The following topics describe the cash flow statement, profit and loss account, and balance sheet have been built using forecasted information which is as accurate and realistic as possible. These financial statements show that the business runs quite well and achieves expected results.
Sales increase gradually over the 12 months showing the positive trend of sales. Guildford Dry Cleaning is steadily gaining market share.
Gross profit and net profit rise proportionately to sales revenue.
Return on capital employed: Pendlebury (2002) indicates this ratio is useful to measure the efficiency which the long term capital has been employed. The business’ return on capital employed (ROCE) increases over the 12 months showing the effect of using capital to grow business, especially in the last months of the year.
The following table and chart show our Break-even Analysis.
In general, the business might meet some difficulties in the beginning months but after that the business grows as expected and produces a small profit at the end of the year. It is not necessary for the business to gain high profit in the first year, breaking even is acceptable.
Here under are the estimated fixed costs and variable costs for the year 2006. These costs have been divided into two periods:
Fixed costs Per Month
Jan - Mar
Apr - Dec
Salary per month
Variable costs Per Month
Jan - Mar
Apr - Dec
Cash flow increases gradually over the year creating the positive net present value. To exist and develop in the competitive market are getting more and more difficult. Obtaining loyal customers and recruiting new customers in term of long run business are extremely difficult therefore the service aims to achieve low profit create and enhance the service’s image which are the advantage competition in the market.
The table below shows the balance sheet annual figures for the first three years of operation. First year monthly figures are presented in the appendix.
Business ratios for the years of this plan are shown below. Industry profile ratios for commercial dry cleaning and laundry establishments are shown for comparison.