.31 15.50 15.88 n.a
Additional Ratios
Assets to Sales 0.44 0.52 0.63 n.a
Current Debt/Total Assets 38% 30% 25% n.a
Acid Test 1.27 1.82 2.41 n.a
Sales/Net Worth 4.65 3.35 2.57 n.a
Dividend Payout 0.00 0.00 0.00 n.a