Pita Pal
Financial Plan
The following sections will detail important financial information.
7.1 Important Assumptions
The following table will detail 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 |
7.2 Break-even Analysis
The following table and chart show our Break-even Analysis.
| Break-even Analysis | |
| Monthly Revenue Break-even | $9,799 |
| Assumptions: | |
| Average Percent Variable Cost | 27% |
| Estimated Monthly Fixed Cost | $7,149 |
7.3 Projected Profit and Loss
The following table and charts illustrate the Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $68,673 | $145,299 | $203,676 |
| Direct Cost of Sales | $18,571 | $39,292 | $55,079 |
| Other Costs of Goods | $0 | $0 | $0 |
| Total Cost of Sales | $18,571 | $39,292 | $55,079 |
| Gross Margin | $50,102 | $106,007 | $148,598 |
| Gross Margin % | 72.96% | 72.96% | 72.96% |
| Expenses | |||
| Payroll | $54,600 | $70,200 | $73,200 |
| Sales and Marketing and Other Expenses | $2,400 | $2,400 | $2,400 |
| Depreciation | $5,004 | $5,004 | $5,004 |
| Rent | $9,000 | $9,000 | $9,000 |
| Utilities | $3,600 | $3,600 | $3,600 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Payroll Taxes | $8,190 | $10,530 | $10,980 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $85,794 | $103,734 | $107,184 |
| Profit Before Interest and Taxes | ($35,691) | $2,273 | $41,414 |
| EBITDA | ($30,688) | $7,277 | $46,418 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $682 | $12,424 |
| Net Profit | ($35,691) | $1,591 | $28,990 |
| Net Profit/Sales | -51.97% | 1.09% | 14.23% |
7.4 Projected Cash Flow
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 | $68,673 | $145,299 | $203,676 |
| Subtotal Cash from Operations | $68,673 | $145,299 | $203,676 |
| 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 | $68,673 | $145,299 | $203,676 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $54,600 | $70,200 | $73,200 |
| Bill Payments | $40,474 | $67,160 | $94,183 |
| Subtotal Spent on Operations | $95,074 | $137,360 | $167,383 |
| 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 | $95,074 | $137,360 | $167,383 |
| Net Cash Flow | ($26,401) | $7,939 | $36,293 |
| Cash Balance | $8,099 | $16,037 | $52,331 |
7.5 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 | $8,099 | $16,037 | $52,331 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $8,099 | $16,037 | $52,331 |
| Long-term Assets | |||
| Long-term Assets | $25,000 | $25,000 | $25,000 |
| Accumulated Depreciation | $5,004 | $10,008 | $15,012 |
| Total Long-term Assets | $19,996 | $14,992 | $9,988 |
| Total Assets | $28,095 | $31,030 | $62,319 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $4,287 | $5,630 | $7,930 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $4,287 | $5,630 | $7,930 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $4,287 | $5,630 | $7,930 |
| Paid-in Capital | $65,000 | $65,000 | $65,000 |
| Retained Earnings | ($5,500) | ($41,191) | ($39,601) |
| Earnings | ($35,691) | $1,591 | $28,990 |
| Total Capital | $23,809 | $25,399 | $54,389 |
| Total Liabilities and Capital | $28,095 | $31,030 | $62,319 |
| Net Worth | $23,809 | $25,399 | $54,389 |
7.6 Business Ratios
The following table displays Business Ratios of this company as well as those within the restaurant industry.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 111.58% | 40.18% | 6.96% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 28.39% |
| Total Current Assets | 28.83% | 51.68% | 83.97% | 37.68% |
| Long-term Assets | 71.17% | 48.32% | 16.03% | 62.32% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 15.26% | 18.15% | 12.72% | 19.17% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 29.21% |
| Total Liabilities | 15.26% | 18.15% | 12.72% | 48.38% |
| Net Worth | 84.74% | 81.85% | 87.28% | 51.62% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 72.96% | 72.96% | 72.96% | 59.31% |
| Selling, General & Administrative Expenses | 124.93% | 71.86% | 58.72% | 39.09% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 2.75% |
| Profit Before Interest and Taxes | -51.97% | 1.56% | 20.33% | 1.59% |
| Main Ratios | ||||
| Current | 1.89 | 2.85 | 6.60 | 1.26 |
| Quick | 1.89 | 2.85 | 6.60 | 0.87 |
| Total Debt to Total Assets | 15.26% | 18.15% | 12.72% | 54.38% |
| Pre-tax Return on Net Worth | -149.91% | 8.95% | 76.14% | 3.27% |
| Pre-tax Return on Assets | -127.04% | 7.32% | 66.45% | 7.17% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -51.97% | 1.09% | 14.23% | n.a |
| Return on Equity | -149.91% | 6.26% | 53.30% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 10.44 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 26 | 26 | n.a |
| Total Asset Turnover | 2.44 | 4.68 | 3.27 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.18 | 0.22 | 0.15 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $3,812 | $10,407 | $44,401 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.41 | 0.21 | 0.31 | n.a |
| Current Debt/Total Assets | 15% | 18% | 13% | n.a |
| Acid Test | 1.89 | 2.85 | 6.60 | n.a |
| Sales/Net Worth | 2.88 | 5.72 | 3.74 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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