Interstate Travel Center
Financial Plan
The following topics outline the financials for Interstate Travel Center.
7.1 Important Assumptions
The chart indicating the projected cash account does not take into account the investment needed to initiate Phases II-IV. The General Assumptions table states some of the more important business assumptions for the company.
| 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 | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
7.2 Projected Cash Flow
The following table and chart reveal the projected cash flow for Interstate Travel Center for fiscal years 2001, 2002, and 2003.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $8,203,203 | $8,604,910 | $9,027,661 |
| Subtotal Cash from Operations | $8,203,203 | $8,604,910 | $9,027,661 |
| 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 | $8,203,203 | $8,604,910 | $9,027,661 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $481,672 | $481,672 | $481,672 |
| Bill Payments | $6,956,862 | $7,367,638 | $7,785,173 |
| Subtotal Spent on Operations | $7,438,534 | $7,849,310 | $8,266,845 |
| 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 | $275,000 | $275,000 | $275,000 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $7,713,534 | $8,124,310 | $8,541,845 |
| Net Cash Flow | $489,669 | $480,600 | $485,816 |
| Cash Balance | $739,669 | $1,220,269 | $1,706,085 |
7.3 Break-even Analysis
The break-even chart and table below describe how much money will need to be made to be profitable each month.
| Break-even Analysis | |
| Monthly Units Break-even | 165,099 |
| Monthly Revenue Break-even | $325,729 |
| Assumptions: | |
| Average Per-Unit Revenue | $1.97 |
| Average Per-Unit Variable Cost | $1.46 |
| Estimated Monthly Fixed Cost | $84,960 |
7.4 Projected Profit and Loss
The chart and table below projects the yearly profit and loss for the company. For a monthly breakdown, please see the appendix following the plan.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $8,203,203 | $8,604,910 | $9,027,661 |
| Direct Cost of Sales | $6,063,555 | $6,366,533 | $6,684,784 |
| Other | $0 | $0 | $0 |
| Total Cost of Sales | $6,063,555 | $6,366,533 | $6,684,784 |
| Gross Margin | $2,139,648 | $2,238,377 | $2,342,878 |
| Gross Margin % | 26.08% | 26.01% | 25.95% |
| Expenses | |||
| Payroll | $481,672 | $481,672 | $481,672 |
| Sales and Marketing and Other Expenses | $220,800 | $278,800 | $378,800 |
| Depreciation | $30,000 | $30,000 | $30,000 |
| Leased Equipment | $49,800 | $49,800 | $49,800 |
| Utilities | $49,200 | $49,200 | $49,200 |
| Insurance | $91,800 | $91,800 | $91,800 |
| Rent | $24,000 | $30,000 | $34,000 |
| Payroll Taxes | $72,251 | $72,251 | $72,251 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $1,019,523 | $1,083,523 | $1,187,523 |
| Profit Before Interest and Taxes | $1,120,125 | $1,154,854 | $1,155,355 |
| EBITDA | $1,150,125 | $1,184,854 | $1,185,355 |
| Interest Expense | $235,104 | $208,750 | $181,250 |
| Taxes Incurred | $224,890 | $236,526 | $247,585 |
| Net Profit | $660,131 | $709,578 | $726,520 |
| Net Profit/Sales | 8.05% | 8.25% | 8.05% |
7.5 Projected Balance Sheet
The following table shows our projected Balance Sheet for the next three years. We anticipate a steadily increasing Net Worth.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $739,669 | $1,220,269 | $1,706,085 |
| Inventory | $555,826 | $583,599 | $612,772 |
| Other Current Assets | $50,000 | $50,000 | $50,000 |
| Total Current Assets | $1,345,495 | $1,853,868 | $2,368,857 |
| Long-term Assets | |||
| Long-term Assets | $1,600,000 | $1,600,000 | $1,600,000 |
| Accumulated Depreciation | $30,000 | $60,000 | $90,000 |
| Total Long-term Assets | $1,570,000 | $1,540,000 | $1,510,000 |
| Total Assets | $2,915,495 | $3,393,868 | $3,878,857 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $565,364 | $609,159 | $642,628 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $565,364 | $609,159 | $642,628 |
| Long-term Liabilities | $2,225,000 | $1,950,000 | $1,675,000 |
| Total Liabilities | $2,790,364 | $2,559,159 | $2,317,628 |
| Paid-in Capital | $250,000 | $250,000 | $250,000 |
| Retained Earnings | ($785,000) | ($124,869) | $584,709 |
| Earnings | $660,131 | $709,578 | $726,520 |
| Total Capital | $125,131 | $834,709 | $1,561,229 |
| Total Liabilities and Capital | $2,915,495 | $3,393,868 | $3,878,857 |
| Net Worth | $125,131 | $834,709 | $1,561,229 |
7.6 Business Ratios
The table below outlines industry profile statistics for the gas and service station industry, as determined by the Standard Industry Classification (SIC) Index code 5541, Gasoline Service Stations. These statistics show a comparison of the industry standards and key ratios for this plan.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 4.90% | 4.91% | 10.80% |
| Percent of Total Assets | ||||
| Inventory | 19.06% | 17.20% | 15.80% | 13.30% |
| Other Current Assets | 1.71% | 1.47% | 1.29% | 25.60% |
| Total Current Assets | 46.15% | 54.62% | 61.07% | 49.50% |
| Long-term Assets | 53.85% | 45.38% | 38.93% | 50.50% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 19.39% | 17.95% | 16.57% | 31.60% |
| Long-term Liabilities | 76.32% | 57.46% | 43.18% | 23.10% |
| Total Liabilities | 95.71% | 75.41% | 59.75% | 54.70% |
| Net Worth | 4.29% | 24.59% | 40.25% | 45.30% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 26.08% | 26.01% | 25.95% | 16.50% |
| Selling, General & Administrative Expenses | 17.99% | 17.77% | 17.86% | 10.40% |
| Advertising Expenses | 2.34% | 2.32% | 2.77% | 0.20% |
| Profit Before Interest and Taxes | 13.65% | 13.42% | 12.80% | 0.50% |
| Main Ratios | ||||
| Current | 2.38 | 3.04 | 3.69 | 1.55 |
| Quick | 1.40 | 2.09 | 2.73 | 0.91 |
| Total Debt to Total Assets | 95.71% | 75.41% | 59.75% | 54.70% |
| Pre-tax Return on Net Worth | 707.28% | 113.35% | 62.39% | 2.50% |
| Pre-tax Return on Assets | 30.36% | 27.88% | 25.11% | 5.50% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 8.05% | 8.25% | 8.05% | n.a |
| Return on Equity | 527.55% | 85.01% | 46.54% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 10.91 | 11.17 | 11.18 | n.a |
| Accounts Payable Turnover | 13.31 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 29 | 29 | n.a |
| Total Asset Turnover | 2.81 | 2.54 | 2.33 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 22.30 | 3.07 | 1.48 | n.a |
| Current Liab. to Liab. | 0.20 | 0.24 | 0.28 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $780,131 | $1,244,709 | $1,726,229 | n.a |
| Interest Coverage | 4.76 | 5.53 | 6.37 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.36 | 0.39 | 0.43 | n.a |
| Current Debt/Total Assets | 19% | 18% | 17% | n.a |
| Acid Test | 1.40 | 2.09 | 2.73 | n.a |
| Sales/Net Worth | 65.56 | 10.31 | 5.78 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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