Male Gear Wear
Financial Plan
The following sections will outline the key Financial Strategy for Male Gear Wear.
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 what is needed in monthly revenue to reach the break-even point.

Break-even Analysis | |
Monthly Revenue Break-even | $18,844 |
Assumptions: | |
Average Percent Variable Cost | 40% |
Estimated Monthly Fixed Cost | $11,307 |
7.3 Projected Profit and Loss
The following table and charts show the Projected Profit and Loss.




Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $133,893 | $322,005 | $470,831 |
Direct Cost of Sales | $53,557 | $128,802 | $188,332 |
Other Costs of Goods | $0 | $0 | $0 |
Total Cost of Sales | $53,557 | $128,802 | $188,332 |
Gross Margin | $80,336 | $193,203 | $282,498 |
Gross Margin % | 60.00% | 60.00% | 60.00% |
Expenses | |||
Payroll | $93,200 | $116,000 | $130,000 |
Sales and Marketing and Other Expenses | $6,000 | $6,000 | $6,000 |
Depreciation | $1,800 | $1,800 | $1,800 |
Rent | $10,800 | $11,000 | $11,000 |
Utilities | $3,600 | $3,600 | $3,600 |
Insurance | $3,900 | $4,500 | $4,500 |
Payroll Taxes | $13,980 | $17,400 | $19,500 |
Other | $2,400 | $2,400 | $2,400 |
Total Operating Expenses | $135,680 | $162,700 | $178,800 |
Profit Before Interest and Taxes | ($55,344) | $30,503 | $103,698 |
EBITDA | ($53,544) | $32,303 | $105,498 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $9,151 | $31,110 |
Net Profit | ($55,344) | $21,352 | $72,589 |
Net Profit/Sales | -41.33% | 6.63% | 15.42% |
7.4 Projected Cash Flow
The following table and chart presents the Projected Cash Flow.

Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $133,893 | $322,005 | $470,831 |
Subtotal Cash from Operations | $133,893 | $322,005 | $470,831 |
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 | $133,893 | $322,005 | $470,831 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $93,200 | $116,000 | $130,000 |
Bill Payments | $89,861 | $193,772 | $270,272 |
Subtotal Spent on Operations | $183,061 | $309,772 | $400,272 |
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 | $183,061 | $309,772 | $400,272 |
Net Cash Flow | ($49,168) | $12,233 | $70,559 |
Cash Balance | $38,932 | $51,165 | $121,724 |
7.5 Projected Balance Sheet
The following table shows the Projected Balance Sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $38,932 | $51,165 | $121,724 |
Inventory | $9,422 | $22,660 | $33,133 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $48,354 | $73,825 | $154,857 |
Long-term Assets | |||
Long-term Assets | $9,000 | $9,000 | $9,000 |
Accumulated Depreciation | $1,800 | $3,600 | $5,400 |
Total Long-term Assets | $7,200 | $5,400 | $3,600 |
Total Assets | $55,554 | $79,225 | $158,457 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $13,798 | $16,117 | $22,760 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $13,798 | $16,117 | $22,760 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $13,798 | $16,117 | $22,760 |
Paid-in Capital | $115,000 | $115,000 | $115,000 |
Retained Earnings | ($17,900) | ($73,244) | ($51,892) |
Earnings | ($55,344) | $21,352 | $72,589 |
Total Capital | $41,756 | $63,108 | $135,697 |
Total Liabilities and Capital | $55,554 | $79,225 | $158,457 |
Net Worth | $41,756 | $63,108 | $135,697 |
7.6 Business Ratios
The following table indicates key Business Ratios for this company as well as a relative comparison with known industry averages, based upon the NAICS industry code 448190, for Clothing Stores retailing lines of specialized clothes.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 140.49% | 46.22% | 5.27% |
Percent of Total Assets | ||||
Inventory | 16.96% | 28.60% | 20.91% | 38.34% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 26.48% |
Total Current Assets | 87.04% | 93.18% | 97.73% | 88.71% |
Long-term Assets | 12.96% | 6.82% | 2.27% | 11.29% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 24.84% | 20.34% | 14.36% | 37.92% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 12.86% |
Total Liabilities | 24.84% | 20.34% | 14.36% | 50.78% |
Net Worth | 75.16% | 79.66% | 85.64% | 49.22% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 60.00% | 60.00% | 60.00% | 14.97% |
Selling, General & Administrative Expenses | 101.33% | 49.59% | 41.34% | 6.56% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.14% |
Profit Before Interest and Taxes | -41.33% | 9.47% | 22.02% | 1.32% |
Main Ratios | ||||
Current | 3.50 | 4.58 | 6.80 | 2.10 |
Quick | 2.82 | 3.17 | 5.35 | 0.86 |
Total Debt to Total Assets | 24.84% | 20.34% | 14.36% | 57.27% |
Pre-tax Return on Net Worth | -132.54% | 48.33% | 76.42% | 4.00% |
Pre-tax Return on Assets | -99.62% | 38.50% | 65.44% | 9.36% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -41.33% | 6.63% | 15.42% | n.a |
Return on Equity | -132.54% | 33.83% | 53.49% | n.a |
Activity Ratios | ||||
Inventory Turnover | 10.91 | 8.03 | 6.75 | n.a |
Accounts Payable Turnover | 7.51 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 28 | 26 | n.a |
Total Asset Turnover | 2.41 | 4.06 | 2.97 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.33 | 0.26 | 0.17 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $34,556 | $57,708 | $132,097 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.41 | 0.25 | 0.34 | n.a |
Current Debt/Total Assets | 25% | 20% | 14% | n.a |
Acid Test | 2.82 | 3.17 | 5.35 | n.a |
Sales/Net Worth | 3.21 | 5.10 | 3.47 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |