Advocates for Legal Equal Access
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 | 0.00% | 0.00% | 0.00% |
Other | 0 | 0 | 0 |
7.2 Projected Surplus or Deficit
The following table will indicate surplus or deficit.

Surplus and Deficit | |||
Year 1 | Year 2 | Year 3 | |
Funding | $58,991 | $76,409 | $80,873 |
Direct Cost | $0 | $0 | $0 |
Other Production Expenses | $0 | $0 | $0 |
Total Direct Cost | $0 | $0 | $0 |
Gross Surplus | $58,991 | $76,409 | $80,873 |
Gross Surplus % | 100.00% | 100.00% | 100.00% |
Expenses | |||
Payroll | $38,500 | $53,000 | $55,000 |
Sales and Marketing and Other Expenses | $1,200 | $1,200 | $1,200 |
Depreciation | $936 | $936 | $936 |
Web site + DSL | $1,620 | $1,620 | $1,620 |
Utilities | $600 | $600 | $600 |
Insurance | $2,100 | $2,100 | $2,100 |
Rent | $6,000 | $6,000 | $6,000 |
Payroll Taxes | $5,775 | $7,950 | $8,250 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $56,731 | $73,406 | $75,706 |
Surplus Before Interest and Taxes | $2,260 | $3,003 | $5,167 |
EBITDA | $3,196 | $3,939 | $6,103 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $0 | $0 |
Net Surplus | $2,260 | $3,003 | $5,167 |
Net Surplus/Funding | 3.83% | 3.93% | 6.39% |
7.3 Break-even Analysis
The Break-even Analysis is shown below.

Break-even Analysis | |
Monthly Revenue Break-even | $4,728 |
Assumptions: | |
Average Percent Variable Cost | 0% |
Estimated Monthly Fixed Cost | $4,728 |
7.4 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 Funding | $58,991 | $76,409 | $80,873 |
Subtotal Cash from Operations | $58,991 | $76,409 | $80,873 |
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 | $58,991 | $76,409 | $80,873 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $38,500 | $53,000 | $55,000 |
Bill Payments | $15,773 | $19,392 | $19,745 |
Subtotal Spent on Operations | $54,273 | $72,392 | $74,745 |
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 | $54,273 | $72,392 | $74,745 |
Net Cash Flow | $4,719 | $4,017 | $6,128 |
Cash Balance | $9,819 | $13,835 | $19,963 |
7.5 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 | $9,819 | $13,835 | $19,963 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $9,819 | $13,835 | $19,963 |
Long-term Assets | |||
Long-term Assets | $4,700 | $4,700 | $4,700 |
Accumulated Depreciation | $936 | $1,872 | $2,808 |
Total Long-term Assets | $3,764 | $2,828 | $1,892 |
Total Assets | $13,583 | $16,663 | $21,855 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $1,523 | $1,600 | $1,625 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $1,523 | $1,600 | $1,625 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $1,523 | $1,600 | $1,625 |
Paid-in Capital | $10,000 | $10,000 | $10,000 |
Accumulated Surplus/Deficit | ($200) | $2,060 | $5,063 |
Surplus/Deficit | $2,260 | $3,003 | $5,167 |
Total Capital | $12,060 | $15,063 | $20,230 |
Total Liabilities and Capital | $13,583 | $16,663 | $21,855 |
Net Worth | $12,060 | $15,063 | $20,230 |
7.6 Business Ratios
The following table outlines some of the more important ratios from the Offices of Laywers industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 8111.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Funding Growth | 0.00% | 29.53% | 5.84% | 8.50% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 66.90% |
Total Current Assets | 72.29% | 83.03% | 91.34% | 75.50% |
Long-term Assets | 27.71% | 16.97% | 8.66% | 24.50% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 11.21% | 9.60% | 7.44% | 50.20% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 12.90% |
Total Liabilities | 11.21% | 9.60% | 7.44% | 63.10% |
Net Worth | 88.79% | 90.40% | 92.56% | 36.90% |
Percent of Funding | ||||
Funding | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Surplus | 100.00% | 100.00% | 100.00% | 0.00% |
Selling, General & Administrative Expenses | 96.17% | 96.07% | 93.61% | 58.20% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.50% |
Surplus Before Interest and Taxes | 3.83% | 3.93% | 6.39% | 3.40% |
Main Ratios | ||||
Current | 6.45 | 8.65 | 12.29 | 1.54 |
Quick | 6.45 | 8.65 | 12.29 | 1.09 |
Total Debt to Total Assets | 11.21% | 9.60% | 7.44% | 63.10% |
Pre-tax Return on Net Worth | 18.74% | 19.94% | 25.54% | 12.30% |
Pre-tax Return on Assets | 16.64% | 18.02% | 23.64% | 33.40% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Surplus Margin | 3.83% | 3.93% | 6.39% | n.a |
Return on Equity | 18.74% | 19.94% | 25.54% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 11.36 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 29 | 30 | n.a |
Total Asset Turnover | 4.34 | 4.59 | 3.70 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.13 | 0.11 | 0.08 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $8,296 | $12,235 | $18,338 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Funding | 0.23 | 0.22 | 0.27 | n.a |
Current Debt/Total Assets | 11% | 10% | 7% | n.a |
Acid Test | 6.45 | 8.65 | 12.29 | n.a |
Funding/Net Worth | 4.89 | 5.07 | 4.00 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |