Packaging and Shipping Business Plan

Financial Plan

The following sections will outline important financial information.

The following table details important financial assumptions.

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

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%

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

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

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