Yoga Center Business Plan

Garden Way Yoga Center

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Financial Plan

The following is the financial plan for Garden Way Yoga Center.

7.1 Break-even Analysis

The monthly break-even point is $14,492.

Break-even Analysis
Monthly Revenue Break-even $14,492
Assumptions:
Average Percent Variable Cost 9%
Estimated Monthly Fixed Cost $13,140

7.2 Projected Profit and Loss

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

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $216,000 $275,000 $346,000
Direct Cost of Sales $20,150 $26,000 $32,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $20,150 $26,000 $32,000
Gross Margin $195,850 $249,000 $314,000
Gross Margin % 90.67% 90.55% 90.75%
Expenses
Payroll $109,200 $123,000 $139,000
Sales and Marketing and Other Expenses $24,000 $26,000 $28,000
Depreciation $2,400 $2,400 $2,400
Utilities $3,300 $3,300 $3,300
Insurance $2,400 $2,400 $2,400
Payroll Taxes $16,380 $18,450 $20,850
Other $0 $0 $0
Total Operating Expenses $157,680 $175,550 $195,950
Profit Before Interest and Taxes $38,170 $73,450 $118,050
EBITDA $40,570 $75,850 $120,450
Interest Expense $7,721 $7,226 $6,710
Taxes Incurred $9,135 $19,867 $33,402
Net Profit $21,315 $46,357 $77,938
Net Profit/Sales 9.87% 16.86% 22.53%

7.3 Projected Cash Flow

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

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $216,000 $275,000 $346,000
Subtotal Cash from Operations $216,000 $275,000 $346,000
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 $216,000 $275,000 $346,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $109,200 $123,000 $139,000
Bill Payments $65,490 $105,836 $125,554
Subtotal Spent on Operations $174,690 $228,836 $264,554
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 $5,160 $5,160 $5,160
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $179,850 $233,996 $269,714
Net Cash Flow $36,150 $41,004 $76,286
Cash Balance $103,050 $144,054 $220,340

7.4 Projected Balance Sheet

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

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $103,050 $144,054 $220,340
Inventory $2,750 $3,548 $4,367
Other Current Assets $0 $0 $0
Total Current Assets $105,800 $147,603 $224,707
Long-term Assets
Long-term Assets $30,000 $30,000 $30,000
Accumulated Depreciation $2,400 $4,800 $7,200
Total Long-term Assets $27,600 $25,200 $22,800
Total Assets $133,400 $172,803 $247,507
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $10,345 $8,551 $10,478
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $10,345 $8,551 $10,478
Long-term Liabilities $74,840 $69,680 $64,520
Total Liabilities $85,185 $78,231 $74,998
Paid-in Capital $60,000 $60,000 $60,000
Retained Earnings ($33,100) ($11,785) $34,571
Earnings $21,315 $46,357 $77,938
Total Capital $48,215 $94,571 $172,509
Total Liabilities and Capital $133,400 $172,803 $247,507
Net Worth $48,215 $94,571 $172,509

