AuctionShipper
Financial Plan
The following sections 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 the monthly revenue needed to reach the break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $17,351 |
Assumptions: | |
Average Percent Variable Cost | 67% |
Estimated Monthly Fixed Cost | $5,723 |
8.3 Projected Profit and Loss
The following table will indicate Projected Profit and Loss.




Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $120,710 | $185,184 | $284,562 |
Direct Cost of Sales | $80,896 | $131,351 | $201,840 |
Other Costs of Sales | $0 | $0 | $0 |
Total Cost of Sales | $80,896 | $131,351 | $201,840 |
Gross Margin | $39,814 | $53,833 | $82,721 |
Gross Margin % | 32.98% | 29.07% | 29.07% |
Expenses | |||
Payroll | $46,500 | $56,000 | $65,000 |
Sales and Marketing and Other Expenses | $2,400 | $2,400 | $2,400 |
Depreciation | $799 | $799 | $799 |
Rent | $8,400 | $8,400 | $9,000 |
Utilities | $1,800 | $1,800 | $1,800 |
Insurance | $1,800 | $1,800 | $1,800 |
Payroll Taxes | $6,975 | $8,400 | $9,750 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $68,674 | $79,599 | $90,549 |
Profit Before Interest and Taxes | ($28,860) | ($25,767) | ($7,828) |
EBITDA | ($28,061) | ($24,968) | ($7,029) |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $0 | $0 |
Net Profit | ($28,860) | ($25,767) | ($7,828) |
Net Profit/Sales | -23.91% | -13.91% | -2.75% |
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 | $120,710 | $185,184 | $284,562 |
Subtotal Cash from Operations | $120,710 | $185,184 | $284,562 |
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 | $120,710 | $185,184 | $284,562 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $46,500 | $56,000 | $65,000 |
Bill Payments | $90,234 | $153,517 | $220,637 |
Subtotal Spent on Operations | $136,734 | $209,517 | $285,637 |
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 | $136,734 | $209,517 | $285,637 |
Net Cash Flow | ($16,025) | ($24,334) | ($1,075) |
Cash Balance | $43,700 | $19,366 | $18,292 |
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 | $43,700 | $19,366 | $18,292 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $43,700 | $19,366 | $18,292 |
Long-term Assets | |||
Long-term Assets | $4,000 | $4,000 | $4,000 |
Accumulated Depreciation | $799 | $1,598 | $2,397 |
Total Long-term Assets | $3,201 | $2,402 | $1,603 |
Total Assets | $46,901 | $21,768 | $19,895 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $12,036 | $12,670 | $18,624 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $12,036 | $12,670 | $18,624 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $12,036 | $12,670 | $18,624 |
Paid-in Capital | $70,000 | $70,000 | $70,000 |
Retained Earnings | ($6,275) | ($35,135) | ($60,902) |
Earnings | ($28,860) | ($25,767) | ($7,828) |
Total Capital | $34,865 | $9,098 | $1,271 |
Total Liabilities and Capital | $46,901 | $21,768 | $19,895 |
Net Worth | $34,865 | $9,098 | $1,271 |
8.6 Business Ratios
The following table illustrates Business Ratios specific to this company as well as the industry.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 53.41% | 53.66% | 4.21% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 36.72% |
Total Current Assets | 93.18% | 88.97% | 91.94% | 63.63% |
Long-term Assets | 6.82% | 11.03% | 8.06% | 36.37% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 25.66% | 58.20% | 93.61% | 32.89% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 18.63% |
Total Liabilities | 25.66% | 58.20% | 93.61% | 51.52% |
Net Worth | 74.34% | 41.80% | 6.39% | 48.48% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 32.98% | 29.07% | 29.07% | 34.93% |
Selling, General & Administrative Expenses | 56.89% | 42.98% | 31.82% | 22.73% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.73% |
Profit Before Interest and Taxes | -23.91% | -13.91% | -2.75% | 1.04% |
Main Ratios | ||||
Current | 3.63 | 1.53 | 0.98 | 1.48 |
Quick | 3.63 | 1.53 | 0.98 | 1.22 |
Total Debt to Total Assets | 25.66% | 58.20% | 93.61% | 57.32% |
Pre-tax Return on Net Worth | -82.78% | -283.20% | -615.95% | 2.62% |
Pre-tax Return on Assets | -61.53% | -118.37% | -39.34% | 6.14% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -23.91% | -13.91% | -2.75% | n.a |
Return on Equity | -82.78% | -283.20% | -615.95% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 8.50 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 29 | 25 | n.a |
Total Asset Turnover | 2.57 | 8.51 | 14.30 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.35 | 1.39 | 14.66 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $31,664 | $6,696 | ($332) | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.39 | 0.12 | 0.07 | n.a |
Current Debt/Total Assets | 26% | 58% | 94% | n.a |
Acid Test | 3.63 | 1.53 | 0.98 | n.a |
Sales/Net Worth | 3.46 | 20.35 | 223.92 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |