The Two Wheeled Oracle
Financial Plan
The following sections will outline the important financial data.
7.1 Important Assumptions
The following table details important financial assumptions for The Oracle.
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 The Oracle will need to achieve in monthly revenue to reach their break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $19,155 |
Assumptions: | |
Average Percent Variable Cost | 2% |
Estimated Monthly Fixed Cost | $18,772 |
7.3 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 | $173,300 | $285,712 | $306,679 |
Direct Cost of Sales | $3,466 | $5,714 | $6,134 |
Other | $0 | $0 | $0 |
Total Cost of Sales | $3,466 | $5,714 | $6,134 |
Gross Margin | $169,834 | $279,998 | $300,545 |
Gross Margin % | 98.00% | 98.00% | 98.00% |
Expenses | |||
Payroll | $177,360 | $183,360 | $189,360 |
Sales and Marketing and Other Expenses | $3,000 | $3,000 | $3,000 |
Depreciation | $1,500 | $1,500 | $1,500 |
Cellular service | $4,200 | $4,200 | $4,200 |
Utilities | $1,200 | $1,200 | $1,200 |
Insurance | $1,800 | $1,800 | $1,800 |
Rent | $9,600 | $9,000 | $9,000 |
Payroll Taxes | $26,604 | $27,504 | $28,404 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $225,264 | $231,564 | $238,464 |
Profit Before Interest and Taxes | ($55,430) | $48,434 | $62,081 |
EBITDA | ($53,930) | $49,934 | $63,581 |
Interest Expense | $4,517 | $3,596 | $2,546 |
Taxes Incurred | $0 | $11,210 | $15,132 |
Net Profit | ($59,947) | $33,629 | $44,404 |
Net Profit/Sales | -34.59% | 11.77% | 14.48% |
7.4 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 | $43,325 | $71,428 | $76,670 |
Cash from Receivables | $96,883 | $192,819 | $226,006 |
Subtotal Cash from Operations | $140,208 | $264,247 | $302,675 |
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 | $140,208 | $264,247 | $302,675 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $177,360 | $183,360 | $189,360 |
Bill Payments | $49,882 | $66,203 | $71,071 |
Subtotal Spent on Operations | $227,242 | $249,563 | $260,431 |
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 | $9,055 | $9,976 | $11,026 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $236,297 | $259,539 | $271,457 |
Net Cash Flow | ($96,089) | $4,707 | $31,218 |
Cash Balance | $5,111 | $9,818 | $41,036 |
7.5 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 | $5,111 | $9,818 | $41,036 |
Accounts Receivable | $33,092 | $54,557 | $58,561 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $38,203 | $64,375 | $99,597 |
Long-term Assets | |||
Long-term Assets | $7,500 | $7,500 | $7,500 |
Accumulated Depreciation | $1,500 | $3,000 | $4,500 |
Total Long-term Assets | $6,000 | $4,500 | $3,000 |
Total Assets | $44,203 | $68,875 | $102,597 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $4,505 | $5,525 | $5,870 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $4,505 | $5,525 | $5,870 |
Long-term Liabilities | $40,945 | $30,969 | $19,942 |
Total Liabilities | $45,450 | $36,494 | $25,812 |
Paid-in Capital | $60,000 | $60,000 | $60,000 |
Retained Earnings | ($1,300) | ($61,247) | ($27,618) |
Earnings | ($59,947) | $33,629 | $44,404 |
Total Capital | ($1,247) | $32,382 | $76,785 |
Total Liabilities and Capital | $44,203 | $68,875 | $102,597 |
Net Worth | ($1,247) | $32,382 | $76,785 |
7.6 Business Ratios
The following table contains important business ratios from the courier services industry, SIC 4513, as determined by the Standard Industry Classification (SIC) Index.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 64.87% | 7.34% | 4.50% |
Percent of Total Assets | ||||
Accounts Receivable | 74.86% | 79.21% | 57.08% | 27.40% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 21.80% |
Total Current Assets | 86.43% | 93.47% | 97.08% | 50.30% |
Long-term Assets | 13.57% | 6.53% | 2.92% | 49.70% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 10.19% | 8.02% | 5.72% | 29.80% |
Long-term Liabilities | 92.63% | 44.96% | 19.44% | 27.90% |
Total Liabilities | 102.82% | 52.99% | 25.16% | 57.70% |
Net Worth | -2.82% | 47.01% | 74.84% | 42.30% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 98.00% | 98.00% | 98.00% | 100.00% |
Selling, General & Administrative Expenses | 132.59% | 86.23% | 83.44% | 79.50% |
Advertising Expenses | 0.69% | 0.42% | 0.39% | 0.20% |
Profit Before Interest and Taxes | -31.98% | 16.95% | 20.24% | 1.30% |
Main Ratios | ||||
Current | 8.48 | 11.65 | 16.97 | 1.64 |
Quick | 8.48 | 11.65 | 16.97 | 1.43 |
Total Debt to Total Assets | 102.82% | 52.99% | 25.16% | 57.70% |
Pre-tax Return on Net Worth | 4807.12% | 138.47% | 77.54% | 2.50% |
Pre-tax Return on Assets | -135.62% | 65.10% | 58.03% | 5.90% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -34.59% | 11.77% | 14.48% | n.a |
Return on Equity | 0.00% | 103.85% | 57.83% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 3.93 | 3.93 | 3.93 | n.a |
Collection Days | 56 | 75 | 90 | n.a |
Accounts Payable Turnover | 12.07 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 27 | 29 | n.a |
Total Asset Turnover | 3.92 | 4.15 | 2.99 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.00 | 1.13 | 0.34 | n.a |
Current Liab. to Liab. | 0.10 | 0.15 | 0.23 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $33,698 | $58,850 | $93,728 | n.a |
Interest Coverage | -12.27 | 13.47 | 24.39 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.26 | 0.24 | 0.33 | n.a |
Current Debt/Total Assets | 10% | 8% | 6% | n.a |
Acid Test | 1.13 | 1.78 | 6.99 | n.a |
Sales/Net Worth | 0.00 | 8.82 | 3.99 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |