ToyLearn
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 Break-even Analysis
The Break-even Analysis indicates that $30,290 will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $18,596 |
| Assumptions: | |
| Average Percent Variable Cost | 40% |
| Estimated Monthly Fixed Cost | $11,158 |
8.3 Projected Profit and Loss
The following table and charts will indicate Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $124,505 | $367,556 | $475,601 |
| Direct Cost of Sales | $49,802 | $147,022 | $190,240 |
| Other Costs of Goods | $0 | $0 | $0 |
| Total Cost of Sales | $49,802 | $147,022 | $190,240 |
| Gross Margin | $74,703 | $220,534 | $285,361 |
| Gross Margin % | 60.00% | 60.00% | 60.00% |
| Expenses | |||
| Payroll | $98,000 | $128,000 | $156,000 |
| Sales and Marketing and Other Expenses | $4,200 | $4,200 | $4,200 |
| Depreciation | $1,992 | $1,992 | $1,992 |
| Rent | $7,200 | $7,200 | $7,200 |
| Utilities | $3,600 | $3,600 | $3,600 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Payroll Taxes | $14,700 | $19,200 | $23,400 |
| Other | $1,200 | $1,200 | $1,200 |
| Total Operating Expenses | $133,892 | $168,392 | $200,592 |
| Profit Before Interest and Taxes | ($59,189) | $52,142 | $84,769 |
| EBITDA | ($57,197) | $54,134 | $86,761 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $15,642 | $25,431 |
| Net Profit | ($59,189) | $36,499 | $59,338 |
| Net Profit/Sales | -47.54% | 9.93% | 12.48% |
8.4 Projected Cash Flow
The following table and chart will indicate Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $31,126 | $91,889 | $118,900 |
| Cash from Receivables | $66,011 | $222,242 | $332,951 |
| Subtotal Cash from Operations | $97,137 | $314,131 | $451,852 |
| 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 | $97,137 | $314,131 | $451,852 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $98,000 | $128,000 | $156,000 |
| Bill Payments | $74,351 | $193,890 | $253,569 |
| Subtotal Spent on Operations | $172,351 | $321,890 | $409,569 |
| 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 | $172,351 | $321,890 | $409,569 |
| Net Cash Flow | ($75,213) | ($7,759) | $42,283 |
| Cash Balance | $41,387 | $33,628 | $75,911 |
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 | $41,387 | $33,628 | $75,911 |
| Accounts Receivable | $27,367 | $80,792 | $104,541 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $68,754 | $114,420 | $180,452 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $1,992 | $3,984 | $5,976 |
| Total Long-term Assets | $8,008 | $6,016 | $4,024 |
| Total Assets | $76,762 | $120,436 | $184,476 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,351 | $16,526 | $21,228 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $9,351 | $16,526 | $21,228 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $9,351 | $16,526 | $21,228 |
| Paid-in Capital | $140,000 | $140,000 | $140,000 |
| Retained Earnings | ($13,400) | ($72,589) | ($36,090) |
| Earnings | ($59,189) | $36,499 | $59,338 |
| Total Capital | $67,411 | $103,910 | $163,248 |
| Total Liabilities and Capital | $76,762 | $120,436 | $184,476 |
| Net Worth | $67,411 | $103,910 | $163,248 |
8.6 Business Ratios
The following chart offers Business Ratios for this company as well as the industry averages.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 195.21% | 29.40% | 3.34% |
| Percent of Total Assets | ||||
| Accounts Receivable | 35.65% | 67.08% | 56.67% | 16.20% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 23.64% |
| Total Current Assets | 89.57% | 95.00% | 97.82% | 79.15% |
| Long-term Assets | 10.43% | 5.00% | 2.18% | 20.85% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 12.18% | 13.72% | 11.51% | 36.32% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 15.56% |
| Total Liabilities | 12.18% | 13.72% | 11.51% | 51.88% |
| Net Worth | 87.82% | 86.28% | 88.49% | 48.12% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 60.00% | 60.00% | 60.00% | 34.87% |
| Selling, General & Administrative Expenses | 107.54% | 50.07% | 47.52% | 22.04% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.89% |
| Profit Before Interest and Taxes | -47.54% | 14.19% | 17.82% | 1.46% |
| Main Ratios | ||||
| Current | 7.35 | 6.92 | 8.50 | 1.95 |
| Quick | 7.35 | 6.92 | 8.50 | 0.75 |
| Total Debt to Total Assets | 12.18% | 13.72% | 11.51% | 59.08% |
| Pre-tax Return on Net Worth | -87.80% | 50.18% | 51.93% | 3.36% |
| Pre-tax Return on Assets | -77.11% | 43.29% | 45.95% | 8.20% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -47.54% | 9.93% | 12.48% | n.a |
| Return on Equity | -87.80% | 35.13% | 36.35% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 3.41 | 3.41 | 3.41 | n.a |
| Collection Days | 56 | 72 | 95 | n.a |
| Accounts Payable Turnover | 8.95 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 23 | 27 | n.a |
| Total Asset Turnover | 1.62 | 3.05 | 2.58 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.14 | 0.16 | 0.13 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $59,403 | $97,894 | $159,224 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.62 | 0.33 | 0.39 | n.a |
| Current Debt/Total Assets | 12% | 14% | 12% | n.a |
| Acid Test | 4.43 | 2.03 | 3.58 | n.a |
| Sales/Net Worth | 1.85 | 3.54 | 2.91 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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