Table of Contents

1.0 Executive Summary.....................................................................................................................1

Chart: Highlights...........................................................................................................................2
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Company History.......................................................................................................................3
Table: Past Performance.............................................................................................................3
Chart: Past Performance............................................................................................................4
2.3 Company Locations and Facilities.......................................................................................4
3.0 Products............................................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................5
4.1 Market Segmentation..............................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................6
Table: Market Analysis................................................................................................................6
4.2 Target Market Segment Strategy........................................................................................6
4.3 Service Business Analysis......................................................................................................6
4.3.1 Competition and Buying Patterns...............................................................................7
5.0 Strategy and Implementation Summary.............................................................................7
5.1 Marketing Strategy...................................................................................................................7
5.2 Sales Strategy............................................................................................................................7
5.2.1 Sales Forecast....................................................................................................................7
Table: Sales Forecast...............................................................................................................7
Chart: Sales Monthly...............................................................................................................8
Chart: Sales by Year................................................................................................................8
5.3 Milestones....................................................................................................................................8
Table: Milestones...........................................................................................................................9
Chart: Milestones..........................................................................................................................9
6.0 Management Summary.............................................................................................................10
6.1 Personnel Plan..........................................................................................................................10
Table: Personnel..........................................................................................................................10
7.0 Financial Plan................................................................................................................................11
7.0 Financial Plan................................................................................................................................11
7.1 Break-even Analysis...............................................................................................................11
Chart: Break-even Analysis.....................................................................................................11
Table: Break-even Analysis.....................................................................................................11
7.2 Projected Profit and Loss.....................................................................................................12
7.2 Projected Profit and Loss.....................................................................................................12
Chart: Profit Monthly.................................................................................................................12
Chart: Profit Yearly.....................................................................................................................12
Table: Profit and Loss................................................................................................................13
7.3 Projected Cash Flow...............................................................................................................13
Chart: Cash...................................................................................................................................14
Table: Cash Flow.........................................................................................................................14
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7.4 Projected Balance Sheet......................................................................................................16

7.4 Projected Balance Sheet......................................................................................................16
Table: Balance Sheet.................................................................................................................16
7.5 Business Ratios........................................................................................................................16
Table: Ratios.................................................................................................................................16
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

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The Pasta Tree

1.0 Executive Summary

The Pasta Tree is the only fresh pasta retail producer in the city of Springfield. For
the past three years, the company has sold its fresh pasta products out of its own
storefront and in the city's five natural food stores. The company has built a loyal
consumer base with customers that have increased sales by 15% each year for the
past three years. This year, The Pasta Tree will gross more than $300,000 in
sales. This was generated from an initial investment of $80,000.
The Pasta Tree is planning to expand its operation to include distribution to the major
supermarket chains within the entire city. There are fifteen major supermarkets that
operate in Springfield and over thirty-five smaller grocery stores that serve the metro
and expanding suburban communities. To meet the increased product demand, The
Pasta Tree will have to double production. Owner funding and internally generated
cash flow will enable only a portion of the expansion plan. The Pasta Tree will secure
a $50,000 loan to fund the expansion of its production facility. Sales projections for
the next three years are based on current sales success with the target customer
base in Springfield.
This plan will result in sales revenues growing to almost $420,000 by Year 3.
The Pasta Tree is located in a 3,000 square feet facility that operates as a storefront
and a production facility. With the expansion, 3/4 of the area will be dedicated to
production. The preparation of the new production space will cost $10,000. The new
equipment will cost an additional $30,000. The company will also have to upgrade its
packaging equipment to meet the new demand. This will cost $10,000.
The Pasta Tree will embark on a new marketing program in supermarkets and
grocery stores that will be carrying its products. Eye catching in-store displays have
been created to attract new customers. The displays will also hold discount coupons
to promote sales to new customers.
In conjunction with the introduction of the products, The Pasta Tree will be a major
sponsor of the Canal Run which raises funds for children's cancer research.

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Chart: Highlights

1.1 Objectives
The objectives of The Pasta Tree are the following:

Expand production facility without compromising product quality.

Establish strong sales in the city's major supermarket chains.
Maintain tight control of cost and operation during expansion.

