Pizza Delivery Business Plan

Tsunami Pizza

Financial Plan

The following is the financial plan for Tsunami Pizza.

7.1 Break-even Analysis

The following table and chart show the Break-even Analysis.

Pizza delivery business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$12,803

Assumptions:
Average Percent Variable Cost	15%
Estimated Monthly Fixed Cost	$10,925

7.2 Projected Profit and Loss

The following table and charts show the projected profit and loss for three years.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$176,500	$196,000	$219,000
Direct Cost of Sales	$25,900	$31,800	$38,400
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$25,900	$31,800	$38,400

Gross Margin	$150,600	$164,200	$180,600
Gross Margin %	85.33%	83.78%	82.47%


Expenses
Payroll	$90,000	$96,000	$105,000
Sales and Marketing and Other Expenses	$8,000	$8,000	$8,000
Depreciation	$1,596	$1,600	$1,600
Leased Equipment	$0	$0	$0
Utilities	$6,000	$6,000	$6,000
Insurance	$0	$0	$0
Rent	$12,000	$12,000	$12,000
Payroll Taxes	$13,500	$14,400	$15,750
Other	$0	$0	$0

Total Operating Expenses	$131,096	$138,000	$148,350

Profit Before Interest and Taxes	$19,504	$26,200	$32,250
EBITDA	$21,100	$27,800	$33,850
Interest Expense	$0	$0	$0
Taxes Incurred	$5,851	$7,860	$9,675

Net Profit	$13,653	$18,340	$22,575
Net Profit/Sales	7.74%	9.36%	10.31%

7.3 Projected Cash Flow

The following table and chart is the projected cash flow for three years.

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$176,500	$196,000	$219,000
Subtotal Cash from Operations	$176,500	$196,000	$219,000

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	$176,500	$196,000	$219,000

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$90,000	$96,000	$105,000
Bill Payments	$63,520	$81,211	$89,022
Subtotal Spent on Operations	$153,520	$177,211	$194,022

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	$153,520	$177,211	$194,022

Net Cash Flow	$22,980	$18,789	$24,978
Cash Balance	$27,980	$46,769	$71,747

7.4 Projected Balance Sheet

The following table is the projected balance sheet for three years.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$27,980	$46,769	$71,747
Other Current Assets	$0	$0	$0
Total Current Assets	$27,980	$46,769	$71,747

Long-term Assets
Long-term Assets	$8,000	$8,000	$8,000
Accumulated Depreciation	$1,596	$3,196	$4,796
Total Long-term Assets	$6,404	$4,804	$3,204
Total Assets	$34,384	$51,573	$74,951

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$7,731	$6,580	$7,383
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$7,731	$6,580	$7,383

Long-term Liabilities	$0	$0	$0
Total Liabilities	$7,731	$6,580	$7,383

Paid-in Capital	$50,000	$50,000	$50,000
Retained Earnings	($37,000)	($23,347)	($5,007)
Earnings	$13,653	$18,340	$22,575
Total Capital	$26,653	$44,993	$67,568
Total Liabilities and Capital	$34,384	$51,573	$74,951

Net Worth	$26,653	$44,993	$67,568

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5812, Eating Places, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	11.05%	11.73%	7.60%

Percent of Total Assets
Other Current Assets	0.00%	0.00%	0.00%	35.60%
Total Current Assets	81.37%	90.69%	95.73%	43.70%
Long-term Assets	18.63%	9.31%	4.27%	56.30%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	22.48%	12.76%	9.85%	32.70%
Long-term Liabilities	0.00%	0.00%	0.00%	28.50%
Total Liabilities	22.48%	12.76%	9.85%	61.20%
Net Worth	77.52%	87.24%	90.15%	38.80%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	85.33%	83.78%	82.47%	60.50%
Selling, General & Administrative Expenses	77.59%	74.42%	72.16%	39.80%
Advertising Expenses	4.53%	4.08%	3.65%	3.20%
Profit Before Interest and Taxes	11.05%	13.37%	14.73%	0.70%

Main Ratios
Current	3.62	7.11	9.72	0.98
Quick	3.62	7.11	9.72	0.65
Total Debt to Total Assets	22.48%	12.76%	9.85%	61.20%
Pre-tax Return on Net Worth	73.18%	58.23%	47.73%	1.70%
Pre-tax Return on Assets	56.72%	50.80%	43.03%	4.30%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	7.74%	9.36%	10.31%	n.a
Return on Equity	51.22%	40.76%	33.41%	n.a

Activity Ratios
Accounts Payable Turnover	9.22	12.17	12.17	n.a
Payment Days	27	33	28	n.a
Total Asset Turnover	5.13	3.80	2.92	n.a

Debt Ratios
Debt to Net Worth	0.29	0.15	0.11	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a

Liquidity Ratios
Net Working Capital	$20,249	$40,189	$64,364	n.a
Interest Coverage	0.00	0.00	0.00	n.a

Additional Ratios
Assets to Sales	0.19	0.26	0.34	n.a
Current Debt/Total Assets	22%	13%	10%	n.a
Acid Test	3.62	7.11	9.72	n.a
Sales/Net Worth	6.62	4.36	3.24	n.a
Dividend Payout	0.00	0.00	0.00	n.a