Write Bike
Financial Plan
The following sections will outline important financial information.
7.1 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 |
7.2 Break-even Analysis
The Break-even Analysis indicates what monthly revenue will be needed to reach the break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $3,333 |
Assumptions: | |
Average Percent Variable Cost | 0% |
Estimated Monthly Fixed Cost | $3,333 |
7.3 Projected Profit and Loss
The following table and charts displays Projected Profit and Loss.




Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $37,241 | $58,450 | $68,478 |
Direct Cost of Sales | $0 | $0 | $0 |
Other Costs of Sales | $0 | $0 | $0 |
Total Cost of Sales | $0 | $0 | $0 |
Gross Margin | $37,241 | $58,450 | $68,478 |
Gross Margin % | 100.00% | 100.00% | 100.00% |
Expenses | |||
Payroll | $31,000 | $40,000 | $44,000 |
Account Name | $0 | $0 | $0 |
Depreciation | $996 | $996 | $996 |
Rent | $3,000 | $3,000 | $3,000 |
Utilities | $1,200 | $1,200 | $1,200 |
Insurance | $900 | $900 | $900 |
Payroll Taxes | $0 | $0 | $0 |
Travel, trade shows. other expenses | $2,900 | $3,000 | $4,000 |
Total Operating Expenses | $39,996 | $49,096 | $54,096 |
Profit Before Interest and Taxes | ($2,755) | $9,354 | $14,382 |
EBITDA | ($1,759) | $10,350 | $15,378 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $2,806 | $4,315 |
Net Profit | ($2,755) | $6,548 | $10,068 |
Net Profit/Sales | -7.40% | 11.20% | 14.70% |
7.4 Projected Cash Flow
The following table and chart presents the Projected Cash Flow.

Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $37,241 | $58,450 | $68,478 |
Subtotal Cash from Operations | $37,241 | $58,450 | $68,478 |
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 | $37,241 | $58,450 | $68,478 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $31,000 | $40,000 | $44,000 |
Bill Payments | $7,493 | $10,517 | $13,209 |
Subtotal Spent on Operations | $38,493 | $50,517 | $57,209 |
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 | $38,493 | $50,517 | $57,209 |
Net Cash Flow | ($1,252) | $7,933 | $11,270 |
Cash Balance | $7,949 | $15,881 | $27,151 |
7.5 Projected Balance Sheet
The following table shows the Projected Balance Sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $7,949 | $15,881 | $27,151 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $7,949 | $15,881 | $27,151 |
Long-term Assets | |||
Long-term Assets | $5,000 | $5,000 | $5,000 |
Accumulated Depreciation | $996 | $1,992 | $2,988 |
Total Long-term Assets | $4,004 | $3,008 | $2,012 |
Total Assets | $11,953 | $18,889 | $29,163 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $508 | $896 | $1,103 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $508 | $896 | $1,103 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $508 | $896 | $1,103 |
Paid-in Capital | $15,000 | $15,000 | $15,000 |
Retained Earnings | ($800) | ($3,555) | $2,993 |
Earnings | ($2,755) | $6,548 | $10,068 |
Total Capital | $11,445 | $17,993 | $28,060 |
Total Liabilities and Capital | $11,953 | $18,889 | $29,163 |
Net Worth | $11,445 | $17,993 | $28,060 |
7.6 Business Ratios
Business Ratios for Write Bike are shown in the table below using the NAICS code 711510 for Independent Writers.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 56.95% | 17.16% | 11.74% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 49.83% |
Total Current Assets | 66.50% | 84.08% | 93.10% | 79.65% |
Long-term Assets | 33.50% | 15.92% | 6.90% | 20.35% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 4.25% | 4.75% | 3.78% | 34.02% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 21.07% |
Total Liabilities | 4.25% | 4.75% | 3.78% | 55.09% |
Net Worth | 95.75% | 95.25% | 96.22% | 44.91% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 100.00% | 100.00% | 100.00% | 100.00% |
Selling, General & Administrative Expenses | 107.40% | 88.80% | 85.30% | 75.93% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 2.60% |
Profit Before Interest and Taxes | -7.40% | 16.00% | 21.00% | 1.62% |
Main Ratios | ||||
Current | 15.66 | 17.72 | 24.63 | 1.69 |
Quick | 15.66 | 17.72 | 24.63 | 1.37 |
Total Debt to Total Assets | 4.25% | 4.75% | 3.78% | 60.72% |
Pre-tax Return on Net Worth | -24.07% | 51.99% | 51.25% | 5.11% |
Pre-tax Return on Assets | -23.05% | 49.52% | 49.32% | 13.02% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -7.40% | 11.20% | 14.70% | n.a |
Return on Equity | -24.07% | 36.39% | 35.88% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 15.76 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 23 | 27 | n.a |
Total Asset Turnover | 3.12 | 3.09 | 2.35 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.04 | 0.05 | 0.04 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $7,441 | $14,985 | $26,048 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.32 | 0.32 | 0.43 | n.a |
Current Debt/Total Assets | 4% | 5% | 4% | n.a |
Acid Test | 15.66 | 17.72 | 24.63 | n.a |
Sales/Net Worth | 3.25 | 3.25 | 2.44 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |