House of Projectors
Financial Plan
The following section 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 what monthly revenue will be needed to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $10,246 |
| Assumptions: | |
| Average Percent Variable Cost | 0% |
| Estimated Monthly Fixed Cost | $10,246 |
8.3 Projected Profit and Loss
This projected table and these charts show the Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $52,271 | $181,178 | $222,948 |
| Direct Cost of Sales | $0 | $0 | $0 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $0 | $0 | $0 |
| Gross Margin | $52,271 | $181,178 | $222,948 |
| Gross Margin % | 100.00% | 100.00% | 100.00% |
| Expenses | |||
| Payroll | $85,700 | $109,200 | $119,000 |
| Sales and Marketing and Other Expenses | $2,400 | $12,846 | $17,440 |
| Depreciation | $9,996 | $9,996 | $9,996 |
| Rent | $7,800 | $8,200 | $8,500 |
| Utilities | $2,400 | $3,000 | $3,500 |
| Insurance | $1,800 | $2,000 | $22,000 |
| Payroll Taxes | $12,855 | $16,380 | $17,850 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $122,951 | $161,622 | $198,286 |
| Profit Before Interest and Taxes | ($70,681) | $19,556 | $24,662 |
| EBITDA | ($60,684) | $29,552 | $34,658 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $5,867 | $7,399 |
| Net Profit | ($70,681) | $13,689 | $17,263 |
| Net Profit/Sales | -135.22% | 7.56% | 7.74% |
8.4 Projected Cash Flow
The following chart and table present the Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $52,271 | $181,178 | $222,948 |
| Subtotal Cash from Operations | $52,271 | $181,178 | $222,948 |
| 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 | $52,271 | $181,178 | $222,948 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $85,700 | $109,200 | $119,000 |
| Bill Payments | $24,877 | $46,702 | $74,355 |
| Subtotal Spent on Operations | $110,577 | $155,902 | $193,355 |
| 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 | $110,577 | $155,902 | $193,355 |
| Net Cash Flow | ($58,306) | $25,276 | $29,593 |
| Cash Balance | $9,794 | $35,070 | $64,663 |
8.5 Projected Balance Sheet
The following table displays the Projected Balance Sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $9,794 | $35,070 | $64,663 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $9,794 | $35,070 | $64,663 |
| Long-term Assets | |||
| Long-term Assets | $50,000 | $50,000 | $50,000 |
| Accumulated Depreciation | $9,996 | $19,992 | $29,988 |
| Total Long-term Assets | $40,004 | $30,008 | $20,012 |
| Total Assets | $49,797 | $65,078 | $84,675 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $2,378 | $3,969 | $6,303 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $2,378 | $3,969 | $6,303 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $2,378 | $3,969 | $6,303 |
| Paid-in Capital | $125,000 | $125,000 | $125,000 |
| Retained Earnings | ($6,900) | ($77,581) | ($63,891) |
| Earnings | ($70,681) | $13,689 | $17,263 |
| Total Capital | $47,419 | $61,109 | $78,372 |
| Total Liabilities and Capital | $49,797 | $65,078 | $84,675 |
| Net Worth | $47,419 | $61,109 | $78,372 |
8.6 Business Ratios
Business Ratios for HOP. SIC class/code: Office machine rental, except computers – 7359.0505
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 246.61% | 23.05% | 7.07% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 44.65% |
| Total Current Assets | 19.67% | 53.89% | 76.37% | 76.22% |
| Long-term Assets | 80.33% | 46.11% | 23.63% | 23.78% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.78% | 6.10% | 7.44% | 33.47% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 16.23% |
| Total Liabilities | 4.78% | 6.10% | 7.44% | 49.70% |
| Net Worth | 95.22% | 93.90% | 92.56% | 50.30% |
| 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 | 235.22% | 92.44% | 92.26% | 84.88% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.01% |
| Profit Before Interest and Taxes | -135.22% | 10.79% | 11.06% | 1.94% |
| Main Ratios | ||||
| Current | 4.12 | 8.84 | 10.26 | 1.73 |
| Quick | 4.12 | 8.84 | 10.26 | 1.33 |
| Total Debt to Total Assets | 4.78% | 6.10% | 7.44% | 3.77% |
| Pre-tax Return on Net Worth | -149.05% | 32.00% | 31.47% | 57.72% |
| Pre-tax Return on Assets | -141.94% | 30.05% | 29.13% | 8.92% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -135.22% | 7.56% | 7.74% | n.a |
| Return on Equity | -149.05% | 22.40% | 22.03% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 11.46 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 24 | 24 | n.a |
| Total Asset Turnover | 1.05 | 2.78 | 2.63 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.05 | 0.06 | 0.08 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $7,416 | $31,101 | $58,360 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.95 | 0.36 | 0.38 | n.a |
| Current Debt/Total Assets | 5% | 6% | 7% | n.a |
| Acid Test | 4.12 | 8.84 | 10.26 | n.a |
| Sales/Net Worth | 1.10 | 2.96 | 2.84 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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