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Shipping, Freight & Trucking icon Packaging and Shipping Business Plan

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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.

Packaging and shipping business plan, financial plan chart image

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.

Packaging and shipping business plan, financial plan chart image

Packaging and shipping business plan, financial plan chart image

Packaging and shipping business plan, financial plan chart image

Packaging and shipping business plan, financial plan chart image

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.

Packaging and shipping business plan, financial plan chart image

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