Scan Lab
Financial Plan
The following sections will outline the financial planning for Scan Lab.
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 what is needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $40,582 |
| Assumptions: | |
| Average Percent Variable Cost | 23% |
| Estimated Monthly Fixed Cost | $31,248 |
8.3 Projected Profit and Loss
The following table and charts will indicate Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $422,344 | $442,500 | $486,750 |
| Direct Cost of Sales | $97,139 | $102,300 | $105,440 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $97,139 | $102,300 | $105,440 |
| Gross Margin | $325,205 | $340,200 | $381,310 |
| Gross Margin % | 77.00% | 76.88% | 78.34% |
| Expenses | |||
| Payroll | $127,200 | $131,016 | $134,846 |
| Sales and Marketing and Other Expenses | $6,000 | $0 | $0 |
| Depreciation | $172,300 | $0 | $0 |
| Rent | $24,000 | $0 | $0 |
| Utilities | $6,000 | $0 | $0 |
| Insurance | $18,000 | $0 | $0 |
| Payroll Taxes | $19,080 | $0 | $0 |
| Other | $2,400 | $0 | $0 |
| Total Operating Expenses | $374,980 | $131,016 | $134,846 |
| Profit Before Interest and Taxes | ($49,775) | $209,184 | $246,464 |
| EBITDA | $122,525 | $209,184 | $246,464 |
| Interest Expense | $79,500 | $68,000 | $56,000 |
| Taxes Incurred | $0 | $42,355 | $57,139 |
| Net Profit | ($129,275) | $98,829 | $133,325 |
| Net Profit/Sales | -30.61% | 22.33% | 27.39% |
8.4 Projected Cash Flow
The following table and chart will indicate Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $105,586 | $110,625 | $121,688 |
| Cash from Receivables | $240,226 | $328,223 | $357,044 |
| Subtotal Cash from Operations | $345,812 | $438,848 | $478,732 |
| 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 | $345,812 | $438,848 | $478,732 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $127,200 | $131,016 | $134,846 |
| Bill Payments | $227,987 | $219,308 | $218,092 |
| Subtotal Spent on Operations | $355,187 | $350,324 | $352,938 |
| 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 | $120,000 | $120,000 | $120,000 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $475,187 | $470,324 | $472,938 |
| Net Cash Flow | ($129,375) | ($31,477) | $5,793 |
| Cash Balance | $188,525 | $157,048 | $162,841 |
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 | $188,525 | $157,048 | $162,841 |
| Accounts Receivable | $76,532 | $80,184 | $88,203 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $265,057 | $237,232 | $251,044 |
| Long-term Assets | |||
| Long-term Assets | $861,500 | $861,500 | $861,500 |
| Accumulated Depreciation | $172,300 | $172,300 | $172,300 |
| Total Long-term Assets | $689,200 | $689,200 | $689,200 |
| Total Assets | $954,257 | $926,433 | $940,244 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $24,132 | $17,479 | $17,965 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $24,132 | $17,479 | $17,965 |
| Long-term Liabilities | $740,000 | $620,000 | $500,000 |
| Total Liabilities | $764,132 | $637,479 | $517,965 |
| Paid-in Capital | $330,000 | $330,000 | $330,000 |
| Retained Earnings | ($10,600) | ($139,875) | ($41,046) |
| Earnings | ($129,275) | $98,829 | $133,325 |
| Total Capital | $190,125 | $288,954 | $422,279 |
| Total Liabilities and Capital | $954,257 | $926,433 | $940,244 |
| Net Worth | $190,125 | $288,954 | $422,279 |
8.6 Business Ratios
The following table details Business Ratios as they relate to Scan Lab, as well as the Diagnostic Imaging Center industry, NAICS code 612512, that it participates in.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 4.77% | 10.00% | 8.83% |
| Percent of Total Assets | ||||
| Accounts Receivable | 8.02% | 8.66% | 9.38% | 29.41% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 48.00% |
| Total Current Assets | 27.78% | 25.61% | 26.70% | 80.30% |
| Long-term Assets | 72.22% | 74.39% | 73.30% | 19.70% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 2.53% | 1.89% | 1.91% | 30.82% |
| Long-term Liabilities | 77.55% | 66.92% | 53.18% | 21.77% |
| Total Liabilities | 80.08% | 68.81% | 55.09% | 52.59% |
| Net Worth | 19.92% | 31.19% | 44.91% | 47.41% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 77.00% | 76.88% | 78.34% | 100.00% |
| Selling, General & Administrative Expenses | 102.84% | 0.00% | 0.00% | 66.55% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.85% |
| Profit Before Interest and Taxes | -11.79% | 47.27% | 50.63% | 5.72% |
| Main Ratios | ||||
| Current | 10.98 | 13.57 | 13.97 | 1.77 |
| Quick | 10.98 | 13.57 | 13.97 | 1.49 |
| Total Debt to Total Assets | 80.08% | 68.81% | 55.09% | 54.16% |
| Pre-tax Return on Net Worth | -67.99% | 48.86% | 45.10% | 6.71% |
| Pre-tax Return on Assets | -13.55% | 15.24% | 20.26% | 14.64% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -30.61% | 22.33% | 27.39% | n.a |
| Return on Equity | -67.99% | 34.20% | 31.57% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.14 | 4.14 | 4.14 | n.a |
| Collection Days | 56 | 86 | 84 | n.a |
| Accounts Payable Turnover | 10.45 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 36 | 30 | n.a |
| Total Asset Turnover | 0.44 | 0.48 | 0.52 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 4.02 | 2.21 | 1.23 | n.a |
| Current Liab. to Liab. | 0.03 | 0.03 | 0.03 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $240,925 | $219,754 | $233,079 | n.a |
| Interest Coverage | -0.63 | 3.08 | 4.40 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 2.26 | 2.09 | 1.93 | n.a |
| Current Debt/Total Assets | 3% | 2% | 2% | n.a |
| Acid Test | 7.81 | 8.99 | 9.06 | n.a |
| Sales/Net Worth | 2.22 | 1.53 | 1.15 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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