Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth and a sufficiently healthy financial position. The monthly estimates are included in the appendices.

Pro Forma Balance Sheet

Assets

Current Assets FY 2000 FY 2001 FY 2002

Cash $45,707 $105,178 $173,733

Accounts Receivable $15,019 $16,540 $17,612

Other Current Assets $0 $0 $0

Total Current Assets $60,726 $121,718 $191,345

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $1,800 $3,600 $5,400

Total Long-term Assets ($1,800) ($3,600) ($5,400)

Total Assets $58,926 $118,118 $185,945

Liabilities and Capital

Current Liabilities FY 2000 FY 2001 FY 2002

Accounts Payable $3,677 $3,575 $3,314

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $3,677 $3,575 $3,314

Long-term Liabilities $3,300 $6,600 $10,000

Total Liabilities $6,977 $10,175 $13,314

Paid-in Capital $20,000 $20,000 $20,000

Retained Earnings ($13,000) $31,949 $87,942

Earnings $44,949 $55,994 $64,689

Total Capital $51,949 $107,942 $172,631

Total Liabilities and Capital $58,926 $118,118 $185,945

Net Worth $51,949 $107,942 $172,631

Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8711, Engineering Services, are shown for comparison.

Ratio Analysis

FY 2000 FY 2001 FY 2002 Industry Profile

Sales Growth 0.00% 10.13% 6.48% 7.10%

Percent of Total Assets

Accounts Receivable 25.49% 14.00% 9.47% 35.40%

Inventory 0.00% 0.00% 0.00% 3.70%

Other Current Assets 0.00% 0.00% 0.00% 38.30%

Total Current Assets 103.05% 103.05% 102.90% 77.40%

Long-term Assets -3.05% -3.05% -2.90% 22.60%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 6.24% 3.03% 1.78% 44.50%

Long-term Liabilities 5.60% 5.59% 5.38% 11.70%

Total Liabilities 11.84% 8.61% 7.16% 56.20%

Net Worth 88.16% 91.39% 92.84% 43.80%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 70.00% 75.00% 80.00% 0.00%

Selling, General &

Administrative Expenses 62.22% 65.24% 69.07% 81.80%

Advertising Expenses 0.51% 0.58% 0.54% 0.20%

Profit Before Interest and Taxes 45.42% 51.21% 56.57% 2.50%

Main Ratios

Current 16.51 34.04 57.74 1.69

Quick 16.51 34.04 57.74 1.37

Total Debt to Total Assets 11.84% 8.61% 7.16% 56.20%

Pre-tax Return on Net Worth 102.54% 61.03% 44.74% 6.00%

Pre-tax Return on Assets 90.40% 55.77% 41.54% 13.60%

Additional Ratios FY 2000 FY 2001 FY 2002

Net Profit Margin 38.20% 43.21% 46.88

Return on Equity 86.53% 51.87% 37.47%

Activity Ratios

Accounts Receivable Turnover 7.84 7.84 7.84

Collection Days 43 44 45

Inventory Turnover 0.00 0.00 0.00

Accounts Payable Turnover 17.75 18.54 20.04

Payment Days 21 20 19

Total Asset Turnover 2.00 1.10 0.74

Debt Ratios

Debt to Net Worth 0.13 0.09 0.08

Current Liab. to Liab. 0.53 0.35 0.25

Liquidity Ratios FY 2000 FY 2001 FY 2002

Net Working Capital $57,049 $118,142 $188,031

Interest Coverage 299.00 134.08 94.06

Additional Ratios

Assets to Sales 0.50 0.91 1.35

Current Debt/Total Assets 6% 3% 2%

Acid Test 12.43 29.42 52.43

Sales/Net Worth 2.27 1.20 0.80

Dividend Payout 0.00 0.00 0.00

Note:

Executive Summary: Write this last. It’s just a page or two of highlights.

Company Description: Legal establishment, history, start-up plans, etc.

Product or Service:Describe what you’re selling. Focus on customer benefits.

Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.

Strategy and Implementation: Be specific. Include management responsibilities with dates and budgets. Make sure you can track results.

Web Plan Summary: For e-commerce, include discussion of website, development costs, operations, sales and marketing strategies.

Management Team: Describe the organization and the key management team members.

Financial Analysis: Make sure to include at the very least your projected Profit and Loss and Cash Flow tables.

Exercise 3. Using the information from Business Plan fulfill the following tasks.

1. Create a company and imagine the sphere of your business. Make a business plan summary pointing out the principles of your activity and urgency of your business.

2. Make a Power Point presentation of your business plan.

UNIT 8

Date: 2016-01-14; view: 722