1.2 Mission
The Pasta Tree's mission is as follows:

Quality: Our products are the highest quality and the freshest pasta available to
the consumers.
Value: We offer greater value to the consumer with nutritious products that have
tremendous flavor.
Integrity: Our customers depend on the quality of our pasta products. Our
commitment to the highest standard is the foundation of our customers trust in
The Pasta Tree. We promise our customer that they will never be disappointed
with our products.

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2.0 Company Summary

The Pasta Tree has built a reputation on offering the most delicious, nutritious pasta
products. The business will operate as a general partnership with Jill Forman and
John Wingate both performing management responsibilities.
2.1 Company Ownership
The Pasta Tree is owned by Jill Forman and John Wingate.
2.2 Company History
The Pasta Tree's first products were created in the kitchen of Jill Forman. It was in
her kitchen that she first created fresh pasta that was used in a part-time catering
business operated by John Wingate and herself.
Customers quickly began to request special orders of the pasta products. They
proved to be so popular that Jill and John pooled their resources and began The
Pasta Tree. They opened a storefront and began to sell directly to the public.
After one year of operation, John was successful in getting the city's natural food
stores to carry The Pasta Tree products. Over the last two years, The Pasta Tree's
products have become popular in upscale natural food stores in Springfield.
The Pasta Tree's operations has expanded dramatically over the past three years.
What was initially a two person operation has expanded to now include a staff of four
in production, delivery, and sales.
The following table and chart illustrates the sales success of The Pasta Tree.

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Table: Past Performance

Past Performance
Sales
Gross Margin
Gross Margin %
Operating Expenses
Collection Period (days)
Inventory Turnover

FY 2000
$155,000
$60,000
38.71%
$100,000
35
15.00

FY 2001
$178,250
$70,000
39.27%
$105,000
35
15.00

FY 2002
$200,000
$80,000
40.00%
$110,000
39
15.00

FY 2000

FY 2001

FY 2002

$20,000
$10,000
$8,000
$0
$38,000

$30,000
$12,000
$8,000
$0
$50,000

$70,000
$14,000
$8,000
$5,000
$97,000

$0
$0
$0

$0
$0
$0

$36,736
$5,248
$31,488

$38,000

$50,000

$128,488

$3,000
$2,000
$0
$5,000

$7,000
$4,000
$0
$11,000

$10,000
$3,000
$0
$13,000

$30,000
$35,000

$20,000
$31,000

$10,000
$23,000

$20,000
($17,000)
$0
$3,000

$10,000
$9,000
$0
$19,000

$0
$81,488
$24,000
$105,488

$38,000

$50,000

$128,488

Balance Sheet

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities (interest free)
Total Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Capital and Liabilities

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The Pasta Tree

Other Inputs
Payment Days
Sales on Credit
Receivables Turnover

30
$105,000
10.50

30
$114,000
9.50

30
$123,000
8.79

Chart: Past Performance

2.3 Company Locations and Facilities

The Pasta Tree is located on 1234 Main St. The storefront is 3,000 square feet with
2/3 of the area dedicated to production. The location is perfect for foot traffic and
there is quick access to the city's freeway system.
3.0 Products
The Pasta Tree offers the following products:

Fettuccine;
Linguini;
Spaghettini;
Spinach linguini;
Tomato fettuccine;
Tricolor fusilli;
New mexico chile linguini;
Black linguini;
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The Pasta Tree

Basil spaghettini;
Cayenne tagliolini;
Black and white spaghettini.

4.0 Market Analysis Summary

The population in Springfield has grown by 5% over the past five years. The current
population stands at over 250,000. It is projected that the population will continue its
growth pattern for the next three years and will eventually reach over 280,000.
There are fifteen major supermarkets that operate in Springfield and over thirty-five
smaller grocery stores that serve the metro and expanding suburban
communities. Approximately 60% of these stores serve communities that are made
up predominantly of urban professionals. The Pasta Tree has identified the upscale
shopper as the target customer for the fresh pasta products.
4.1 Market Segmentation
The Pasta Tree has identified two store types where the products will reach the target
customers:

Supermarkets: The volume of activity in these stores creates tremendous

opportunity for The Pasta Tree. The supermarkets have been losing market share
steadily to smaller stores that offer the customers products that the larger stores
don't carry. Though the price of the products ($3.00 for a serving for two) is
higher than dry pasta products, it is still affordable to most shoppers.

