Green Power Consultancy
Financial Plan
The following sections will outline the important Financial Assumptions.
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 |
Break-even Analysis
The Break-even Analysis is indicated below.
| Break-even Analysis | |
| Monthly Revenue Break-even | $7,333 |
| Assumptions: | |
| Average Percent Variable Cost | 9% |
| Estimated Monthly Fixed Cost | $6,641 |
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 | $87,047 | $202,343 | $238,402 |
| Direct Cost of Sales | $8,212 | $29,779 | $35,086 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $8,212 | $29,779 | $35,086 |
| Gross Margin | $78,835 | $172,565 | $203,317 |
| Gross Margin % | 90.57% | 85.28% | 85.28% |
| Expenses | |||
| Payroll | $52,600 | $93,000 | $122,000 |
| Sales and Marketing and Other Expenses | $4,800 | $4,800 | $4,800 |
| Depreciation | $1,800 | $1,800 | $1,800 |
| Rent | $6,000 | $6,000 | $6,000 |
| Utilities | $2,400 | $2,400 | $2,400 |
| Insurance | $2,400 | $2,400 | $2,400 |
| Payroll Taxes | $7,890 | $13,950 | $18,300 |
| Other | $1,800 | $1,800 | $1,800 |
| Total Operating Expenses | $79,690 | $126,150 | $159,500 |
| Profit Before Interest and Taxes | ($855) | $46,415 | $43,817 |
| EBITDA | $945 | $48,215 | $45,617 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $0 | $13,924 | $13,145 |
| Net Profit | ($855) | $32,490 | $30,672 |
| Net Profit/Sales | -0.98% | 16.06% | 12.87% |
Projected Cash Flow
The following table and chart indicate Projected Cash Flow.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $87,047 | $202,343 | $238,402 |
| Subtotal Cash from Operations | $87,047 | $202,343 | $238,402 |
| 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 | $87,047 | $202,343 | $238,402 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $52,600 | $93,000 | $122,000 |
| Bill Payments | $30,707 | $71,679 | $83,201 |
| Subtotal Spent on Operations | $83,307 | $164,679 | $205,201 |
| 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 | $83,307 | $164,679 | $205,201 |
| Net Cash Flow | $3,740 | $37,664 | $33,201 |
| Cash Balance | $27,590 | $65,254 | $98,456 |
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 | $27,590 | $65,254 | $98,456 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $27,590 | $65,254 | $98,456 |
| Long-term Assets | |||
| Long-term Assets | $9,000 | $9,000 | $9,000 |
| Accumulated Depreciation | $1,800 | $3,600 | $5,400 |
| Total Long-term Assets | $7,200 | $5,400 | $3,600 |
| Total Assets | $34,790 | $70,654 | $102,056 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $2,795 | $6,169 | $6,898 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $2,795 | $6,169 | $6,898 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $2,795 | $6,169 | $6,898 |
| Paid-in Capital | $40,000 | $40,000 | $40,000 |
| Retained Earnings | ($7,150) | ($8,005) | $24,485 |
| Earnings | ($855) | $32,490 | $30,672 |
| Total Capital | $31,995 | $64,485 | $95,157 |
| Total Liabilities and Capital | $34,790 | $70,654 | $102,056 |
| Net Worth | $31,995 | $64,485 | $95,157 |
Business Ratios
The following table contains typical Business Ratios of both Green Power as well as the industry as a whole.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | n.a. | 132.45% | 17.82% | 8.18% |
| Percent of Total Assets | ||||
| Other Current Assets | 0.00% | 0.00% | 0.00% | 41.37% |
| Total Current Assets | 79.30% | 92.36% | 96.47% | 75.36% |
| Long-term Assets | 20.70% | 7.64% | 3.53% | 24.64% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 8.03% | 8.73% | 6.76% | 31.49% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 16.85% |
| Total Liabilities | 8.03% | 8.73% | 6.76% | 48.34% |
| Net Worth | 91.97% | 91.27% | 93.24% | 51.66% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 90.57% | 85.28% | 85.28% | 100.00% |
| Selling, General & Administrative Expenses | 91.55% | 69.23% | 72.42% | 82.59% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 1.16% |
| Profit Before Interest and Taxes | -0.98% | 22.94% | 18.38% | 1.47% |
| Main Ratios | ||||
| Current | 9.87 | 10.58 | 14.27 | 1.93 |
| Quick | 9.87 | 10.58 | 14.27 | 1.50 |
| Total Debt to Total Assets | 8.03% | 8.73% | 6.76% | 3.09% |
| Pre-tax Return on Net Worth | -2.67% | 71.98% | 46.05% | 59.56% |
| Pre-tax Return on Assets | -2.46% | 65.69% | 42.93% | 7.63% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -0.98% | 16.06% | 12.87% | n.a |
| Return on Equity | -2.67% | 50.38% | 32.23% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 11.99 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 22 | 28 | n.a |
| Total Asset Turnover | 2.50 | 2.86 | 2.34 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.09 | 0.10 | 0.07 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $24,795 | $59,085 | $91,557 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.40 | 0.35 | 0.43 | n.a |
| Current Debt/Total Assets | 8% | 9% | 7% | n.a |
| Acid Test | 9.87 | 10.58 | 14.27 | n.a |
| Sales/Net Worth | 2.72 | 3.14 | 2.51 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
By 
