Borrow My Tools
Financial Plan
The following sections will outline important financial information.
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 |
Break-even Analysis
The Break-even Analysis table and chart indicate what is needed in monthly revenue to reach the break even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $11,869 |
| Assumptions: | |
| Average Percent Variable Cost | 15% |
| Estimated Monthly Fixed Cost | $10,098 |
Projected Profit and Loss
The following table and charts will indicate projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $69,827 | $213,240 | $248,272 |
| Direct Cost of Sales | $10,416 | $31,808 | $37,033 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $10,416 | $31,808 | $37,033 |
| Gross Margin | $59,411 | $181,433 | $211,239 |
| Gross Margin % | 85.08% | 85.08% | 85.08% |
| Expenses | |||
| Payroll | $85,200 | $117,600 | $123,600 |
| Sales and Marketing and Other Expenses | $0 | $0 | $0 |
| Depreciation | $12,000 | $12,000 | $16,000 |
| Rent | $7,500 | $9,000 | $9,000 |
| Utilities | $2,200 | $2,640 | $2,640 |
| Insurance | $1,500 | $1,800 | $1,800 |
| Payroll Taxes | $12,780 | $17,640 | $18,540 |
| Total Operating Expenses | $121,180 | $160,680 | $171,580 |
| Profit Before Interest and Taxes | ($61,769) | $20,753 | $39,659 |
| EBITDA | ($49,769) | $32,753 | $55,659 |
| Interest Expense | $6,394 | $5,317 | $4,219 |
| Taxes Incurred | $0 | $4,631 | $10,632 |
| Net Profit | ($68,163) | $10,805 | $24,808 |
| Net Profit/Sales | -97.62% | 5.07% | 9.99% |
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 | $69,827 | $213,240 | $248,272 |
| Subtotal Cash from Operations | $69,827 | $213,240 | $248,272 |
| 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 | $69,827 | $213,240 | $248,272 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $85,200 | $117,600 | $123,600 |
| Bill Payments | $38,101 | $79,195 | $78,378 |
| Subtotal Spent on Operations | $123,301 | $196,795 | $201,978 |
| 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 | $11,359 | $10,938 | $11,029 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $20,000 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $134,660 | $207,733 | $233,007 |
| Net Cash Flow | ($64,833) | $5,507 | $15,265 |
| Cash Balance | $1,767 | $7,274 | $22,539 |
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 | $1,767 | $7,274 | $22,539 |
| Inventory | $1,683 | $10,372 | $4,604 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $3,450 | $17,646 | $27,143 |
| Long-term Assets | |||
| Long-term Assets | $60,000 | $60,000 | $80,000 |
| Accumulated Depreciation | $12,000 | $24,000 | $40,000 |
| Total Long-term Assets | $48,000 | $36,000 | $40,000 |
| Total Assets | $51,450 | $53,646 | $67,143 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $4,372 | $6,701 | $6,419 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $4,372 | $6,701 | $6,419 |
| Long-term Liabilities | $58,641 | $47,703 | $36,674 |
| Total Liabilities | $63,013 | $54,404 | $43,093 |
| Paid-in Capital | $65,000 | $65,000 | $65,000 |
| Retained Earnings | ($8,400) | ($76,563) | ($65,758) |
| Earnings | ($68,163) | $10,805 | $24,808 |
| Total Capital | ($11,563) | ($758) | $24,050 |
| Total Liabilities and Capital | $51,450 | $53,646 | $67,143 |
| Net Worth | ($11,563) | ($758) | $24,050 |
Business Ratios
The following table represents ratios specific to Borrow My Tools as well as industry average ratios.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | n.a. | 205.39% | 16.43% | 7.07% |
| Percent of Total Assets | ||||
| Inventory | 3.27% | 19.33% | 6.86% | 3.96% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 44.65% |
| Total Current Assets | 6.70% | 32.89% | 40.43% | 76.22% |
| Long-term Assets | 93.30% | 67.11% | 59.57% | 23.78% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 8.50% | 12.49% | 9.56% | 33.47% |
| Long-term Liabilities | 113.98% | 88.92% | 54.62% | 16.23% |
| Total Liabilities | 122.47% | 101.41% | 64.18% | 49.70% |
| Net Worth | -22.47% | -1.41% | 35.82% | 50.30% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 85.08% | 85.08% | 85.08% | 100.00% |
| Selling, General & Administrative Expenses | 182.70% | 80.02% | 75.09% | 84.88% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.01% |
| Profit Before Interest and Taxes | -88.46% | 9.73% | 15.97% | 1.94% |
| Main Ratios | ||||
| Current | 0.79 | 2.63 | 4.23 | 1.73 |
| Quick | 0.40 | 1.09 | 3.51 | 1.33 |
| Total Debt to Total Assets | 122.47% | 101.41% | 64.18% | 3.77% |
| Pre-tax Return on Net Worth | 589.49% | -2035.50% | 147.36% | 57.72% |
| Pre-tax Return on Assets | -132.49% | 28.77% | 52.78% | 8.92% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -97.62% | 5.07% | 9.99% | n.a |
| Return on Equity | 0.00% | 0.00% | 103.15% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 9.37 | 5.28 | 4.95 | n.a |
| Accounts Payable Turnover | 9.72 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 25 | 31 | n.a |
| Total Asset Turnover | 1.36 | 3.97 | 3.70 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.00 | 0.00 | 1.79 | n.a |
| Current Liab. to Liab. | 0.07 | 0.12 | 0.15 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | ($922) | $10,945 | $20,724 | n.a |
| Interest Coverage | -9.66 | 3.90 | 9.40 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.74 | 0.25 | 0.27 | n.a |
| Current Debt/Total Assets | 8% | 12% | 10% | n.a |
| Acid Test | 0.40 | 1.09 | 3.51 | n.a |
| Sales/Net Worth | 0.00 | 0.00 | 10.32 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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