Premier Airport Transportation Service
Financial Plan
The following sections will detail important financial information.
7.1 Important Assumptions
The following table highlights some of the important financial assumptions for PATS.
| 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 | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
7.2 Break-even Analysis
The Break-even Analysis indicates what PATS must have in averaged monthly revenue to break even.
| Break-even Analysis | |
| Monthly Revenue Break-even | $15,131 |
| Assumptions: | |
| Average Percent Variable Cost | 20% |
| Estimated Monthly Fixed Cost | $12,105 |
7.3 Projected Profit and Loss
The following table presents the projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $168,824 | $282,759 | $319,748 |
| Direct Cost of Sales | $33,765 | $56,552 | $63,950 |
| Other | $0 | $0 | $0 |
| Total Cost of Sales | $33,765 | $56,552 | $63,950 |
| Gross Margin | $135,059 | $226,207 | $255,798 |
| Gross Margin % | 80.00% | 80.00% | 80.00% |
| Expenses | |||
| Payroll | $111,700 | $138,900 | $138,900 |
| Sales and Marketing and Other Expenses | $3,100 | $3,600 | $3,600 |
| Depreciation | $504 | $498 | $498 |
| Web site maintenance | $600 | $600 | $600 |
| Utilities | $1,200 | $1,200 | $1,200 |
| Insurance | $5,400 | $5,400 | $5,400 |
| Rent | $6,000 | $0 | $0 |
| Payroll Taxes | $16,755 | $20,835 | $20,835 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $145,259 | $171,033 | $171,033 |
| Profit Before Interest and Taxes | ($10,200) | $55,174 | $84,765 |
| EBITDA | ($9,696) | $55,672 | $85,263 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $13,794 | $21,545 |
| Net Profit | ($10,200) | $41,381 | $63,221 |
| Net Profit/Sales | -6.04% | 14.63% | 19.77% |
7.4 Projected Cash Flow
The following chart and table display the projected cash flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $168,824 | $282,759 | $319,748 |
| Subtotal Cash from Operations | $168,824 | $282,759 | $319,748 |
| 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 | $168,824 | $282,759 | $319,748 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $111,700 | $138,900 | $138,900 |
| Bill Payments | $57,893 | $102,525 | $115,884 |
| Subtotal Spent on Operations | $169,593 | $241,425 | $254,784 |
| 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 | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $169,593 | $241,425 | $254,784 |
| Net Cash Flow | ($769) | $41,334 | $64,964 |
| Cash Balance | $30,206 | $71,540 | $136,504 |
7.5 Projected Balance Sheet
The following table details the projected balance sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $30,206 | $71,540 | $136,504 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $30,206 | $71,540 | $136,504 |
| Long-term Assets | |||
| Long-term Assets | $1,500 | $1,500 | $1,500 |
| Accumulated Depreciation | $504 | $1,002 | $1,500 |
| Total Long-term Assets | $996 | $498 | $0 |
| Total Assets | $31,202 | $72,038 | $136,504 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $8,927 | $8,382 | $9,627 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $8,927 | $8,382 | $9,627 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $8,927 | $8,382 | $9,627 |
| Paid-in Capital | $35,000 | $35,000 | $35,000 |
| Retained Earnings | ($2,525) | ($12,725) | $28,656 |
| Earnings | ($10,200) | $41,381 | $63,221 |
| Total Capital | $22,275 | $63,656 | $126,877 |
| Total Liabilities and Capital | $31,202 | $72,038 | $136,504 |
| Net Worth | $22,275 | $63,656 | $126,877 |
7.6 Business Ratios
The business ratios table below is generated by the planning software using the interconnected tables. Standard industry ratios, based upon Standard Industrial Classification Code (SIC) 4111, Local and Suburban Transit, are shown for comparison.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 67.49% | 13.08% | 3.70% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 45.30% |
| Total Current Assets | 96.81% | 99.31% | 100.00% | 64.40% |
| Long-term Assets | 3.19% | 0.69% | 0.00% | 35.60% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 28.61% | 11.64% | 7.05% | 31.20% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.20% |
| Total Liabilities | 28.61% | 11.64% | 7.05% | 56.40% |
| Net Worth | 71.39% | 88.36% | 92.95% | 43.60% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 80.00% | 80.00% | 80.00% | 66.70% |
| Selling, General & Administrative Expenses | 86.04% | 65.37% | 60.12% | 46.50% |
| Advertising Expenses | 0.36% | 0.21% | 0.19% | 0.50% |
| Profit Before Interest and Taxes | -6.04% | 19.51% | 26.51% | 2.90% |
| Main Ratios | ||||
| Current | 3.38 | 8.53 | 14.18 | 1.61 |
| Quick | 3.38 | 8.53 | 14.18 | 1.17 |
| Total Debt to Total Assets | 28.61% | 11.64% | 7.05% | 56.40% |
| Pre-tax Return on Net Worth | -45.79% | 86.68% | 66.81% | 4.60% |
| Pre-tax Return on Assets | -32.69% | 76.59% | 62.10% | 10.50% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -6.04% | 14.63% | 19.77% | n.a |
| Return on Equity | -45.79% | 65.01% | 49.83% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 7.49 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 31 | 28 | n.a |
| Total Asset Turnover | 5.41 | 3.93 | 2.34 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.40 | 0.13 | 0.08 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $21,279 | $63,158 | $126,877 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.18 | 0.25 | 0.43 | n.a |
| Current Debt/Total Assets | 29% | 12% | 7% | n.a |
| Acid Test | 3.38 | 8.53 | 14.18 | n.a |
| Sales/Net Worth | 7.58 | 4.44 | 2.52 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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