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 7997, Membership Sport and Recreation Club, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 27.31% 25.82% 15.20%
Percent of Total Assets
Inventory 2.06% 2.05% 1.76% 4.00%
Other Current Assets 0.00% 0.00% 0.00% 31.80%
Total Current Assets 79.31% 85.42% 90.79% 40.90%
Long-term Assets 20.69% 14.58% 9.21% 59.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.76% 4.95% 4.23% 31.60%
Long-term Liabilities 56.10% 40.32% 26.07% 28.00%
Total Liabilities 63.86% 45.27% 30.30% 59.60%
Net Worth 36.14% 54.73% 69.70% 40.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 90.67% 90.55% 90.75% 0.00%
Selling, General & Administrative Expenses 80.80% 73.69% 68.23% 72.30%
Advertising Expenses 2.78% 2.91% 2.89% 2.70%
Profit Before Interest and Taxes 17.67% 26.71% 34.12% 2.60%
Main Ratios
Current 10.23 17.26 21.45 1.23
Quick 9.96 16.85 21.03 0.83
Total Debt to Total Assets 63.86% 45.27% 30.30% 59.60%
Pre-tax Return on Net Worth 63.15% 70.03% 64.54% 2.80%
Pre-tax Return on Assets 22.83% 38.32% 44.98% 6.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 9.87% 16.86% 22.53% n.a
Return on Equity 44.21% 49.02% 45.18% n.a
Activity Ratios
Inventory Turnover 3.95 8.26 8.09 n.a
Accounts Payable Turnover 7.33 12.17 12.17 n.a
Payment Days 27 33 27 n.a
Total Asset Turnover 1.62 1.59 1.40 n.a
Debt Ratios
Debt to Net Worth 1.77 0.83 0.43 n.a
Current Liab. to Liab. 0.12 0.11 0.14 n.a
Liquidity Ratios
Net Working Capital $95,455 $139,051 $214,229 n.a
Interest Coverage 4.94 10.16 17.59 n.a
Additional Ratios
Assets to Sales 0.62 0.63 0.72 n.a
Current Debt/Total Assets 8% 5% 4% n.a
Acid Test 9.96 16.85 21.03 n.a
Sales/Net Worth 4.48 2.91 2.01 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Break-even Analysis
Monthly Revenue Break-even $14,492
Assumptions:
Average Percent Variable Cost 9%
Estimated Monthly Fixed Cost $13,140
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $216,000 $275,000 $346,000
Direct Cost of Sales $20,150 $26,000 $32,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $20,150 $26,000 $32,000
Gross Margin $195,850 $249,000 $314,000
Gross Margin % 90.67% 90.55% 90.75%
Expenses
Payroll $109,200 $123,000 $139,000
Sales and Marketing and Other Expenses $24,000 $26,000 $28,000
Depreciation $2,400 $2,400 $2,400
Utilities $3,300 $3,300 $3,300
Insurance $2,400 $2,400 $2,400
Payroll Taxes $16,380 $18,450 $20,850
Other $0 $0 $0
Total Operating Expenses $157,680 $175,550 $195,950
Profit Before Interest and Taxes $38,170 $73,450 $118,050
EBITDA $40,570 $75,850 $120,450
Interest Expense $7,721 $7,226 $6,710
Taxes Incurred $9,135 $19,867 $33,402
Net Profit $21,315 $46,357 $77,938
Net Profit/Sales 9.87% 16.86% 22.53%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $216,000 $275,000 $346,000
Subtotal Cash from Operations $216,000 $275,000 $346,000
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 $216,000 $275,000 $346,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $109,200 $123,000 $139,000
Bill Payments $65,490 $105,836 $125,554
Subtotal Spent on Operations $174,690 $228,836 $264,554
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 $5,160 $5,160 $5,160
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $179,850 $233,996 $269,714
Net Cash Flow $36,150 $41,004 $76,286
Cash Balance $103,050 $144,054 $220,340
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $103,050 $144,054 $220,340
Inventory $2,750 $3,548 $4,367
Other Current Assets $0 $0 $0
Total Current Assets $105,800 $147,603 $224,707
Long-term Assets
Long-term Assets $30,000 $30,000 $30,000
Accumulated Depreciation $2,400 $4,800 $7,200
Total Long-term Assets $27,600 $25,200 $22,800
Total Assets $133,400 $172,803 $247,507
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $10,345 $8,551 $10,478
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $10,345 $8,551 $10,478
Long-term Liabilities $74,840 $69,680 $64,520
Total Liabilities $85,185 $78,231 $74,998
Paid-in Capital $60,000 $60,000 $60,000
Retained Earnings ($33,100) ($11,785) $34,571
Earnings $21,315 $46,357 $77,938
Total Capital $48,215 $94,571 $172,509
Total Liabilities and Capital $133,400 $172,803 $247,507
Net Worth $48,215 $94,571 $172,509
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 27.31% 25.82% 15.20%
Percent of Total Assets
Inventory 2.06% 2.05% 1.76% 4.00%
Other Current Assets 0.00% 0.00% 0.00% 31.80%
Total Current Assets 79.31% 85.42% 90.79% 40.90%
Long-term Assets 20.69% 14.58% 9.21% 59.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.76% 4.95% 4.23% 31.60%
Long-term Liabilities 56.10% 40.32% 26.07% 28.00%
Total Liabilities 63.86% 45.27% 30.30% 59.60%
Net Worth 36.14% 54.73% 69.70% 40.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 90.67% 90.55% 90.75% 0.00%
Selling, General & Administrative Expenses 80.80% 73.69% 68.23% 72.30%
Advertising Expenses 2.78% 2.91% 2.89% 2.70%
Profit Before Interest and Taxes 17.67% 26.71% 34.12% 2.60%
Main Ratios
Current 10.23 17.26 21.45 1.23
Quick 9.96 16.85 21.03 0.83
Total Debt to Total Assets 63.86% 45.27% 30.30% 59.60%
Pre-tax Return on Net Worth 63.15% 70.03% 64.54% 2.80%
Pre-tax Return on Assets 22.83% 38.32% 44.98% 6.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 9.87% 16.86% 22.53% n.a
Return on Equity 44.21% 49.02% 45.18% n.a
Activity Ratios
Inventory Turnover 3.95 8.26 8.09 n.a
Accounts Payable Turnover 7.33 12.17 12.17 n.a
Payment Days 27 33 27 n.a
Total Asset Turnover 1.62 1.59 1.40 n.a
Debt Ratios
Debt to Net Worth 1.77 0.83 0.43 n.a
Current Liab. to Liab. 0.12 0.11 0.14 n.a
Liquidity Ratios
Net Working Capital $95,455 $139,051 $214,229 n.a
Interest Coverage 4.94 10.16 17.59 n.a
Additional Ratios
Assets to Sales 0.62 0.63 0.72 n.a
Current Debt/Total Assets 8% 5% 4% n.a
Acid Test 9.96 16.85 21.03 n.a
Sales/Net Worth 4.48 2.91 2.01 n.a
Dividend Payout 0.00 0.00 0.00 n.a