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Farmers Group

Financial Plan

Forecast

Key Assumptions

Key Assumptions 

Nature and Limitation of Projections

This financial projection is based on sales volume at the levels described in the sales forecast section and presents, to the best of management’s knowledge, the company’s expected assets, liabilities, capital, and revenues and expenses. The projections reflect management’s judgement of the expected conditions and its expected course of action given the hypothetical assumptions.

Nature of Operations

The company is in the business of vegetable farming, greens cultivation, and composting. The company expects to be operating in 2000.

Revenues

The company’s revenue is derived primarily from the sale of vegetables, strawberries, and bagged composted manure products.

Expenses

The company’s expenses are primarily those of salaries, utilities, and insurance costs. Other expenses are based on management’s estimates and industry averages.

However, our initial projections indicate profitability well beyond realistic expectations. We’ve added a substantial "other expense" category, especially as we get on our feet in the second half of year one, to allow for realistic expenses … even if we can’t categorize them exactly. Even with these "other expenses" we are still unusually profitable, but we believe that’s because of our innovative technology. 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

The company is seeking to raise of $830,000 for the purpose of financing the acquisition of the Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm, facilities modifications, equipment, and funding operating expenses. Another $1,000,000 will be invested in the company by its four co-owners. The total is $1,830,000. The following is a breakdown of how the funds will be used:

Acquisition:

Property $1,300,000

Equipment System $400,000

Sub-total $1,700,000

Operating Expenses:

Salaries $80,000

Marketing and promotion $10,000

Other operating expenses $10,000

Sub-total $100,000

Total $1,800,000

 

Part of the $1,830,00 are the $684,600 startup expenses listed as net worth in Dec 2016. More details are: 

Legal $19,000

Facilities modification $300,000

Seed $600

Organic Herbicides/Pesticides $5,000

Consultants $25,000

Insurance $10,000

Research and development $25,000

Expensed equipment $250,000

Other $50,000

TOTAL START-UP EXPENSES $684,600

Sources of Funds

We will have four investors. Each investor has committed to giving us $250,000, totally $1,000,000. 

We will also have $400,000 in long term borrowing, we will have $400,000 in short term loan and $30,000 worth of bills to pay. 

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $714,656 $841,800 $1,035,000
Operating Expenses
Salaries & Wages $252,000 $257,040 $262,181
Employee Related Expenses $50,400 $51,408 $52,436
Marketing $15,536 $18,300 $22,500
Gas and Oil $15,536 $18,300 $22,500
Utilities $15,536 $18,300 $22,500
Insurance $5,160 $5,160 $5,160
Other $63,500 $125,000 $250,000
Amortization of Other Current Assets $0 $0 $0
Interest Incurred $39,665 $23,228 $19,670
Depreciation and Amortization $25,000 $25,000 $25,000
Gain or Loss from Sale of Assets
Income Taxes $46,465 $60,012 $70,611
Total Expenses $590,942 $674,948 $842,558
Net Profit $185,858 $240,052 $282,442

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $315,400 $54,576 $257,355 $520,604
Accounts Receivable $39,600 $54,900 $67,500
Inventory $150,000 $150,000 $150,000 $150,000
Other Current Assets $180,000 $180,000 $180,000 $180,000
Total Current Assets $645,400 $424,176 $642,255 $918,104
Long-Term Assets $500,000 $500,000 $500,000 $500,000
Accumulated Depreciation $0 ($25,000) ($50,000) ($75,000)
Total Long-Term Assets $500,000 $475,000 $450,000 $425,000
Accounts Payable $30,000 $32,299 $30,991 $49,519
Income Taxes Payable $11,517 $15,068 $17,720
Sales Taxes Payable $0 $0 $0
Short-Term Debt $445,898 $49,216 $52,774 $56,589
Prepaid Revenue
Total Current Liabilities $475,898 $93,032 $98,833 $123,828
Long-Term Debt $354,102 $304,886 $252,112 $195,523
Long-Term Liabilities $354,102 $304,886 $252,112 $195,523
Paid-In Capital $1,000,000 $1,000,000 $1,000,000 $1,000,000
Retained Earnings ($684,600) ($684,600) ($498,742) ($258,690)
Earnings $185,858 $240,052 $282,442

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit $185,858 $240,052 $282,442
Depreciation & Amortization $25,000 $25,000 $25,000
Change in Accounts Receivable ($39,600) ($15,300) ($12,600)
Change in Inventory $0 $0 $0
Change in Accounts Payable $2,299 ($1,308) $18,528
Change in Income Tax Payable $11,517 $3,551 $2,652
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt ($396,682) $3,558 $3,815
Change in Long-Term Debt ($49,216) ($52,774) ($56,589)
Cash at Beginning of Period $315,400 $54,576 $257,355
Net Change in Cash ($260,824) $202,779 $263,248