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
Expenses by Month
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 | |
---|---|---|---|
Revenue | $776,800 | $915,000 | $1,125,000 |
Direct Costs | $62,144 | $73,200 | $90,000 |
Gross Margin | $714,656 | $841,800 | $1,035,000 |
Gross Margin % | 92% | 92% | 92% |
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 |
Total Operating Expenses | $417,668 | $493,508 | $637,277 |
Operating Income | $296,988 | $348,292 | $397,723 |
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 |
Net Profit/Sales | 24% | 26% | 25% |
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 |
Total Assets | $1,145,400 | $899,176 | $1,092,255 | $1,343,104 |
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 |
Total Liabilities | $830,000 | $397,918 | $350,945 | $319,352 |
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 | |
Total Owner’s Equity | $315,400 | $501,258 | $741,310 | $1,023,752 |
Total Liabilities & Equity | $1,145,400 | $899,176 | $1,092,255 | $1,343,104 |
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 | |||
Net Cash Flow from Operations | $185,074 | $251,995 | $316,022 |
Investing & Financing | |||
Assets Purchased or Sold | |||
Net Cash from Investing | |||
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) |
Net Cash from Financing | ($445,898) | ($49,216) | ($52,774) |
Cash at Beginning of Period | $315,400 | $54,576 | $257,355 |
Net Change in Cash | ($260,824) | $202,779 | $263,248 |
Cash at End of Period | $54,576 | $257,355 | $520,604 |