By 
Our biggest savings of the year
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 |