New Look, Inc.
Financial Plan
Forecast
Key Assumptions
“
Key Assumptions:
– There are fashion forward men in the area
– These men have money they could spend on luxuries if they choose
– These men are looking for high quality and unique clothes. They appreciate brands over everything else.
“
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
The New Look strategy is to aggressively develop and market a full range collection to consumers. The company intends to market its line as an alternative to existing clothing lines and differentiate itself through its marketing strategies, exclusiveness, and brand awareness. New Look intends to build on its core portfolio of products and overcome any obstacles by using the company’s expertise in the clothing industry.
Sources of Funds
We believe we will be able to finance our growth through careful management of existing streams of income and working capital generated by the business.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $4,016,900 | $5,300,000 | $6,500,000 |
| Direct Costs | $1,948,870 | $2,450,000 | $2,950,000 |
| Gross Margin | $2,068,030 | $2,850,000 | $3,550,000 |
| Gross Margin % | 51% | 54% | 55% |
| Operating Expenses | |||
| Salaries & Wages | $471,800 | $606,528 | $737,217 |
| Employee Related Expenses | $94,360 | $121,306 | $147,443 |
| Marketing Expense | $803,380 | $1,060,000 | $1,300,000 |
| Communications | $26,400 | $26,400 | $26,400 |
| Client Relations | $24,000 | $24,000 | $24,000 |
| Rent | $12,000 | $12,000 | $12,000 |
| Utilities | $8,400 | $8,400 | $8,400 |
| Other G&A expense | $120,507 | $159,000 | $195,000 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $1,560,847 | $2,017,634 | $2,450,460 |
| Operating Income | $507,183 | $832,366 | $1,099,540 |
| Interest Incurred | $52,076 | $36,078 | $32,602 |
| Depreciation and Amortization | $81,095 | $100,040 | $105,852 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $93,503 | $174,062 | $240,271 |
| Total Expenses | $3,736,391 | $4,777,813 | $5,779,186 |
| Net Profit | $280,509 | $522,187 | $720,814 |
| Net Profit/Sales | 7% | 10% | 11% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $445,000 | $223,231 | $691,135 | $1,414,701 |
| Accounts Receivable | $69,031 | $192,521 | $214,650 | $263,250 |
| Inventory | $545,000 | $612,500 | $737,500 | $737,501 |
| Other Current Assets | $105,000 | $105,000 | $105,000 | $105,000 |
| Total Current Assets | $1,164,031 | $1,133,252 | $1,748,285 | $2,520,451 |
| Long-Term Assets | $525,000 | $862,600 | $912,600 | $977,600 |
| Accumulated Depreciation | ($80,000) | ($161,095) | ($261,135) | ($366,987) |
| Total Long-Term Assets | $445,000 | $701,505 | $651,465 | $610,613 |
| Total Assets | $1,609,031 | $1,834,757 | $2,399,751 | $3,131,064 |
| Accounts Payable | $312,023 | $545,687 | $635,970 | $677,370 |
| Income Taxes Payable | $5,045 | $33,944 | $43,478 | $59,991 |
| Sales Taxes Payable | $9,835 | $95,072 | $106,000 | $130,000 |
| Short-Term Debt | $888,271 | $578,475 | $608,070 | $613,065 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $1,215,174 | $1,253,177 | $1,393,518 | $1,480,427 |
| Long-Term Debt | $266,729 | $173,943 | $76,409 | $0 |
| Long-Term Liabilities | $266,729 | $173,943 | $76,409 | $0 |
| Total Liabilities | $1,481,903 | $1,427,120 | $1,469,927 | $1,480,427 |
| Paid-In Capital | $70,000 | $70,000 | $70,000 | $70,000 |
| Retained Earnings | $57,128 | $57,128 | $337,637 | $859,824 |
| Earnings | $280,509 | $522,187 | $720,814 | |
| Total Owner’s Equity | $127,128 | $407,637 | $929,824 | $1,650,638 |
| Total Liabilities & Equity | $1,609,031 | $1,834,757 | $2,399,751 | $3,131,064 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $280,509 | $522,187 | $720,814 |
| Depreciation & Amortization | $81,095 | $100,040 | $105,852 |
| Change in Accounts Receivable | ($123,490) | ($22,129) | ($48,600) |
| Change in Inventory | ($67,500) | ($125,000) | ($1) |
| Change in Accounts Payable | $233,664 | $90,283 | $41,400 |
| Change in Income Tax Payable | $28,899 | $9,534 | $16,513 |
| Change in Sales Tax Payable | $85,237 | $10,928 | $24,000 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $518,414 | $585,842 | $859,979 |
| Investing & Financing | |||
| Assets Purchased or Sold | ($337,600) | ($50,000) | ($65,000) |
| Net Cash from Investing | ($337,600) | ($50,000) | ($65,000) |
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | ($309,796) | $29,596 | $4,995 |
| Change in Long-Term Debt | ($92,787) | ($97,534) | ($76,409) |
| Net Cash from Financing | ($402,583) | ($67,938) | ($71,414) |
| Cash at Beginning of Period | $445,000 | $223,231 | $691,135 |
| Net Change in Cash | ($221,769) | $467,904 | $723,565 |
| Cash at End of Period | $223,231 | $691,135 | $1,414,701 |
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