Basket of Goodies
Financial Plan
The following sections will outline the important financial data.
7.1 Important Assumptions
The following table details important financial assumptions for BOG.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 10.00% | 10.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
7.2 Break-even Analysis
The Break-even Analysis indicates BOG will need to sell approximately $4,900 in baskets per month to break even.
| Break-even Analysis | |
| Monthly Revenue Break-even | $4,915 |
| Assumptions: | |
| Average Percent Variable Cost | 34% |
| Estimated Monthly Fixed Cost | $3,223 |
7.3 Projected Profit and Loss
The following table will indicate projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $43,545 | $93,319 | $109,910 |
| Direct Cost of Sales | $14,989 | $26,328 | $34,022 |
| Other | $0 | $0 | $0 |
| Total Cost of Sales | $14,989 | $26,328 | $34,022 |
| Gross Margin | $28,556 | $66,991 | $75,888 |
| Gross Margin % | 65.58% | 71.79% | 69.05% |
| Expenses | |||
| Payroll | $31,500 | $39,000 | $39,000 |
| Sales and Marketing and Other Expenses | $1,200 | $1,200 | $1,200 |
| Depreciation | $655 | $672 | $672 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $0 | $0 | $0 |
| Insurance | $600 | $600 | $600 |
| Rent | $0 | $0 | $0 |
| Payroll Taxes | $4,725 | $5,850 | $5,850 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $38,680 | $47,322 | $47,322 |
| Profit Before Interest and Taxes | ($10,124) | $19,669 | $28,566 |
| EBITDA | ($9,469) | $20,341 | $29,238 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $4,917 | $7,261 |
| Net Profit | ($10,124) | $14,752 | $21,305 |
| Net Profit/Sales | -23.25% | 15.81% | 19.38% |
7.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $43,545 | $93,319 | $109,910 |
| Subtotal Cash from Operations | $43,545 | $93,319 | $109,910 |
| 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 | $43,545 | $93,319 | $109,910 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $31,500 | $39,000 | $39,000 |
| Bill Payments | $18,916 | $44,238 | $49,978 |
| Subtotal Spent on Operations | $50,416 | $83,238 | $88,978 |
| 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 | $50,416 | $83,238 | $88,978 |
| Net Cash Flow | ($6,871) | $10,081 | $20,932 |
| Cash Balance | $15,779 | $25,860 | $46,792 |
7.5 Projected Balance Sheet
The following table will indicate the projected balance sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $15,779 | $25,860 | $46,792 |
| Inventory | $3,507 | $6,160 | $7,960 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $19,286 | $32,020 | $54,752 |
| Long-term Assets | |||
| Long-term Assets | $2,000 | $2,000 | $2,000 |
| Accumulated Depreciation | $655 | $1,327 | $1,999 |
| Total Long-term Assets | $1,345 | $673 | $1 |
| Total Assets | $20,631 | $32,693 | $54,753 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $6,105 | $3,415 | $4,170 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $6,105 | $3,415 | $4,170 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $6,105 | $3,415 | $4,170 |
| Paid-in Capital | $28,000 | $28,000 | $28,000 |
| Retained Earnings | ($3,350) | ($13,474) | $1,278 |
| Earnings | ($10,124) | $14,752 | $21,305 |
| Total Capital | $14,526 | $29,278 | $50,584 |
| Total Liabilities and Capital | $20,631 | $32,693 | $54,753 |
| Net Worth | $14,526 | $29,278 | $50,584 |
7.6 Business Ratios
The ratios table compares BOG’s estimated growth, balance and profit ratios to the industry standard for Miscellaneous personal services (Standard Industry Code #7299).
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 114.30% | 17.78% | 17.90% |
| Percent of Total Assets | ||||
| Inventory | 17.00% | 18.84% | 14.54% | 4.60% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 37.10% |
| Total Current Assets | 93.48% | 97.94% | 100.00% | 52.80% |
| Long-term Assets | 6.52% | 2.06% | 0.00% | 47.20% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 29.59% | 10.45% | 7.62% | 33.90% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 28.00% |
| Total Liabilities | 29.59% | 10.45% | 7.62% | 61.90% |
| Net Worth | 70.41% | 89.55% | 92.38% | 38.10% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 65.58% | 71.79% | 69.05% | 0.00% |
| Selling, General & Administrative Expenses | 88.87% | 55.98% | 49.55% | 72.70% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 2.20% |
| Profit Before Interest and Taxes | -23.25% | 21.08% | 25.99% | 4.00% |
| Main Ratios | ||||
| Current | 3.16 | 9.38 | 13.13 | 1.81 |
| Quick | 2.58 | 7.57 | 11.22 | 1.33 |
| Total Debt to Total Assets | 29.59% | 10.45% | 7.62% | 61.90% |
| Pre-tax Return on Net Worth | -69.69% | 67.18% | 56.47% | 6.30% |
| Pre-tax Return on Assets | -49.07% | 60.16% | 52.17% | 16.60% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -23.25% | 15.81% | 19.38% | n.a |
| Return on Equity | -69.69% | 50.38% | 42.12% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 10.80 | 5.45 | 4.82 | n.a |
| Accounts Payable Turnover | 4.10 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 42 | 27 | n.a |
| Total Asset Turnover | 2.11 | 2.85 | 2.01 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.42 | 0.12 | 0.08 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $13,181 | $28,605 | $50,582 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.47 | 0.35 | 0.50 | n.a |
| Current Debt/Total Assets | 30% | 10% | 8% | n.a |
| Acid Test | 2.58 | 7.57 | 11.22 | n.a |
| Sales/Net Worth | 3.00 | 3.19 | 2.17 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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