Colloquy Grog Shop
Financial Plan
The following sections will outline important financial information.
7.1 Important Assumptions
The following table details 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 Break-even Analysis indicates that approximately $25,000 will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $24,867 |
| Assumptions: | |
| Average Percent Variable Cost | 32% |
| Estimated Monthly Fixed Cost | $16,969 |
7.3 Projected Profit and Loss
The following table will indicate projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $175,829 | $450,282 | $492,811 |
| Direct Cost of Sales | $55,842 | $143,005 | $156,512 |
| Other Production Expenses | $0 | $0 | $0 |
| Total Cost of Sales | $55,842 | $143,005 | $156,512 |
| Gross Margin | $119,987 | $307,277 | $336,299 |
| Gross Margin % | 68.24% | 68.24% | 68.24% |
| Expenses | |||
| Payroll | $144,900 | $162,980 | $167,980 |
| Sales and Marketing and Other Expenses | $2,400 | $2,400 | $2,400 |
| Depreciation | $9,996 | $9,996 | $9,996 |
| Permits | $1,200 | $1,200 | $1,200 |
| Utilities | $2,400 | $2,400 | $2,400 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Rent | $18,000 | $18,000 | $18,000 |
| Payroll Taxes | $21,735 | $24,447 | $25,197 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $203,631 | $224,423 | $230,173 |
| Profit Before Interest and Taxes | ($83,644) | $82,854 | $106,126 |
| EBITDA | ($73,648) | $92,850 | $116,122 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $24,856 | $31,838 |
| Net Profit | ($83,644) | $57,997 | $74,288 |
| Net Profit/Sales | -47.57% | 12.88% | 15.07% |
7.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $175,829 | $450,282 | $492,811 |
| Subtotal Cash from Operations | $175,829 | $450,282 | $492,811 |
| 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 | $175,829 | $450,282 | $492,811 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $144,900 | $162,980 | $167,980 |
| Bill Payments | $92,562 | $213,297 | $238,801 |
| Subtotal Spent on Operations | $237,462 | $376,277 | $406,781 |
| 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 | $237,462 | $376,277 | $406,781 |
| Net Cash Flow | ($61,633) | $74,004 | $86,030 |
| Cash Balance | $7,217 | $81,221 | $167,251 |
7.5 Projected Balance Sheet
The following chart and table will indicate projected cash flow.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $7,217 | $81,221 | $167,251 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $7,217 | $81,221 | $167,251 |
| Long-term Assets | |||
| Long-term Assets | $50,000 | $50,000 | $50,000 |
| Accumulated Depreciation | $9,996 | $19,992 | $29,988 |
| Total Long-term Assets | $40,004 | $30,008 | $20,012 |
| Total Assets | $47,221 | $111,229 | $187,263 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $12,015 | $18,025 | $19,771 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $12,015 | $18,025 | $19,771 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $12,015 | $18,025 | $19,771 |
| Paid-in Capital | $120,000 | $120,000 | $120,000 |
| Retained Earnings | ($1,150) | ($84,794) | ($26,796) |
| Earnings | ($83,644) | $57,997 | $74,288 |
| Total Capital | $35,206 | $93,204 | $167,492 |
| Total Liabilities and Capital | $47,221 | $111,229 | $187,263 |
| Net Worth | $35,206 | $93,204 | $167,492 |
7.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 156.09% | 9.45% | 7.60% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 35.60% |
| Total Current Assets | 15.28% | 73.02% | 89.31% | 43.70% |
| Long-term Assets | 84.72% | 26.98% | 10.69% | 56.30% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 25.44% | 16.21% | 10.56% | 32.70% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 28.50% |
| Total Liabilities | 25.44% | 16.21% | 10.56% | 61.20% |
| Net Worth | 74.56% | 83.79% | 89.44% | 38.80% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 68.24% | 68.24% | 68.24% | 60.50% |
| Selling, General & Administrative Expenses | 115.81% | 55.36% | 53.17% | 39.80% |
| Advertising Expenses | 0.68% | 0.27% | 0.24% | 3.20% |
| Profit Before Interest and Taxes | -47.57% | 18.40% | 21.53% | 0.70% |
| Main Ratios | ||||
| Current | 0.60 | 4.51 | 8.46 | 0.98 |
| Quick | 0.60 | 4.51 | 8.46 | 0.65 |
| Total Debt to Total Assets | 25.44% | 16.21% | 10.56% | 61.20% |
| Pre-tax Return on Net Worth | -237.58% | 88.90% | 63.36% | 1.70% |
| Pre-tax Return on Assets | -177.13% | 74.49% | 56.67% | 4.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -47.57% | 12.88% | 15.07% | n.a |
| Return on Equity | -237.58% | 62.23% | 44.35% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 8.70 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 25 | 29 | n.a |
| Total Asset Turnover | 3.72 | 4.05 | 2.63 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.34 | 0.19 | 0.12 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | ($4,798) | $63,196 | $147,480 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.27 | 0.25 | 0.38 | n.a |
| Current Debt/Total Assets | 25% | 16% | 11% | n.a |
| Acid Test | 0.60 | 4.51 | 8.46 | n.a |
| Sales/Net Worth | 4.99 | 4.83 | 2.94 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
By 
