Export Automobile Parts Business Plan

D.A.P. Exports

Financial Plan

The following is the financial plan for D.A.P. Exports.

7.1 Break-even Analysis

The monthly break-even point, based on average monthly running costs and estimated variable costs of sales is shown in the table and chart below.

Export automobile parts business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$42,743

Assumptions:
Average Percent Variable Cost	49%
Estimated Monthly Fixed Cost	$21,730

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	$596,000	$710,000	$824,000
Direct Cost of Sales	$293,000	$355,000	$412,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$293,000	$355,000	$412,000

Gross Margin	$303,000	$355,000	$412,000
Gross Margin %	50.84%	50.00%	50.00%


Expenses
Payroll	$194,400	$213,000	$232,000
Sales and Marketing and Other Expenses	$6,000	$10,000	$15,000
Depreciation	$0	$0	$0
Leased Equipment	$0	$0	$0
Utilities	$7,200	$8,000	$9,000
Insurance	$0	$0	$0
Rent	$24,000	$24,000	$24,000
Payroll Taxes	$29,160	$31,950	$34,800
Other	$0	$0	$0

Total Operating Expenses	$260,760	$286,950	$314,800

Profit Before Interest and Taxes	$42,240	$68,050	$97,200
EBITDA	$42,240	$68,050	$97,200
Interest Expense	$10,000	$10,000	$10,000
Taxes Incurred	$9,672	$17,415	$26,160

Net Profit	$22,568	$40,635	$61,040
Net Profit/Sales	3.79%	5.72%	7.41%

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	$149,000	$177,500	$206,000
Cash from Receivables	$324,550	$509,078	$594,578
Subtotal Cash from Operations	$473,550	$686,578	$800,578

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	$473,550	$686,578	$800,578

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$194,400	$213,000	$232,000
Bill Payments	$265,680	$487,380	$533,881
Subtotal Spent on Operations	$460,080	$700,380	$765,881

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	$460,080	$700,380	$765,881

Net Cash Flow	$13,470	($13,802)	$34,697
Cash Balance	$96,470	$82,668	$117,365

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	$96,470	$82,668	$117,365
Accounts Receivable	$122,450	$145,872	$169,293
Inventory	$46,200	$55,976	$64,964
Other Current Assets	$0	$0	$0
Total Current Assets	$265,120	$284,516	$351,622

Long-term Assets
Long-term Assets	$0	$0	$0
Accumulated Depreciation	$0	$0	$0
Total Long-term Assets	$0	$0	$0
Total Assets	$265,120	$284,516	$351,622

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$59,552	$38,313	$44,379
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$59,552	$38,313	$44,379

Long-term Liabilities	$100,000	$100,000	$100,000
Total Liabilities	$159,552	$138,313	$144,379

Paid-in Capital	$150,000	$150,000	$150,000
Retained Earnings	($67,000)	($44,432)	($3,797)
Earnings	$22,568	$40,635	$61,040
Total Capital	$105,568	$146,203	$207,243
Total Liabilities and Capital	$265,120	$284,516	$351,622

Net Worth	$105,568	$146,203	$207,243

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 5013, Moter Vehicles Supplies and New Parts, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	19.13%	16.06%	12.20%

Percent of Total Assets
Accounts Receivable	46.19%	51.27%	48.15%	25.10%
Inventory	17.43%	19.67%	18.48%	46.10%
Other Current Assets	0.00%	0.00%	0.00%	15.10%
Total Current Assets	100.00%	100.00%	100.00%	86.30%
Long-term Assets	0.00%	0.00%	0.00%	13.70%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	22.46%	13.47%	12.62%	46.60%
Long-term Liabilities	37.72%	35.15%	28.44%	11.50%
Total Liabilities	60.18%	48.61%	41.06%	58.10%
Net Worth	39.82%	51.39%	58.94%	41.90%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	50.84%	50.00%	50.00%	21.70%
Selling, General & Administrative Expenses	47.05%	44.28%	42.59%	13.20%
Advertising Expenses	1.01%	1.41%	1.82%	0.70%
Profit Before Interest and Taxes	7.09%	9.58%	11.80%	1.40%

Main Ratios
Current	4.45	7.43	7.92	1.98
Quick	3.68	5.97	6.46	0.78
Total Debt to Total Assets	60.18%	48.61%	41.06%	58.10%
Pre-tax Return on Net Worth	30.54%	39.71%	42.08%	3.80%
Pre-tax Return on Assets	12.16%	20.40%	24.80%	9.00%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	3.79%	5.72%	7.41%	n.a
Return on Equity	21.38%	27.79%	29.45%	n.a

Activity Ratios
Accounts Receivable Turnover	3.65	3.65	3.65	n.a
Collection Days	56	92	93	n.a
Inventory Turnover	5.31	6.95	6.81	n.a
Accounts Payable Turnover	5.46	12.17	12.17	n.a
Payment Days	28	38	28	n.a
Total Asset Turnover	2.25	2.50	2.34	n.a

Debt Ratios
Debt to Net Worth	1.51	0.95	0.70	n.a
Current Liab. to Liab.	0.37	0.28	0.31	n.a

Liquidity Ratios
Net Working Capital	$205,568	$246,203	$307,243	n.a
Interest Coverage	4.22	6.81	9.72	n.a

Additional Ratios
Assets to Sales	0.44	0.40	0.43	n.a
Current Debt/Total Assets	22%	13%	13%	n.a
Acid Test	1.62	2.16	2.64	n.a
Sales/Net Worth	5.65	4.86	3.98	n.a
Dividend Payout	0.00	0.00	0.00	n.a