Artemide Auditing & Consulting AG
Financial Plan
The following sections include the annual estimates for the standard set of financial tables. Detailed monthly pro-forma tables are included in the appendix.
7.1 Important Assumptions
This information is presented in the table below.
General Assumptions | |||
2003 | 2004 | 2005 | |
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 | 25.00% | 25.00% | 25.00% |
Other | 0 | 0 | 0 |
7.2 Key Financial Indicators
The Benchmark chart below uses index values to compare past and future financial indicators. The bars show relative change, not absolute values.

7.3 Break-even Analysis
With our average monthly fixed costs, Artemide will surpass break even consistently throughout the next year of operations.

Break-even Analysis | |
Monthly Revenue Break-even | $9,744 |
Assumptions: | |
Average Percent Variable Cost | 16% |
Estimated Monthly Fixed Cost | $8,185 |
7.4 Projected Profit and Loss
The projected profit and loss information is presented in the table and charts below.




Pro Forma Profit and Loss | |||
2003 | 2004 | 2005 | |
Sales | $160,977 | $193,172 | $231,807 |
Direct Cost of Sales | $25,758 | $29,622 | $34,065 |
Other | $0 | $0 | $0 |
Total Cost of Sales | $25,758 | $29,622 | $34,065 |
Gross Margin | $135,219 | $163,551 | $197,742 |
Gross Margin % | 84.00% | 84.67% | 85.30% |
Expenses | |||
Payroll | $72,000 | $77,000 | $86,000 |
Sales and Marketing and Other Expenses | $6,897 | $9,500 | $13,000 |
Depreciation | $2,400 | $2,500 | $2,500 |
Leased Equipment (incl. office rental) | $2,400 | $2,500 | $3,000 |
Utilities (incl. office furniture, etc.) | $1,800 | $2,000 | $2,500 |
Insurance | $1,200 | $1,500 | $2,000 |
Rent | $0 | $0 | $0 |
Payroll Taxes | $11,520 | $12,320 | $13,760 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $98,217 | $107,320 | $122,760 |
Profit Before Interest and Taxes | $37,003 | $56,231 | $74,982 |
EBITDA | $39,403 | $58,731 | $77,482 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $9,251 | $14,058 | $18,745 |
Net Profit | $27,752 | $42,173 | $56,236 |
Net Profit/Sales | 17.24% | 21.83% | 24.26% |
7.5 Projected Cash Flow
The projected cash flow and cash balance information is presented in the chart and table below.

Pro Forma Cash Flow | |||
2003 | 2004 | 2005 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $0 | $0 | $0 |
Cash from Receivables | $149,782 | $188,617 | $226,341 |
Subtotal Cash from Operations | $149,782 | $188,617 | $226,341 |
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 | $149,782 | $188,617 | $226,341 |
Expenditures | 2003 | 2004 | 2005 |
Expenditures from Operations | |||
Cash Spending | $72,000 | $77,000 | $86,000 |
Bill Payments | $66,312 | $69,717 | $85,791 |
Subtotal Spent on Operations | $138,312 | $146,717 | $171,791 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $2,895 | $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 | $24,000 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $165,207 | $146,717 | $171,791 |
Net Cash Flow | ($15,425) | $41,901 | $54,550 |
Cash Balance | $77,226 | $119,126 | $173,676 |
7.6 Projected Balance Sheet
The projected balance sheet information is presented in the table below.
Pro Forma Balance Sheet | |||
2003 | 2004 | 2005 | |
Assets | |||
Current Assets | |||
Cash | $77,226 | $119,126 | $173,676 |
Accounts Receivable | $22,776 | $27,331 | $32,797 |
Other Current Assets | $1,158 | $1,158 | $1,158 |
Total Current Assets | $101,160 | $147,616 | $207,632 |
Long-term Assets | |||
Long-term Assets | $30,948 | $30,948 | $30,948 |
Accumulated Depreciation | $2,400 | $4,900 | $7,400 |
Total Long-term Assets | $28,548 | $26,048 | $23,548 |
Total Assets | $129,708 | $173,664 | $231,180 |
Liabilities and Capital | 2003 | 2004 | 2005 |
Current Liabilities | |||
Accounts Payable | $4,094 | $5,877 | $7,156 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $4,094 | $5,877 | $7,156 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $4,094 | $5,877 | $7,156 |
Paid-in Capital | $5,000 | $5,000 | $5,000 |
Retained Earnings | $92,862 | $120,614 | $162,787 |
Earnings | $27,752 | $42,173 | $56,236 |
Total Capital | $125,614 | $167,787 | $224,023 |
Total Liabilities and Capital | $129,708 | $173,664 | $231,180 |
Net Worth | $125,614 | $167,787 | $224,023 |
7.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8721.01 – Auditing services, are shown for comparison.
Ratio Analysis | ||||
2003 | 2004 | 2005 | Industry Profile | |
Sales Growth | -0.72% | 20.00% | 20.00% | 8.60% |
Percent of Total Assets | ||||
Accounts Receivable | 17.56% | 15.74% | 14.19% | 24.40% |
Other Current Assets | 0.89% | 0.67% | 0.50% | 46.70% |
Total Current Assets | 77.99% | 85.00% | 89.81% | 74.90% |
Long-term Assets | 22.01% | 15.00% | 10.19% | 25.10% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 3.16% | 3.38% | 3.10% | 42.80% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 17.20% |
Total Liabilities | 3.16% | 3.38% | 3.10% | 60.00% |
Net Worth | 96.84% | 96.62% | 96.90% | 40.00% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 84.00% | 84.67% | 85.30% | 0.00% |
Selling, General & Administrative Expenses | 66.89% | 62.95% | 61.14% | 83.50% |
Advertising Expenses | 2.05% | 2.07% | 2.59% | 1.20% |
Profit Before Interest and Taxes | 22.99% | 29.11% | 32.35% | 2.60% |
Main Ratios | ||||
Current | 24.71 | 25.12 | 29.01 | 1.59 |
Quick | 24.71 | 25.12 | 29.01 | 1.26 |
Total Debt to Total Assets | 3.16% | 3.38% | 3.10% | 60.00% |
Pre-tax Return on Net Worth | 29.46% | 33.51% | 33.47% | 4.40% |
Pre-tax Return on Assets | 28.53% | 32.38% | 32.43% | 10.90% |
Additional Ratios | 2003 | 2004 | 2005 | |
Net Profit Margin | 17.24% | 21.83% | 24.26% | n.a |
Return on Equity | 22.09% | 25.13% | 25.10% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 7.07 | 7.07 | 7.07 | n.a |
Collection Days | 59 | 47 | 47 | n.a |
Accounts Payable Turnover | 14.37 | 12.17 | 12.17 | n.a |
Payment Days | 33 | 25 | 27 | n.a |
Total Asset Turnover | 1.24 | 1.11 | 1.00 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.03 | 0.04 | 0.03 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $97,066 | $141,739 | $200,475 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.81 | 0.90 | 1.00 | n.a |
Current Debt/Total Assets | 3% | 3% | 3% | n.a |
Acid Test | 19.15 | 20.47 | 24.43 | n.a |
Sales/Net Worth | 1.28 | 1.15 | 1.03 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |