Portland Mobile Auto Inspectors
Financial Plan
The following sections will outline important financial information.
8.1 Important Assumptions
The following table details important financial assumptions.
| 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 | 30.00% | 30.00% | 30.00% |
| Other | 0 | 0 | 0 |
8.2 Projected Profit and Loss
The following table will indicate projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $51,900 | $87,000 | $93,000 |
| Direct Cost of Sales | $3,633 | $6,090 | $6,510 |
| Other Production Expenses | $0 | $0 | $0 |
| Total Cost of Sales | $3,633 | $6,090 | $6,510 |
| Gross Margin | $48,267 | $80,910 | $86,490 |
| Gross Margin % | 93.00% | 93.00% | 93.00% |
| Expenses | |||
| Payroll | $36,000 | $54,000 | $66,000 |
| Sales and Marketing and Other Expenses | $1,200 | $1,200 | $1,200 |
| Depreciation | $3,804 | $3,804 | $3,804 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $1,500 | $1,500 | $1,500 |
| Insurance | $1,200 | $1,200 | $1,200 |
| Rent | $0 | $0 | $0 |
| Payroll Taxes | $0 | $0 | $0 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $43,704 | $61,704 | $73,704 |
| Profit Before Interest and Taxes | $4,563 | $19,206 | $12,786 |
| EBITDA | $8,367 | $23,010 | $16,590 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $1,369 | $5,762 | $3,836 |
| Net Profit | $3,194 | $13,444 | $8,950 |
| Net Profit/Sales | 6.15% | 15.45% | 9.62% |
8.3 Break-even Analysis
The Break-even Analysis indicates that $4,400 will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $3,916 |
| Assumptions: | |
| Average Percent Variable Cost | 7% |
| Estimated Monthly Fixed Cost | $3,642 |
8.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $51,900 | $87,000 | $93,000 |
| Subtotal Cash from Operations | $51,900 | $87,000 | $93,000 |
| 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 | $51,900 | $87,000 | $93,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $36,000 | $54,000 | $66,000 |
| Bill Payments | $5,765 | $17,594 | $14,370 |
| Subtotal Spent on Operations | $41,765 | $71,594 | $80,370 |
| 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 | $41,765 | $71,594 | $80,370 |
| Net Cash Flow | $10,135 | $15,406 | $12,630 |
| Cash Balance | $21,635 | $37,041 | $49,671 |
8.5 Projected Balance Sheet
The following table will indicate the projected balance sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $21,635 | $37,041 | $49,671 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $21,635 | $37,041 | $49,671 |
| Long-term Assets | |||
| Long-term Assets | $19,000 | $19,000 | $19,000 |
| Accumulated Depreciation | $3,804 | $7,608 | $11,412 |
| Total Long-term Assets | $15,196 | $11,392 | $7,588 |
| Total Assets | $36,831 | $48,433 | $57,259 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $3,137 | $1,295 | $1,171 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $3,137 | $1,295 | $1,171 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $3,137 | $1,295 | $1,171 |
| Paid-in Capital | $32,000 | $32,000 | $32,000 |
| Retained Earnings | ($1,500) | $1,694 | $15,138 |
| Earnings | $3,194 | $13,444 | $8,950 |
| Total Capital | $33,694 | $47,138 | $56,089 |
| Total Liabilities and Capital | $36,831 | $48,433 | $57,259 |
| Net Worth | $33,694 | $47,138 | $56,088 |
8.6 Business Ratios
The following table shows our ratios comparison to our industry classification, Automotive services, nec (SIC#7549).
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 67.63% | 6.90% | 6.10% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 30.69% |
| Total Current Assets | 58.74% | 76.48% | 86.75% | 55.12% |
| Long-term Assets | 41.26% | 23.52% | 13.25% | 44.88% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 8.52% | 2.67% | 2.04% | 21.25% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 29.25% |
| Total Liabilities | 8.52% | 2.67% | 2.04% | 50.50% |
| Net Worth | 91.48% | 97.33% | 97.96% | 49.50% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 93.00% | 93.00% | 93.00% | 100.00% |
| Selling, General & Administrative Expenses | 95.77% | 67.89% | 65.31% | 74.40% |
| Advertising Expenses | 2.31% | 1.38% | 1.29% | 1.76% |
| Profit Before Interest and Taxes | 8.79% | 22.08% | 13.75% | 2.09% |
| Main Ratios | ||||
| Current | 6.90 | 28.61 | 42.42 | 2.06 |
| Quick | 6.90 | 28.61 | 42.42 | 1.37 |
| Total Debt to Total Assets | 8.52% | 2.67% | 2.04% | 54.70% |
| Pre-tax Return on Net Worth | 13.54% | 40.74% | 22.80% | 6.05% |
| Pre-tax Return on Assets | 12.39% | 39.65% | 22.33% | 13.36% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 6.15% | 15.45% | 9.62% | n.a |
| Return on Equity | 9.48% | 28.52% | 15.96% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 2.84 | 12.17 | 12.17 | n.a |
| Payment Days | 70 | 51 | 32 | n.a |
| Total Asset Turnover | 1.41 | 1.80 | 1.62 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.09 | 0.03 | 0.02 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $18,498 | $35,746 | $48,500 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.71 | 0.56 | 0.62 | n.a |
| Current Debt/Total Assets | 9% | 3% | 2% | n.a |
| Acid Test | 6.90 | 28.61 | 42.42 | n.a |
| Sales/Net Worth | 1.54 | 1.85 | 1.66 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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