HandyMan Stan
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 Projected Profit and Loss
The following table and charts will indicate Projected Profit and Loss.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $17,410 | $53,500 | $70,834 |
| Direct Cost of Sales | $1,707 | $5,106 | $6,761 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $1,707 | $5,106 | $6,761 |
| Gross Margin | $15,703 | $48,394 | $64,073 |
| Gross Margin % | 90.20% | 90.46% | 90.46% |
| Expenses | |||
| Payroll | $20,000 | $24,000 | $30,000 |
| Sales and Marketing and Other Expenses | $1,800 | $1,800 | $1,800 |
| Depreciation | $1,596 | $1,596 | $1,596 |
| License fees (electrical & plumbing) | $360 | $360 | $360 |
| Insurance | $2,400 | $2,400 | $2,400 |
| Payroll Taxes | $3,000 | $3,600 | $4,500 |
| Gas/other incidentals | $1,800 | $1,800 | $1,800 |
| Total Operating Expenses | $30,956 | $35,556 | $42,456 |
| Profit Before Interest and Taxes | ($15,253) | $12,838 | $21,617 |
| EBITDA | ($13,657) | $14,434 | $23,213 |
| Interest Expense | $2,740 | $2,279 | $1,808 |
| Taxes Incurred | $0 | $3,168 | $5,943 |
| Net Profit | ($17,994) | $7,391 | $13,866 |
| Net Profit/Sales | -103.36% | 13.82% | 19.58% |
8.3 Break-even Analysis
The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-even point.
| Break-even Analysis | |
| Monthly Revenue Break-even | $2,860 |
| Assumptions: | |
| Average Percent Variable Cost | 10% |
| Estimated Monthly Fixed Cost | $2,580 |
8.4 Projected Cash Flow
The following table and chart will indicate Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $17,410 | $53,500 | $70,834 |
| Subtotal Cash from Operations | $17,410 | $53,500 | $70,834 |
| 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 | $17,410 | $53,500 | $70,834 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $20,000 | $24,000 | $30,000 |
| Bill Payments | $12,484 | $20,150 | $24,972 |
| Subtotal Spent on Operations | $32,484 | $44,150 | $54,972 |
| 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 | $4,868 | $4,688 | $4,727 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $37,352 | $48,838 | $59,699 |
| Net Cash Flow | ($19,943) | $4,662 | $11,135 |
| Cash Balance | $557 | $5,220 | $16,354 |
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 | $557 | $5,220 | $16,354 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $557 | $5,220 | $16,354 |
| Long-term Assets | |||
| Long-term Assets | $8,000 | $8,000 | $8,000 |
| Accumulated Depreciation | $1,596 | $3,192 | $4,788 |
| Total Long-term Assets | $6,404 | $4,808 | $3,212 |
| Total Assets | $6,961 | $10,028 | $19,566 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $1,323 | $1,686 | $2,085 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $1,323 | $1,686 | $2,085 |
| Long-term Liabilities | $25,132 | $20,444 | $15,717 |
| Total Liabilities | $26,455 | $22,130 | $17,802 |
| Paid-in Capital | $0 | $0 | $0 |
| Retained Earnings | ($1,500) | ($19,494) | ($12,102) |
| Earnings | ($17,994) | $7,391 | $13,866 |
| Total Capital | ($19,494) | ($12,102) | $1,764 |
| Total Liabilities and Capital | $6,961 | $10,028 | $19,566 |
| Net Worth | ($19,494) | ($12,102) | $1,764 |
8.6 Business Ratios
The following table indicates Business Ratios specific to HandyMan Stan as well as industry ratios for the Personal and Household Goods Repair and Maintenance industry, NAICS code 811490.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 207.30% | 32.40% | 9.27% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 27.35% |
| Total Current Assets | 8.00% | 52.05% | 83.58% | 66.95% |
| Long-term Assets | 92.00% | 47.95% | 16.42% | 33.05% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 19.00% | 16.81% | 10.66% | 22.05% |
| Long-term Liabilities | 361.03% | 203.88% | 80.33% | 8.56% |
| Total Liabilities | 380.03% | 220.69% | 90.98% | 30.61% |
| Net Worth | -280.03% | -120.69% | 9.02% | 69.39% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 90.20% | 90.46% | 90.46% | 18.28% |
| Selling, General & Administrative Expenses | 193.55% | 76.64% | 70.88% | 5.96% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.65% |
| Profit Before Interest and Taxes | -87.62% | 24.00% | 30.52% | 67.63% |
| Main Ratios | ||||
| Current | 0.42 | 3.10 | 7.84 | 2.41 |
| Quick | 0.42 | 3.10 | 7.84 | 1.20 |
| Total Debt to Total Assets | 380.03% | 220.69% | 90.98% | 34.25% |
| Pre-tax Return on Net Worth | 92.31% | -87.25% | 1122.93% | 244.58% |
| Pre-tax Return on Assets | -258.49% | 105.30% | 101.24% | 371.96% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -103.36% | 13.82% | 19.58% | n.a |
| Return on Equity | 0.00% | 0.00% | 786.05% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 10.44 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 27 | 27 | n.a |
| Total Asset Turnover | 2.50 | 5.34 | 3.62 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.00 | 0.00 | 10.09 | n.a |
| Current Liab. to Liab. | 0.05 | 0.08 | 0.12 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | ($766) | $3,534 | $14,269 | n.a |
| Interest Coverage | -5.57 | 5.63 | 11.96 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.40 | 0.19 | 0.28 | n.a |
| Current Debt/Total Assets | 19% | 17% | 11% | n.a |
| Acid Test | 0.42 | 3.10 | 7.84 | n.a |
| Sales/Net Worth | 0.00 | 0.00 | 40.15 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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