Replay Plastics
Financial Plan
Forecast
Key assumptions
Key Assumptions:
- Replay has allowed for 30 days to collect receivables due to knowledge and experience with customers in the industry.
- Inventory turnover is predicted at 12 times, which is extremely conservative.
- The personnel burden includes contribution by the Company to employee health care.
- We have allowed for Accounts Receivable financing of 70% at an interest rate of 12% per annum.
- It is assumed that additional extrusion lines will be added in the second year, with down payments of 33% at time of order and balance paid at time of shipment (see Cash Flow for details). These will be purchased as long-term assets out of the cash flows of the business.
- General annual growth rates of 5% have been assumed on all sales prices and material and labor costs.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Net Profit (or Loss) by Year
Use of funds
Our start-up expenses are budgeted at $210,000, which is mostly for on-site contractor services during facility preparation. $50,000 has been set aside for legal and accounting, $25,000 for special consulting that may be required during start up and $50,000 each for local engineering and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period.
Our largest Start-up Requirement is the building of the recycling and extrusion facility. Its final value at completion is listed below as a long-term asset of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year.
Start-up Expenses
Legal & Accounting $50,000
Stationery etc. $5,000
Consultants $25,000
Lab Equipment $50,000
Local Engineering $50,000
Misc Start up $30,000
TOTAL START-UP EXPENSES $210,000
Sources of Funds
We will get a $800,000 dollar loan against our 3 million dollars of assets. Our Founders will put up a total of $1.5 million dollars. We will also have a group of VC investors that will put up the 2.7 million dollars. This will give replay plastics the 4.2 million that it needs to start.
Statements
Projected Profit and Loss
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Revenue | $17,891,955 | $24,639,900 | $24,639,900 |
| Direct Costs | $13,931,784 | $19,172,934 | $19,172,934 |
| Gross Margin | $3,960,171 | $5,466,966 | $5,466,966 |
| Gross Margin % | 22% | 22% | 22% |
| Operating Expenses | |||
| Salaries & Wages | $1,913,500 | $2,561,832 | $2,637,941 |
| Employee Related Expenses | $382,700 | $512,366 | $527,589 |
| Lease | $72,000 | $72,000 | $72,000 |
| Marketing | $357,839 | $492,798 | $492,798 |
| Utilities | $36,000 | $36,000 | $36,000 |
| Insurance | $36,000 | $36,000 | $36,000 |
| Equipment Rental | $178,920 | $246,399 | $246,399 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $2,976,959 | $3,957,395 | $4,048,726 |
| Operating Income | $983,212 | $1,509,571 | $1,418,240 |
| Interest Incurred | $38,105 | $33,837 | $29,350 |
| Depreciation and Amortization | $241,333 | $241,334 | $241,333 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $0 | $0 | $0 |
| Total Expenses | $17,188,181 | $23,405,500 | $23,492,343 |
| Net Profit | $703,774 | $1,234,400 | $1,147,557 |
| Net Profit/Sales | 4% | 5% | 5% |
Projected Balance Sheet
| Starting Balances | 2018 | 2019 | 2020 | |
|---|---|---|---|---|
| Cash | $645,000 | $1,506,676 | $2,894,711 | $4,191,415 |
| Accounts Receivable | $0 | $0 | $0 | |
| Inventory | $500,000 | $500,000 | $500,000 | $500,000 |
| Other Current Assets | $25,000 | $25,000 | $25,000 | $25,000 |
| Total Current Assets | $1,170,000 | $2,031,676 | $3,419,711 | $4,716,415 |
| Long-Term Assets | $3,620,000 | $3,620,000 | $3,620,000 | $3,620,000 |
| Accumulated Depreciation | ($241,333) | ($482,667) | ($724,000) | |
| Total Long-Term Assets | $3,620,000 | $3,378,667 | $3,137,333 | $2,896,000 |
| Total Assets | $4,790,000 | $5,410,343 | $6,557,044 | $7,612,415 |
| Accounts Payable | $0 | $0 | $0 | |
| Income Taxes Payable | $0 | $0 | $0 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | $83,431 | $87,699 | $92,186 | $96,902 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $83,431 | $87,699 | $92,186 | $96,902 |
| Long-Term Debt | $716,569 | $628,870 | $536,684 | $439,782 |
| Long-Term Liabilities | $716,569 | $628,870 | $536,684 | $439,782 |
| Total Liabilities | $800,000 | $716,569 | $628,870 | $536,684 |
| Paid-In Capital | $4,200,000 | $4,200,000 | $4,200,000 | $4,200,000 |
| Retained Earnings | ($210,000) | ($210,000) | $493,774 | $1,728,174 |
| Earnings | $703,774 | $1,234,400 | $1,147,557 | |
| Total Owner’s Equity | $3,990,000 | $4,693,774 | $5,928,174 | $7,075,731 |
| Total Liabilities & Equity | $4,790,000 | $5,410,343 | $6,557,044 | $7,612,415 |
Projected Cash Flow Statement
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $703,774 | $1,234,400 | $1,147,557 |
| Depreciation & Amortization | $241,333 | $241,333 | $241,333 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | $0 | $0 | $0 |
| Change in Accounts Payable | $0 | $0 | $0 |
| Change in Income Tax Payable | $0 | $0 | $0 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $945,107 | $1,475,734 | $1,388,890 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $4,268 | $4,487 | $4,716 |
| Change in Long-Term Debt | ($87,699) | ($92,186) | ($96,902) |
| Net Cash from Financing | ($83,431) | ($87,699) | ($92,186) |
| Cash at Beginning of Period | $645,000 | $1,506,676 | $2,894,711 |
| Net Change in Cash | $861,676 | $1,388,035 | $1,296,704 |
| Cash at End of Period | $1,506,676 | $2,894,711 | $4,191,415 |
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