The financial picture is quite encouraging. We will be slow to take on debt and heavily investing our own assets, but with our increase in sales we do expect to apply for a credit line with the bank, to a limit of $50,000. The credit line is supported by assets.
The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:
Our break-even analysis is based on running costs, the "burn-rate" costs we incur to keep the business running, not on theoretical fixed costs that would be relevant only if we were closing. The essential insight here is that our sales level seems to be running comfortably above break-even.
We expect to be profitable in the first year, with profits increasing over the next two years, as we establish a loyal customer base.
The following table and chart is the projected cash flow for three years.
As shown in the balance sheet in the following table, we expect a healthy growth in net worth. The monthly projections are in the appendices.
Standard business ratios are included in the following table. Industry profile ratios are shown for comparison, and are based on Standard Industrial Classification (SIC) code 5812.0600, Pizza Restaurants. The ratios show a plan for balanced, healthy growth. Our return on sales and return on assets remain strong in percentage terms.