Greens Manicure Service
Financial Plan
The following sections will outline important financial information.
7.1 Important Assumptions
The following table highlights some important financial assumptions of Greens.
| 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 Break-even Analysis
The Break-even Analysis indicates approximately $3,900 is needed in monthly revenue to break even.
| Break-even Analysis | |
| Monthly Revenue Break-even | $3,956 |
| Assumptions: | |
| Average Percent Variable Cost | 7% |
| Estimated Monthly Fixed Cost | $3,679 |
7.3 Projected Profit and Loss
The following table indicates the projected profit and loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $41,748 | $91,254 | $97,854 |
| Direct Cost of Sales | $2,922 | $6,388 | $6,850 |
| Other | $0 | $0 | $0 |
| Total Cost of Sales | $2,922 | $6,388 | $6,850 |
| Gross Margin | $38,826 | $84,866 | $91,004 |
| Gross Margin % | 93.00% | 93.00% | 93.00% |
| Expenses | |||
| Payroll | $35,300 | $60,900 | $60,900 |
| Sales and Marketing and Other Expenses | $0 | $0 | $0 |
| Depreciation | $1,152 | $2,552 | $2,552 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $0 | $0 | $0 |
| Insurance | $1,200 | $1,200 | $1,200 |
| Licenses + bonded fees | $1,200 | $1,200 | $1,200 |
| Payroll Taxes | $5,295 | $9,135 | $9,135 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $44,147 | $74,987 | $74,987 |
| Profit Before Interest and Taxes | ($5,321) | $9,879 | $16,017 |
| EBITDA | ($4,169) | $12,431 | $18,569 |
| Interest Expense | $1,847 | $1,675 | $1,495 |
| Taxes Incurred | $0 | $2,051 | $3,691 |
| Net Profit | ($7,169) | $6,153 | $10,831 |
| Net Profit/Sales | -17.17% | 6.74% | 11.07% |
7.4 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 | $31,311 | $68,441 | $73,391 |
| Cash from Receivables | $10,437 | $22,814 | $24,464 |
| Subtotal Cash from Operations | $41,748 | $91,254 | $97,854 |
| 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 | $41,748 | $91,254 | $97,854 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $35,300 | $60,900 | $60,900 |
| Bill Payments | $12,129 | $20,205 | $23,413 |
| Subtotal Spent on Operations | $47,429 | $81,105 | $84,313 |
| 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 | $1,800 | $1,800 | $1,800 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $7,000 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $49,229 | $89,905 | $86,113 |
| Net Cash Flow | ($7,481) | $1,349 | $11,741 |
| Cash Balance | $6,919 | $8,268 | $20,009 |
7.5 Projected Balance Sheet
The following table indicates the projected balance sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $6,919 | $8,268 | $20,009 |
| Accounts Receivable | $0 | $0 | $0 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $6,919 | $8,268 | $20,009 |
| Long-term Assets | |||
| Long-term Assets | $4,750 | $11,750 | $11,750 |
| Accumulated Depreciation | $1,152 | $3,704 | $6,256 |
| Total Long-term Assets | $3,598 | $8,046 | $5,494 |
| Total Assets | $10,517 | $16,314 | $25,503 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $336 | $1,779 | $1,937 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $336 | $1,779 | $1,937 |
| Long-term Liabilities | $17,650 | $15,850 | $14,050 |
| Total Liabilities | $17,986 | $17,629 | $15,987 |
| Paid-in Capital | $0 | $0 | $0 |
| Retained Earnings | ($300) | ($7,469) | ($1,316) |
| Earnings | ($7,169) | $6,153 | $10,831 |
| Total Capital | ($7,469) | ($1,316) | $9,515 |
| Total Liabilities and Capital | $10,517 | $16,314 | $25,503 |
| Net Worth | ($7,469) | ($1,316) | $9,515 |
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