The Metolius Agency
Financial Plan
The following sections will outline important financial information.
8.1 Important Assumptions
The following table details important financial assumptions.
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 | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 |
8.2 Break-even Analysis
The Break-even Analysis indicates that approximately $7,000 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $7,053 |
Assumptions: | |
Average Percent Variable Cost | 3% |
Estimated Monthly Fixed Cost | $6,841 |
8.3 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 | $69,397 | $125,251 | $145,392 |
Direct Cost of Sales | $2,082 | $3,758 | $4,362 |
Other Production Expenses | $0 | $0 | $0 |
Total Cost of Sales | $2,082 | $3,758 | $4,362 |
Gross Margin | $67,316 | $121,493 | $141,030 |
Gross Margin % | 97.00% | 97.00% | 97.00% |
Expenses | |||
Payroll | $59,280 | $76,560 | $76,560 |
Sales and Marketing and Other Expenses | $2,820 | $2,820 | $2,820 |
Depreciation | $2,400 | $2,400 | $2,400 |
Website maintenance | $600 | $600 | $600 |
Insurance | $900 | $900 | $900 |
Rent | $7,200 | $7,200 | $7,200 |
Payroll Taxes | $8,892 | $11,484 | $11,484 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $82,092 | $101,964 | $101,964 |
Profit Before Interest and Taxes | ($14,776) | $19,529 | $39,066 |
EBITDA | ($12,376) | $21,929 | $41,466 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $5,859 | $11,720 |
Net Profit | ($14,776) | $13,670 | $27,347 |
Net Profit/Sales | -21.29% | 10.91% | 18.81% |
8.4 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 | $69,397 | $125,251 | $145,392 |
Subtotal Cash from Operations | $69,397 | $125,251 | $145,392 |
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 | $69,397 | $125,251 | $145,392 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $59,280 | $76,560 | $76,560 |
Bill Payments | $20,322 | $32,111 | $38,554 |
Subtotal Spent on Operations | $79,602 | $108,671 | $115,114 |
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 | $79,602 | $108,671 | $115,114 |
Net Cash Flow | ($10,205) | $16,580 | $30,278 |
Cash Balance | $11,995 | $28,575 | $58,853 |
8.5 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 | $11,995 | $28,575 | $58,853 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $11,995 | $28,575 | $58,853 |
Long-term Assets | |||
Long-term Assets | $19,800 | $19,800 | $19,800 |
Accumulated Depreciation | $2,400 | $4,800 | $7,200 |
Total Long-term Assets | $17,400 | $15,000 | $12,600 |
Total Assets | $29,395 | $43,575 | $71,453 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $2,172 | $2,681 | $3,213 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $2,172 | $2,681 | $3,213 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $2,172 | $2,681 | $3,213 |
Paid-in Capital | $43,000 | $43,000 | $43,000 |
Retained Earnings | ($1,000) | ($15,776) | ($2,106) |
Earnings | ($14,776) | $13,670 | $27,347 |
Total Capital | $27,224 | $40,894 | $68,240 |
Total Liabilities and Capital | $29,395 | $43,575 | $71,453 |
Net Worth | $27,224 | $40,894 | $68,240 |
8.6 Business Ratios
The following table compares standard business ratios with the Standard Industry Code #7336, Graphic Design Services.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 80.48% | 16.08% | 9.02% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 52.57% |
Total Current Assets | 40.81% | 65.58% | 82.37% | 76.45% |
Long-term Assets | 59.19% | 34.42% | 17.63% | 23.55% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 7.39% | 6.15% | 4.50% | 34.45% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 23.62% |
Total Liabilities | 7.39% | 6.15% | 4.50% | 58.07% |
Net Worth | 92.61% | 93.85% | 95.50% | 41.93% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 97.00% | 97.00% | 97.00% | 100.00% |
Selling, General & Administrative Expenses | 118.29% | 86.09% | 78.19% | 77.05% |
Advertising Expenses | 1.47% | 0.81% | 0.70% | 1.42% |
Profit Before Interest and Taxes | -21.29% | 15.59% | 26.87% | 0.83% |
Main Ratios | ||||
Current | 5.52 | 10.66 | 18.32 | 1.51 |
Quick | 5.52 | 10.66 | 18.32 | 1.13 |
Total Debt to Total Assets | 7.39% | 6.15% | 4.50% | 66.33% |
Pre-tax Return on Net Worth | -54.28% | 47.76% | 57.25% | 2.06% |
Pre-tax Return on Assets | -50.27% | 44.82% | 54.67% | 6.12% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -21.29% | 10.91% | 18.81% | n.a |
Return on Equity | -54.28% | 33.43% | 40.07% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 10.36 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 27 | 28 | n.a |
Total Asset Turnover | 2.36 | 2.87 | 2.03 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.08 | 0.07 | 0.05 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $9,824 | $25,894 | $55,640 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.42 | 0.35 | 0.49 | n.a |
Current Debt/Total Assets | 7% | 6% | 4% | n.a |
Acid Test | 5.52 | 10.66 | 18.32 | n.a |
Sales/Net Worth | 2.55 | 3.06 | 2.13 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |