Ethnic Food Import Business Plan

Aztec Food Imports

Financial Plan

The following sections outline conservative estimates of the financial performance of Aztec Food Imports.

7.1 Break-even Analysis

The monthly break-even point is $26,514.

Ethnic food import business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$26,514

Assumptions:
Average Percent Variable Cost	31%
Estimated Monthly Fixed Cost	$18,230

7.2 Projected Profit and Loss

The following table and charts will highlight the next three years.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$333,500	$420,000	$510,000
Direct Cost of Sales	$104,200	$133,000	$154,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$104,200	$133,000	$154,000

Gross Margin	$229,300	$287,000	$356,000
Gross Margin %	68.76%	68.33%	69.80%


Expenses
Payroll	$151,200	$178,000	$198,000
Sales and Marketing and Other Expenses	$0	$0	$0
Depreciation	$2,880	$2,880	$2,880
Leased Equipment	$0	$0	$0
Utilities	$6,000	$6,000	$6,000
Insurance	$0	$0	$0
Rent	$36,000	$36,000	$36,000
Payroll Taxes	$22,680	$26,700	$29,700
Other	$0	$0	$0

Total Operating Expenses	$218,760	$249,580	$272,580

Profit Before Interest and Taxes	$10,540	$37,420	$83,420
EBITDA	$13,420	$40,300	$86,300
Interest Expense	$9,233	$7,876	$6,460
Taxes Incurred	$392	$8,863	$23,088

Net Profit	$915	$20,681	$53,872
Net Profit/Sales	0.27%	4.92%	10.56%

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	$83,375	$105,000	$127,500
Cash from Receivables	$194,775	$300,644	$367,563
Subtotal Cash from Operations	$278,150	$405,644	$495,063

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	$278,150	$405,644	$495,063

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$151,200	$178,000	$198,000
Bill Payments	$110,267	$228,719	$255,535
Subtotal Spent on Operations	$261,467	$406,719	$453,535

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	$14,160	$14,160	$14,160
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$275,627	$420,879	$467,695

Net Cash Flow	$2,523	($15,235)	$27,368
Cash Balance	$107,223	$91,987	$119,355

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	$107,223	$91,987	$119,355
Accounts Receivable	$55,350	$69,706	$84,643
Inventory	$15,950	$20,358	$23,573
Other Current Assets	$0	$0	$0
Total Current Assets	$178,523	$182,052	$227,571

Long-term Assets
Long-term Assets	$20,000	$20,000	$20,000
Accumulated Depreciation	$2,880	$5,760	$8,640
Total Long-term Assets	$17,120	$14,240	$11,360
Total Assets	$195,643	$196,292	$238,931

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$24,188	$18,316	$21,243
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$24,188	$18,316	$21,243

Long-term Liabilities	$85,840	$71,680	$57,520
Total Liabilities	$110,028	$89,996	$78,763

Paid-in Capital	$100,000	$100,000	$100,000
Retained Earnings	($15,300)	($14,385)	$6,296
Earnings	$915	$20,681	$53,872
Total Capital	$85,615	$106,296	$160,168
Total Liabilities and Capital	$195,643	$196,292	$238,931

Net Worth	$85,615	$106,296	$160,168

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 5149, Groceries and Related Products, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	25.94%	21.43%	4.60%

Percent of Total Assets
Accounts Receivable	28.29%	35.51%	35.43%	33.30%
Inventory	8.15%	10.37%	9.87%	26.00%
Other Current Assets	0.00%	0.00%	0.00%	20.90%
Total Current Assets	91.25%	92.75%	95.25%	80.20%
Long-term Assets	8.75%	7.25%	4.75%	19.80%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	12.36%	9.33%	8.89%	45.20%
Long-term Liabilities	43.88%	36.52%	24.07%	10.00%
Total Liabilities	56.24%	45.85%	32.96%	55.20%
Net Worth	43.76%	54.15%	67.04%	44.80%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	68.76%	68.33%	69.80%	44.10%
Selling, General & Administrative Expenses	68.48%	63.41%	59.24%	26.70%
Advertising Expenses	0.00%	0.00%	0.00%	0.70%
Profit Before Interest and Taxes	3.16%	8.91%	16.36%	0.80%

Main Ratios
Current	7.38	9.94	10.71	1.69
Quick	6.72	8.83	9.60	1.01
Total Debt to Total Assets	56.24%	45.85%	32.96%	55.20%
Pre-tax Return on Net Worth	1.53%	27.79%	48.05%	3.60%
Pre-tax Return on Assets	0.67%	15.05%	32.21%	8.00%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	0.27%	4.92%	10.56%	n.a
Return on Equity	1.07%	19.46%	33.63%	n.a

Activity Ratios
Accounts Receivable Turnover	4.52	4.52	4.52	n.a
Collection Days	56	72	74	n.a
Inventory Turnover	3.83	7.33	7.01	n.a
Accounts Payable Turnover	5.56	12.17	12.17	n.a
Payment Days	27	35	28	n.a
Total Asset Turnover	1.70	2.14	2.13	n.a

Debt Ratios
Debt to Net Worth	1.29	0.85	0.49	n.a
Current Liab. to Liab.	0.22	0.20	0.27	n.a

Liquidity Ratios
Net Working Capital	$154,335	$163,736	$206,328	n.a
Interest Coverage	1.14	4.75	12.91	n.a

Additional Ratios
Assets to Sales	0.59	0.47	0.47	n.a
Current Debt/Total Assets	12%	9%	9%	n.a
Acid Test	4.43	5.02	5.62	n.a
Sales/Net Worth	3.90	3.95	3.18	n.a
Dividend Payout	0.00	0.00	0.00	n.a