Delicatessen and Bakery Business Plan

The Bronx Deli and Bakery

Financial Plan

The following is the Financial plan for the Bronx Deli and Bakery.

7.1 Break-even Analysis

The following table and chart shows our Break-even Analysis.

Delicatessen and bakery business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$32,365

Assumptions:
Average Percent Variable Cost	29%
Estimated Monthly Fixed Cost	$23,068

7.2 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$422,500	$469,000	$522,000
Direct Cost of Sales	$121,360	$130,400	$145,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$121,360	$130,400	$145,000

Gross Margin	$301,140	$338,600	$377,000
Gross Margin %	71.28%	72.20%	72.22%


Expenses
Payroll	$205,200	$217,000	$230,000
Sales and Marketing and Other Expenses	$7,000	$10,000	$13,000
Depreciation	$1,440	$1,440	$1,440
Leased Equipment	$0	$0	$0
Utilities	$4,800	$4,800	$4,800
Insurance	$6,000	$6,000	$6,000
Rent	$21,600	$21,600	$21,600
Payroll Taxes	$30,780	$32,550	$34,500
Other	$0	$0	$0

Total Operating Expenses	$276,820	$293,390	$311,340

Profit Before Interest and Taxes	$24,320	$45,210	$65,660
EBITDA	$25,760	$46,650	$67,100
Interest Expense	$4,459	$3,501	$2,501
Taxes Incurred	$5,958	$12,513	$18,948

Net Profit	$13,903	$29,197	$44,211
Net Profit/Sales	3.29%	6.23%	8.47%

7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$422,500	$469,000	$522,000
Subtotal Cash from Operations	$422,500	$469,000	$522,000

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	$422,500	$469,000	$522,000

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$205,200	$217,000	$230,000
Bill Payments	$189,370	$226,386	$246,000
Subtotal Spent on Operations	$394,570	$443,386	$476,000

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	$9,996	$9,996	$9,996
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$404,566	$453,382	$485,996

Net Cash Flow	$17,934	$15,618	$36,004
Cash Balance	$81,134	$96,752	$132,756

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$81,134	$96,752	$132,756
Inventory	$14,630	$15,720	$17,480
Other Current Assets	$0	$0	$0
Total Current Assets	$95,764	$112,471	$150,235

Long-term Assets
Long-term Assets	$50,000	$50,000	$50,000
Accumulated Depreciation	$1,440	$2,880	$4,320
Total Long-term Assets	$48,560	$47,120	$45,680
Total Assets	$144,324	$159,591	$195,915

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$22,217	$18,284	$20,392
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$22,217	$18,284	$20,392

Long-term Liabilities	$40,004	$30,008	$20,012
Total Liabilities	$62,221	$48,292	$40,404

Paid-in Capital	$80,000	$80,000	$80,000
Retained Earnings	($11,800)	$2,103	$31,300
Earnings	$13,903	$29,197	$44,211
Total Capital	$82,103	$111,300	$155,511
Total Liabilities and Capital	$144,324	$159,591	$195,915

Net Worth	$82,103	$111,300	$155,511

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5812, Eating Places, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	11.01%	11.30%	7.60%

Percent of Total Assets
Inventory	10.14%	9.85%	8.92%	3.60%
Other Current Assets	0.00%	0.00%	0.00%	35.60%
Total Current Assets	66.35%	70.47%	76.68%	43.70%
Long-term Assets	33.65%	29.53%	23.32%	56.30%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	15.39%	11.46%	10.41%	32.70%
Long-term Liabilities	27.72%	18.80%	10.21%	28.50%
Total Liabilities	43.11%	30.26%	20.62%	61.20%
Net Worth	56.89%	69.74%	79.38%	38.80%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	71.28%	72.20%	72.22%	60.50%
Selling, General & Administrative Expenses	67.99%	65.97%	63.75%	39.80%
Advertising Expenses	1.66%	2.13%	2.49%	3.20%
Profit Before Interest and Taxes	5.76%	9.64%	12.58%	0.70%

Main Ratios
Current	4.31	6.15	7.37	0.98
Quick	3.65	5.29	6.51	0.65
Total Debt to Total Assets	43.11%	30.26%	20.62%	61.20%
Pre-tax Return on Net Worth	24.19%	37.47%	40.61%	1.70%
Pre-tax Return on Assets	13.76%	26.14%	32.24%	4.30%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	3.29%	6.23%	8.47%	n.a
Return on Equity	16.93%	26.23%	28.43%	n.a

Activity Ratios
Inventory Turnover	10.91	8.59	8.74	n.a
Accounts Payable Turnover	9.52	12.17	12.17	n.a
Payment Days	27	33	28	n.a
Total Asset Turnover	2.93	2.94	2.66	n.a

Debt Ratios
Debt to Net Worth	0.76	0.43	0.26	n.a
Current Liab. to Liab.	0.36	0.38	0.50	n.a

Liquidity Ratios
Net Working Capital	$73,547	$94,188	$129,843	n.a
Interest Coverage	5.45	12.91	26.25	n.a

Additional Ratios
Assets to Sales	0.34	0.34	0.38	n.a
Current Debt/Total Assets	15%	11%	10%	n.a
Acid Test	3.65	5.29	6.51	n.a
Sales/Net Worth	5.15	4.21	3.36	n.a
Dividend Payout	0.00	0.00	0.00	n.a