Artemide Auditing & Consulting AG
Financial Plan
The following sections include the annual estimates for the standard set of financial tables. Detailed monthly pro-forma tables are included in the appendix.
7.1 Important Assumptions
This information is presented in the table below.
| General Assumptions | |||
| 2003 | 2004 | 2005 | |
| 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 | 25.00% | 25.00% | 25.00% |
| Other | 0 | 0 | 0 |
7.2 Key Financial Indicators
The Benchmark chart below uses index values to compare past and future financial indicators. The bars show relative change, not absolute values.
7.3 Break-even Analysis
With our average monthly fixed costs, Artemide will surpass break even consistently throughout the next year of operations.
| Break-even Analysis | |
| Monthly Revenue Break-even | $9,744 |
| Assumptions: | |
| Average Percent Variable Cost | 16% |
| Estimated Monthly Fixed Cost | $8,185 |
7.4 Projected Profit and Loss
The projected profit and loss information is presented in the table and charts below.
| Pro Forma Profit and Loss | |||
| 2003 | 2004 | 2005 | |
| Sales | $160,977 | $193,172 | $231,807 |
| Direct Cost of Sales | $25,758 | $29,622 | $34,065 |
| Other | $0 | $0 | $0 |
| Total Cost of Sales | $25,758 | $29,622 | $34,065 |
| Gross Margin | $135,219 | $163,551 | $197,742 |
| Gross Margin % | 84.00% | 84.67% | 85.30% |
| Expenses | |||
| Payroll | $72,000 | $77,000 | $86,000 |
| Sales and Marketing and Other Expenses | $6,897 | $9,500 | $13,000 |
| Depreciation | $2,400 | $2,500 | $2,500 |
| Leased Equipment (incl. office rental) | $2,400 | $2,500 | $3,000 |
| Utilities (incl. office furniture, etc.) | $1,800 | $2,000 | $2,500 |
| Insurance | $1,200 | $1,500 | $2,000 |
| Rent | $0 | $0 | $0 |
| Payroll Taxes | $11,520 | $12,320 | $13,760 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $98,217 | $107,320 | $122,760 |
| Profit Before Interest and Taxes | $37,003 | $56,231 | $74,982 |
| EBITDA | $39,403 | $58,731 | $77,482 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $9,251 | $14,058 | $18,745 |
| Net Profit | $27,752 | $42,173 | $56,236 |
| Net Profit/Sales | 17.24% | 21.83% | 24.26% |
7.5 Projected Cash Flow
The projected cash flow and cash balance information is presented in the chart and table below.
| Pro Forma Cash Flow | |||
| 2003 | 2004 | 2005 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $0 | $0 | $0 |
| Cash from Receivables | $149,782 | $188,617 | $226,341 |
| Subtotal Cash from Operations | $149,782 | $188,617 | $226,341 |
| 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 | $149,782 | $188,617 | $226,341 |
| Expenditures | 2003 | 2004 | 2005 |
| Expenditures from Operations | |||
| Cash Spending | $72,000 | $77,000 | $86,000 |
| Bill Payments | $66,312 | $69,717 | $85,791 |
| Subtotal Spent on Operations | $138,312 | $146,717 | $171,791 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $2,895 | $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 | $24,000 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $165,207 | $146,717 | $171,791 |
| Net Cash Flow | ($15,425) | $41,901 | $54,550 |
| Cash Balance | $77,226 | $119,126 | $173,676 |
7.6 Projected Balance Sheet
The projected balance sheet information is presented in the table below.
| Pro Forma Balance Sheet | |||
| 2003 | 2004 | 2005 | |
| Assets | |||
| Current Assets | |||
| Cash | $77,226 | $119,126 | $173,676 |
| Accounts Receivable | $22,776 | $27,331 | $32,797 |
| Other Current Assets | $1,158 | $1,158 | $1,158 |
| Total Current Assets | $101,160 | $147,616 | $207,632 |
| Long-term Assets | |||
| Long-term Assets | $30,948 | $30,948 | $30,948 |
| Accumulated Depreciation | $2,400 | $4,900 | $7,400 |
| Total Long-term Assets | $28,548 | $26,048 | $23,548 |
| Total Assets | $129,708 | $173,664 | $231,180 |
| Liabilities and Capital | 2003 | 2004 | 2005 |
| Current Liabilities | |||
| Accounts Payable | $4,094 | $5,877 | $7,156 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $4,094 | $5,877 | $7,156 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $4,094 | $5,877 | $7,156 |
| Paid-in Capital | $5,000 | $5,000 | $5,000 |
| Retained Earnings | $92,862 | $120,614 | $162,787 |
| Earnings | $27,752 | $42,173 | $56,236 |
| Total Capital | $125,614 | $167,787 | $224,023 |
| Total Liabilities and Capital | $129,708 | $173,664 | $231,180 |
| Net Worth | $125,614 | $167,787 | $224,023 |
7.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8721.01 – Auditing services, are shown for comparison.
| Ratio Analysis | ||||
| 2003 | 2004 | 2005 | Industry Profile | |
| Sales Growth | -0.72% | 20.00% | 20.00% | 8.60% |
| Percent of Total Assets | ||||
| Accounts Receivable | 17.56% | 15.74% | 14.19% | 24.40% |
| Other Current Assets | 0.89% | 0.67% | 0.50% | 46.70% |
| Total Current Assets | 77.99% | 85.00% | 89.81% | 74.90% |
| Long-term Assets | 22.01% | 15.00% | 10.19% | 25.10% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 3.16% | 3.38% | 3.10% | 42.80% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 17.20% |
| Total Liabilities | 3.16% | 3.38% | 3.10% | 60.00% |
| Net Worth | 96.84% | 96.62% | 96.90% | 40.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 84.00% | 84.67% | 85.30% | 0.00% |
| Selling, General & Administrative Expenses | 66.89% | 62.95% | 61.14% | 83.50% |
| Advertising Expenses | 2.05% | 2.07% | 2.59% | 1.20% |
| Profit Before Interest and Taxes | 22.99% | 29.11% | 32.35% | 2.60% |
| Main Ratios | ||||
| Current | 24.71 | 25.12 | 29.01 | 1.59 |
| Quick | 24.71 | 25.12 | 29.01 | 1.26 |
| Total Debt to Total Assets | 3.16% | 3.38% | 3.10% | 60.00% |
| Pre-tax Return on Net Worth | 29.46% | 33.51% | 33.47% | 4.40% |
| Pre-tax Return on Assets | 28.53% | 32.38% | 32.43% | 10.90% |
| Additional Ratios | 2003 | 2004 | 2005 | |
| Net Profit Margin | 17.24% | 21.83% | 24.26% | n.a |
| Return on Equity | 22.09% | 25.13% | 25.10% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.07 | 7.07 | 7.07 | n.a |
| Collection Days | 59 | 47 | 47 | n.a |
| Accounts Payable Turnover | 14.37 | 12.17 | 12.17 | n.a |
| Payment Days | 33 | 25 | 27 | n.a |
| Total Asset Turnover | 1.24 | 1.11 | 1.00 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.03 | 0.04 | 0.03 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $97,066 | $141,739 | $200,475 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.81 | 0.90 | 1.00 | n.a |
| Current Debt/Total Assets | 3% | 3% | 3% | n.a |
| Acid Test | 19.15 | 20.47 | 24.43 | n.a |
| Sales/Net Worth | 1.28 | 1.15 | 1.03 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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