Art Packaging Installation Business Plan

Financial Plan

The following sections will outline important financial information.

The following table details important financial assumptions.

The Break-even Analysis indicates that approximately $3,400 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis


Monthly Revenue Break-even	$2,936

Assumptions:
Average Percent Variable Cost	5%
Estimated Monthly Fixed Cost	$2,789

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$31,092	$56,700	$63,950
Direct Cost of Sales	$1,555	$2,835	$3,198
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$1,555	$2,835	$3,198

Gross Margin	$29,538	$53,865	$60,753
Gross Margin %	95.00%	95.00%	95.00%


Expenses
Payroll	$30,000	$35,000	$40,000
Sales and Marketing and Other Expenses	$1,200	$1,200	$1,200
Depreciation	$468	$468	$468
Leased Equipment	$0	$0	$0
Licenses and Bonding	$600	$600	$600
Insurance	$1,200	$1,200	$1,200
Rent	$0	$0	$0
Payroll Taxes	$0	$0	$0
Other	$0	$0	$0

Total Operating Expenses	$33,468	$38,468	$43,468

Profit Before Interest and Taxes	($3,930)	$15,397	$17,285
EBITDA	($3,462)	$15,865	$17,753
Interest Expense	$0	$0	$0
Taxes Incurred	$0	$4,619	$5,185

Net Profit	($3,930)	$10,778	$12,099
Net Profit/Sales	-12.64%	19.01%	18.92%

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	$31,092	$56,700	$63,950
Subtotal Cash from Operations	$31,092	$56,700	$63,950

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	$31,092	$56,700	$63,950

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$30,000	$35,000	$40,000
Bill Payments	$4,085	$10,065	$11,307
Subtotal Spent on Operations	$34,085	$45,065	$51,307

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	$34,085	$45,065	$51,307

Net Cash Flow	($2,992)	$11,635	$12,644
Cash Balance	$9,058	$20,693	$33,336

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$9,058	$20,693	$33,336
Other Current Assets	$0	$0	$0
Total Current Assets	$9,058	$20,693	$33,336

Long-term Assets
Long-term Assets	$0	$0	$0
Accumulated Depreciation	$468	$936	$1,404
Total Long-term Assets	($468)	($936)	($1,404)
Total Assets	$8,590	$19,757	$31,932

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$470	$859	$936
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$470	$859	$936

Long-term Liabilities	$0	$0	$0
Total Liabilities	$470	$859	$936

Paid-in Capital	$15,000	$15,000	$15,000
Retained Earnings	($2,950)	($6,880)	$3,898
Earnings	($3,930)	$10,778	$12,099
Total Capital	$8,120	$18,898	$30,997
Total Liabilities and Capital	$8,590	$19,757	$31,932

Net Worth	$8,120	$18,898	$30,997

The following Ratios table compares our planned estimates with Standard Industry Code #7299

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	82.36%	12.79%	7.99%

Percent of Total Assets
Other Current Assets	0.00%	0.00%	0.00%	44.22%
Total Current Assets	105.45%	104.74%	104.40%	72.16%
Long-term Assets	-5.45%	-4.74%	-4.40%	27.84%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	5.47%	4.35%	2.93%	31.22%
Long-term Liabilities	0.00%	0.00%	0.00%	11.80%
Total Liabilities	5.47%	4.35%	2.93%	43.02%
Net Worth	94.53%	95.65%	97.07%	56.98%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	95.00%	95.00%	95.00%	14.44%
Selling, General & Administrative Expenses	110.86%	79.70%	76.08%	7.72%
Advertising Expenses	0.00%	0.00%	0.00%	0.37%
Profit Before Interest and Taxes	-12.64%	27.16%	27.03%	1.12%

Main Ratios
Current	19.27	24.08	35.63	1.68
Quick	19.27	24.08	35.63	1.40
Total Debt to Total Assets	5.47%	4.35%	2.93%	57.54%
Pre-tax Return on Net Worth	-48.41%	81.48%	55.76%	3.81%
Pre-tax Return on Assets	-45.76%	77.93%	54.13%	8.97%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	-12.64%	19.01%	18.92%	n.a
Return on Equity	-48.41%	57.03%	39.03%	n.a

Activity Ratios
Accounts Payable Turnover	9.69	12.17	12.17	n.a
Payment Days	27	23	29	n.a
Total Asset Turnover	3.62	2.87	2.00	n.a

Debt Ratios
Debt to Net Worth	0.06	0.05	0.03	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a

Liquidity Ratios
Net Working Capital	$8,588	$19,834	$32,401	n.a
Interest Coverage	0.00	0.00	0.00	n.a

Additional Ratios
Assets to Sales	0.28	0.35	0.50	n.a
Current Debt/Total Assets	5%	4%	3%	n.a
Acid Test	19.27	24.08	35.63	n.a
Sales/Net Worth	3.83	3.00	2.06	n.a
Dividend Payout	0.00	0.00	0.00	n.a