Kona-Q
Financial Plan
The following sections will outline important financial information.
8.1 Important Assumptions
The following section will detail important Financial Assumptions.
General Assumptions | |||
2003 | 2004 | 2005 | |
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 Projected Cash Flow
The following chart and table will indicate Projected Cash Flow.

Pro Forma Cash Flow | |||
2003 | 2004 | 2005 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $80,597 | $255,156 | $475,163 |
Subtotal Cash from Operations | $80,597 | $255,156 | $475,163 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $20,000 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $75,000 | $75,000 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $10,000 | $0 | $0 |
Subtotal Cash Received | $110,597 | $330,156 | $550,163 |
Expenditures | 2003 | 2004 | 2005 |
Expenditures from Operations | |||
Cash Spending | $46,550 | $99,200 | $147,800 |
Bill Payments | $50,960 | $127,404 | $242,199 |
Subtotal Spent on Operations | $97,510 | $226,604 | $389,999 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $5,500 | $5,500 | $5,500 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $7,500 | $7,500 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $75,000 | $75,000 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $103,010 | $314,604 | $477,999 |
Net Cash Flow | $7,586 | $15,552 | $72,164 |
Cash Balance | $12,575 | $28,127 | $100,291 |
8.3 Break-even Analysis
The Break-even Analysis indicates that $10,099 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $10,099 |
Assumptions: | |
Average Percent Variable Cost | 30% |
Estimated Monthly Fixed Cost | $7,069 |
8.4 Projected Profit and Loss
The following table indicates Projected Profit and Loss.




Pro Forma Profit and Loss | |||
2003 | 2004 | 2005 | |
Sales | $80,597 | $255,156 | $475,163 |
Direct Cost of Sales | $24,179 | $76,547 | $142,549 |
Other Costs of Sales | $0 | $0 | $0 |
Total Cost of Sales | $24,179 | $76,547 | $142,549 |
Gross Margin | $56,418 | $178,609 | $332,614 |
Gross Margin % | 70.00% | 70.00% | 70.00% |
Expenses | |||
Payroll | $46,550 | $99,200 | $147,800 |
Sales and Marketing and Other Expenses | $3,600 | $7,200 | $10,000 |
Depreciation | $12,996 | $20,000 | $24,000 |
Rent | $9,000 | $18,000 | $27,000 |
Utilities | $2,400 | $4,800 | $7,200 |
Insurance | $2,400 | $4,800 | $7,200 |
Payroll Taxes | $6,983 | $14,880 | $22,170 |
Other | $900 | $1,800 | $2,700 |
Total Operating Expenses | $84,829 | $170,680 | $248,070 |
Profit Before Interest and Taxes | ($28,411) | $7,929 | $84,544 |
EBITDA | ($15,415) | $27,929 | $108,544 |
Interest Expense | $1,867 | $4,836 | $11,036 |
Taxes Incurred | $0 | $928 | $22,052 |
Net Profit | ($30,278) | $2,165 | $51,456 |
Net Profit/Sales | -37.57% | 0.85% | 10.83% |
8.5 Projected Balance Sheet
The following table will indicate the Projected Balance Sheet.
Pro Forma Balance Sheet | |||
2003 | 2004 | 2005 | |
Assets | |||
Current Assets | |||
Cash | $12,575 | $28,127 | $100,291 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $12,575 | $28,127 | $100,291 |
Long-term Assets | |||
Long-term Assets | $22,141 | $97,141 | $172,141 |
Accumulated Depreciation | $21,985 | $41,985 | $65,985 |
Total Long-term Assets | $156 | $55,156 | $106,156 |
Total Assets | $12,731 | $83,283 | $206,447 |
Liabilities and Capital | 2003 | 2004 | 2005 |
Current Liabilities | |||
Accounts Payable | $4,610 | $10,996 | $20,705 |
Current Borrowing | $14,500 | $9,000 | $3,500 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $19,110 | $19,996 | $24,205 |
Long-term Liabilities | $2,858 | $70,358 | $137,858 |
Total Liabilities | $21,968 | $90,354 | $162,063 |
Paid-in Capital | $10,000 | $10,000 | $10,000 |
Retained Earnings | $11,041 | ($19,237) | ($17,071) |
Earnings | ($30,278) | $2,165 | $51,456 |
Total Capital | ($9,237) | ($7,071) | $44,384 |
Total Liabilities and Capital | $12,731 | $83,283 | $206,447 |
Net Worth | ($9,237) | ($7,071) | $44,384 |
8.6 Business Ratios
The following table indicates common Business Ratios specific to Kona-Q as well as industry ratios.
Ratio Analysis | ||||
2003 | 2004 | 2005 | Industry Profile | |
Sales Growth | -30.19% | 216.58% | 86.22% | 6.96% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 28.39% |
Total Current Assets | 98.77% | 33.77% | 48.58% | 37.68% |
Long-term Assets | 1.23% | 66.23% | 51.42% | 62.32% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 150.10% | 24.01% | 11.72% | 19.17% |
Long-term Liabilities | 22.45% | 84.48% | 66.78% | 29.21% |
Total Liabilities | 172.55% | 108.49% | 78.50% | 48.38% |
Net Worth | -72.55% | -8.49% | 21.50% | 51.62% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 70.00% | 70.00% | 70.00% | 59.31% |
Selling, General & Administrative Expenses | 105.61% | 70.92% | 60.97% | 39.09% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 2.75% |
Profit Before Interest and Taxes | -35.25% | 3.11% | 17.79% | 1.59% |
Main Ratios | ||||
Current | 0.66 | 1.41 | 4.14 | 1.26 |
Quick | 0.66 | 1.41 | 4.14 | 0.87 |
Total Debt to Total Assets | 172.55% | 108.49% | 78.50% | 3.27% |
Pre-tax Return on Net Worth | 327.79% | -43.75% | 165.62% | 54.38% |
Pre-tax Return on Assets | -237.82% | 3.71% | 35.61% | 7.17% |
Additional Ratios | 2003 | 2004 | 2005 | |
Net Profit Margin | -37.57% | 0.85% | 10.83% | n.a |
Return on Equity | 0.00% | 0.00% | 115.93% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 11.13 | 12.17 | 12.17 | n.a |
Payment Days | 29 | 21 | 23 | n.a |
Total Asset Turnover | 6.33 | 3.06 | 2.30 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.00 | 0.00 | 3.65 | n.a |
Current Liab. to Liab. | 0.87 | 0.22 | 0.15 | n.a |
Liquidity Ratios | ||||
Net Working Capital | ($6,535) | $8,131 | $76,086 | n.a |
Interest Coverage | -15.22 | 1.64 | 7.66 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.16 | 0.33 | 0.43 | n.a |
Current Debt/Total Assets | 150% | 24% | 12% | n.a |
Acid Test | 0.66 | 1.41 | 4.14 | n.a |
Sales/Net Worth | 0.00 | 0.00 | 10.71 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |