Yoga Center Business Plan

Garden Way Yoga Center

Financial Plan

The following is the financial plan for Garden Way Yoga Center.

7.1 Break-even Analysis

The monthly break-even point is $14,492.

Yoga center business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$14,492

Assumptions:
Average Percent Variable Cost	9%
Estimated Monthly Fixed Cost	$13,140

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
	Year 1	Year 2	Year 3
Sales	$216,000	$275,000	$346,000
Direct Cost of Sales	$20,150	$26,000	$32,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$20,150	$26,000	$32,000

Gross Margin	$195,850	$249,000	$314,000
Gross Margin %	90.67%	90.55%	90.75%


Expenses
Payroll	$109,200	$123,000	$139,000
Sales and Marketing and Other Expenses	$24,000	$26,000	$28,000
Depreciation	$2,400	$2,400	$2,400
Utilities	$3,300	$3,300	$3,300
Insurance	$2,400	$2,400	$2,400
Payroll Taxes	$16,380	$18,450	$20,850
Other	$0	$0	$0

Total Operating Expenses	$157,680	$175,550	$195,950

Profit Before Interest and Taxes	$38,170	$73,450	$118,050
EBITDA	$40,570	$75,850	$120,450
Interest Expense	$7,721	$7,226	$6,710
Taxes Incurred	$9,135	$19,867	$33,402

Net Profit	$21,315	$46,357	$77,938
Net Profit/Sales	9.87%	16.86%	22.53%

7.3 Projected Cash Flow

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

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$216,000	$275,000	$346,000
Subtotal Cash from Operations	$216,000	$275,000	$346,000

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	$216,000	$275,000	$346,000

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$109,200	$123,000	$139,000
Bill Payments	$65,490	$105,836	$125,554
Subtotal Spent on Operations	$174,690	$228,836	$264,554

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	$5,160	$5,160	$5,160
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$179,850	$233,996	$269,714

Net Cash Flow	$36,150	$41,004	$76,286
Cash Balance	$103,050	$144,054	$220,340

7.4 Projected Balance Sheet

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

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$103,050	$144,054	$220,340
Inventory	$2,750	$3,548	$4,367
Other Current Assets	$0	$0	$0
Total Current Assets	$105,800	$147,603	$224,707

Long-term Assets
Long-term Assets	$30,000	$30,000	$30,000
Accumulated Depreciation	$2,400	$4,800	$7,200
Total Long-term Assets	$27,600	$25,200	$22,800
Total Assets	$133,400	$172,803	$247,507

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$10,345	$8,551	$10,478
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$10,345	$8,551	$10,478

Long-term Liabilities	$74,840	$69,680	$64,520
Total Liabilities	$85,185	$78,231	$74,998

Paid-in Capital	$60,000	$60,000	$60,000
Retained Earnings	($33,100)	($11,785)	$34,571
Earnings	$21,315	$46,357	$77,938
Total Capital	$48,215	$94,571	$172,509
Total Liabilities and Capital	$133,400	$172,803	$247,507

Net Worth	$48,215	$94,571	$172,509

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 7997, Membership Sport and Recreation Club, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	27.31%	25.82%	15.20%

Percent of Total Assets
Inventory	2.06%	2.05%	1.76%	4.00%
Other Current Assets	0.00%	0.00%	0.00%	31.80%
Total Current Assets	79.31%	85.42%	90.79%	40.90%
Long-term Assets	20.69%	14.58%	9.21%	59.10%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	7.76%	4.95%	4.23%	31.60%
Long-term Liabilities	56.10%	40.32%	26.07%	28.00%
Total Liabilities	63.86%	45.27%	30.30%	59.60%
Net Worth	36.14%	54.73%	69.70%	40.40%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	90.67%	90.55%	90.75%	0.00%
Selling, General & Administrative Expenses	80.80%	73.69%	68.23%	72.30%
Advertising Expenses	2.78%	2.91%	2.89%	2.70%
Profit Before Interest and Taxes	17.67%	26.71%	34.12%	2.60%

Main Ratios
Current	10.23	17.26	21.45	1.23
Quick	9.96	16.85	21.03	0.83
Total Debt to Total Assets	63.86%	45.27%	30.30%	59.60%
Pre-tax Return on Net Worth	63.15%	70.03%	64.54%	2.80%
Pre-tax Return on Assets	22.83%	38.32%	44.98%	6.90%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	9.87%	16.86%	22.53%	n.a
Return on Equity	44.21%	49.02%	45.18%	n.a

Activity Ratios
Inventory Turnover	3.95	8.26	8.09	n.a
Accounts Payable Turnover	7.33	12.17	12.17	n.a
Payment Days	27	33	27	n.a
Total Asset Turnover	1.62	1.59	1.40	n.a

Debt Ratios
Debt to Net Worth	1.77	0.83	0.43	n.a
Current Liab. to Liab.	0.12	0.11	0.14	n.a

Liquidity Ratios
Net Working Capital	$95,455	$139,051	$214,229	n.a
Interest Coverage	4.94	10.16	17.59	n.a

Additional Ratios
Assets to Sales	0.62	0.63	0.72	n.a
Current Debt/Total Assets	8%	5%	4%	n.a
Acid Test	9.96	16.85	21.03	n.a
Sales/Net Worth	4.48	2.91	2.01	n.a
Dividend Payout	0.00	0.00	0.00	n.a