The Creature Nannie
Financial Plan
The following sections will outline important financial information.
8.1 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 |
8.2 Break-even Analysis
The Break-even Analysis indicates that approximately $1,400 will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $1,259 |
| Assumptions: | |
| Average Percent Variable Cost | 2% |
| Estimated Monthly Fixed Cost | $1,233 |
8.3 Projected Profit and Loss
The following table will indicate projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $12,880 | $17,000 | $18,000 |
| Direct Cost of Sales | $258 | $340 | $360 |
| Other Production Expenses | $0 | $0 | $0 |
| Total Cost of Sales | $258 | $340 | $360 |
| Gross Margin | $12,622 | $16,660 | $17,640 |
| Gross Margin % | 98.00% | 98.00% | 98.00% |
| Expenses | |||
| Payroll | $12,000 | $12,000 | $12,000 |
| Sales and Marketing and Other Expenses | $1,000 | $600 | $600 |
| Depreciation | $0 | $0 | $0 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $600 | $600 | $600 |
| Insurance/ license/ bonding | $1,200 | $1,200 | $1,200 |
| Rent | $0 | $0 | $0 |
| Payroll Taxes | $0 | $0 | $0 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $14,800 | $14,400 | $14,400 |
| Profit Before Interest and Taxes | ($2,178) | $2,260 | $3,240 |
| EBITDA | ($2,178) | $2,260 | $3,240 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $678 | $972 |
| Net Profit | ($2,178) | $1,582 | $2,268 |
| Net Profit/Sales | -16.91% | 9.31% | 12.60% |
8.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $12,880 | $17,000 | $18,000 |
| Subtotal Cash from Operations | $12,880 | $17,000 | $18,000 |
| 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 | $12,880 | $17,000 | $18,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $12,000 | $12,000 | $12,000 |
| Bill Payments | $2,833 | $3,361 | $3,706 |
| Subtotal Spent on Operations | $14,833 | $15,361 | $15,706 |
| 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 | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $14,833 | $15,361 | $15,706 |
| Net Cash Flow | ($1,953) | $1,639 | $2,294 |
| Cash Balance | $2,247 | $3,885 | $6,179 |
8.5 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 | $2,247 | $3,885 | $6,179 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $2,247 | $3,885 | $6,179 |
| Long-term Assets | |||
| Long-term Assets | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $2,247 | $3,885 | $6,179 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $224 | $281 | $307 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $224 | $281 | $307 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $224 | $281 | $307 |
| Paid-in Capital | $5,000 | $5,000 | $5,000 |
| Retained Earnings | ($800) | ($2,978) | ($1,396) |
| Earnings | ($2,178) | $1,582 | $2,268 |
| Total Capital | $2,022 | $3,604 | $5,872 |
| Total Liabilities and Capital | $2,247 | $3,885 | $6,179 |
| Net Worth | $2,022 | $3,604 | $5,872 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 31.99% | 5.88% | -2.90% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 31.90% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 55.90% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 44.10% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 9.98% | 7.23% | 4.96% | 32.70% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 19.90% |
| Total Liabilities | 9.98% | 7.23% | 4.96% | 52.60% |
| Net Worth | 90.02% | 92.77% | 95.04% | 47.40% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 98.00% | 98.00% | 98.00% | 42.50% |
| Selling, General & Administrative Expenses | 119.19% | 90.97% | 87.55% | 26.40% |
| Advertising Expenses | 3.11% | 0.00% | 0.00% | 0.50% |
| Profit Before Interest and Taxes | -16.91% | 13.29% | 18.00% | 2.40% |
| Main Ratios | ||||
| Current | 10.02 | 13.83 | 20.14 | 2.19 |
| Quick | 10.02 | 13.83 | 20.14 | 1.48 |
| Total Debt to Total Assets | 9.98% | 7.23% | 4.96% | 52.60% |
| Pre-tax Return on Net Worth | -107.67% | 62.70% | 55.17% | 4.50% |
| Pre-tax Return on Assets | -96.93% | 58.17% | 52.43% | 9.40% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -16.91% | 9.31% | 12.60% | n.a |
| Return on Equity | -107.67% | 43.89% | 38.62% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 13.63 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 27 | 29 | n.a |
| Total Asset Turnover | 5.73 | 4.38 | 2.91 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.11 | 0.08 | 0.05 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $2,022 | $3,604 | $5,872 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.17 | 0.23 | 0.34 | n.a |
| Current Debt/Total Assets | 10% | 7% | 5% | n.a |
| Acid Test | 10.02 | 13.83 | 20.14 | n.a |
| Sales/Net Worth | 6.37 | 4.72 | 3.07 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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