Wholesale Food Business Plan

Justin Seafood Market

Financial Plan

The following is the financial plan for expansion of Justin Seafood Market to include a new retail market space.

7.1 Break-even Analysis

The following table and chart show our Break-even Analysis for the coming year.

Wholesale food business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$95,418

Assumptions:
Average Percent Variable Cost	50%
Estimated Monthly Fixed Cost	$47,579

7.2 Projected Profit and Loss

The following table and charts highlight the projected profit and loss for three years.

Pro Forma Profit and Loss
	2002	2003	2004
Sales	$1,176,000	$1,290,000	$1,435,000
Direct Cost of Sales	$589,600	$656,000	$728,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$589,600	$656,000	$728,000

Gross Margin	$586,400	$634,000	$707,000
Gross Margin %	49.86%	49.15%	49.27%


Expenses
Payroll	$345,350	$407,000	$433,000
Sales and Marketing and Other Expenses	$24,000	$30,000	$40,000
Depreciation	$9,600	$9,600	$9,600
Renovation Expenses	$150,000	$0	$0
Utilities	$6,000	$6,000	$6,000
Insurance	$0	$0	$0
Rent	$36,000	$36,000	$36,000
Payroll Taxes	$0	$0	$0
Other	$0	$0	$0

Total Operating Expenses	$570,950	$488,600	$524,600

Profit Before Interest and Taxes	$15,450	$145,400	$182,400
EBITDA	$25,050	$155,000	$192,000
Interest Expense	$10,675	$8,331	$5,885
Taxes Incurred	$1,432	$41,121	$52,955

Net Profit	$3,342	$95,948	$123,561
Net Profit/Sales	0.28%	7.44%	8.61%

7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Pro Forma Cash Flow
	2002	2003	2004
Cash Received

Cash from Operations
Cash Sales	$705,600	$774,000	$861,000
Cash from Receivables	$397,286	$506,616	$562,065
Subtotal Cash from Operations	$1,102,886	$1,280,616	$1,423,065

Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$100,000	$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	$50,000	$0	$0
Subtotal Cash Received	$1,252,886	$1,280,616	$1,423,065

Expenditures	2002	2003	2004

Expenditures from Operations
Cash Spending	$345,350	$407,000	$433,000
Bill Payments	$800,535	$797,744	$869,803
Subtotal Spent on Operations	$1,145,885	$1,204,744	$1,302,803

Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$21,600	$21,600	$21,600
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$2,860	$2,860	$2,860
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$1,170,345	$1,229,204	$1,327,263

Net Cash Flow	$82,541	$51,412	$95,801
Cash Balance	$132,541	$183,953	$279,754

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
	2002	2003	2004
Assets

Current Assets
Cash	$132,541	$183,953	$279,754
Accounts Receivable	$96,800	$106,184	$118,119
Inventory	$69,850	$77,716	$86,246
Other Current Assets	$50,000	$50,000	$50,000
Total Current Assets	$349,191	$417,853	$534,120

Long-term Assets
Long-term Assets	$80,000	$80,000	$80,000
Accumulated Depreciation	$24,600	$34,200	$43,800
Total Long-term Assets	$55,400	$45,800	$36,200
Total Assets	$404,591	$463,653	$570,320

Liabilities and Capital	2002	2003	2004

Current Liabilities
Accounts Payable	$76,973	$64,547	$72,113
Current Borrowing	$78,400	$56,800	$35,200
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$155,373	$121,347	$107,313

Long-term Liabilities	$17,140	$14,280	$11,420
Total Liabilities	$172,513	$135,627	$118,733

Paid-in Capital	$50,000	$50,000	$50,000
Retained Earnings	$178,736	$182,078	$278,027
Earnings	$3,342	$95,948	$123,561
Total Capital	$232,078	$328,027	$451,587
Total Liabilities and Capital	$404,591	$463,653	$570,320

Net Worth	$232,078	$328,027	$451,587

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5146, Fish and Seafood, are shown for comparison.

Ratio Analysis
	2002	2003	2004	Industry Profile
Sales Growth	65.49%	9.69%	11.24%	4.60%

Percent of Total Assets
Accounts Receivable	23.93%	22.90%	20.71%	33.30%
Inventory	17.26%	16.76%	15.12%	25.40%
Other Current Assets	12.36%	10.78%	8.77%	24.00%
Total Current Assets	86.31%	90.12%	93.65%	82.70%
Long-term Assets	13.69%	9.88%	6.35%	17.30%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	38.40%	26.17%	18.82%	47.70%
Long-term Liabilities	4.24%	3.08%	2.00%	10.10%
Total Liabilities	42.64%	29.25%	20.82%	57.80%
Net Worth	57.36%	70.75%	79.18%	42.20%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	49.86%	49.15%	49.27%	14.20%
Selling, General & Administrative Expenses	46.23%	45.05%	43.86%	9.00%
Advertising Expenses	1.02%	1.16%	1.39%	0.30%
Profit Before Interest and Taxes	1.31%	11.27%	12.71%	0.80%

Main Ratios
Current	2.25	3.44	4.98	1.64
Quick	1.80	2.80	4.17	0.97
Total Debt to Total Assets	42.64%	29.25%	20.82%	57.80%
Pre-tax Return on Net Worth	2.06%	41.79%	39.09%	3.60%
Pre-tax Return on Assets	1.18%	29.56%	30.95%	8.40%

Additional Ratios	2002	2003	2004
Net Profit Margin	0.28%	7.44%	8.61%	n.a
Return on Equity	1.44%	29.25%	27.36%	n.a

Activity Ratios
Accounts Receivable Turnover	4.86	4.86	4.86	n.a
Collection Days	57	72	71	n.a
Inventory Turnover	10.91	8.89	8.88	n.a
Accounts Payable Turnover	11.14	12.17	12.17	n.a
Payment Days	28	33	28	n.a
Total Asset Turnover	2.91	2.78	2.52	n.a

Debt Ratios
Debt to Net Worth	0.74	0.41	0.26	n.a
Current Liab. to Liab.	0.90	0.89	0.90	n.a

Liquidity Ratios
Net Working Capital	$193,818	$296,507	$426,807	n.a
Interest Coverage	1.45	17.45	30.99	n.a

Additional Ratios
Assets to Sales	0.34	0.36	0.40	n.a
Current Debt/Total Assets	38%	26%	19%	n.a
Acid Test	1.17	1.93	3.07	n.a
Sales/Net Worth	5.07	3.93	3.18	n.a
Dividend Payout	0.00	0.00	0.00	n.a