Smaller Grocery Stores: These stores serve customers in specific communities.

These also include speciality stores like wine shops and fish markets where the
product line would fit in nicely.

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Chart: Market Analysis (Pie)

Table: Market Analysis

Market Analysis
2002
Potential Customers
Supermarkets
Smaller Stores
Total

Growth
5%
5%
5.53%

15
35
50

2003
16
37
53

2004
17
39
56

2005
18
41
59

2006
19
43
62

CAGR
6.09%
5.28%
5.53%

4.2 Target Market Segment Strategy

The Pasta Tree's marketing will focus on the urban professional segment, which has
little time to prepare dinner and will be attracted to quality and freshness of The
Pasta Tree products. The pasta products are ready to eat in half the time of dry pasta
(one to three minutes) and are fresher than the competition. This gives The Pasta
Tree products a decidedly better taste and consistency.
4.3 Service Business Analysis
Pasta is a staple in a supermarket with a number of products and brands to pick
from. Most of the competition is in dry pasta. Fresh pasta has a much shorter shelf
life (about 30 days) so there is less competition in products. Currently, several large
food companies offer a limited line of fresh pasta products. Though fresh, these
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The Pasta Tree

products are only slightly better than dry pasta and really only offer reduced
preparation time. As a local product, The Pasta Tree can offer better quality and
better packaging of fresh pasta.
4.3.1 Competition and Buying Patterns
The Pasta Tree products will be displayed in the deli case of the supermarkets. The
only competition in this section are two other product lines whose packaging is boxy
and unattractive. To improve the ability to transport the product, these pasta
products have been folded into a small container. The Pasta Tree products are not
folded and are wrapped in an air-tight colorful plastic package. Their presentation is
similar to the dry pasta packaging which is important to consumers. No one wants
their fettuccine folded.
5.0 Strategy and Implementation Summary
The strategy of The Pasta Tree will be to initially push our three most popular sellers;
fettuccine, linguini, and spaghettini. Our plan is to introduce the rest of The Pasta
Tree's product line as sales increase and we can negotiate more cooler space for
products.
5.1 Marketing Strategy
The Pasta Tree will advertise its products with a 20% off regular price coupon during
the first month of the product being introduced into the supermarkets. The Pasta
Tree will use in-store displays that will hold the coupons and attract customer
attention.
In addition, The Pasta Tree will be a major sponsor of the city's Canal Run that raises
money for children's cancer research. The run will occur the first weekend the
products have been introduced into supermarkets. The Pasta Tree will distribute
discount coupons at the event.
5.2 Sales Strategy
The sales strategy is to present our products as an affordable upscale dinner item
that is quick to make and tastier than our dry competition.
5.2.1 Sales Forecast
The following table and charts show the rapid ramp-up of sales during the next
twelve months of operation.

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The Pasta Tree

Table: Sales Forecast

Sales Forecast
Sales
Supermarkets
Grocery Stores
Total Sales
Direct Cost of Sales
Supermarkets
Grocery Stores
Subtotal Direct Cost of Sales

FY 2003

FY 2004

FY 2005

$128,000
$185,000
$313,000

$143,000
$203,000
$346,000

$173,000
$246,000
$419,000

FY 2003
$12,800
$18,500
$31,300

FY 2004
$15,000
$20,300
$35,300

FY 2005
$16,400
$23,900
$40,300

Chart: Sales Monthly

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Chart: Sales by Year

5.3 Milestones
The accompanying table and chart shows specific milestones, with responsibilities
assigned, dates, and budgets. We are focusing on a few key milestones that should
be accomplished.
Table: Milestones

Milestones
Milestone
Production Facility
Expansion
Production Equipment
In-Store Displays
Canal Run
Totals

Start Date
1/1/2002

End Date
3/15/2002

Budget
$10,000

Manager
Jill Forman

Department
Production

3/1/2002
2/10/2002

3/20/2002
3/28/2002

$40,000
$5,000

Production
Sales

1/1/2001

4/12/2002

$1,000

Jill Forman
John
Wingate
John
Wingate

Sales

$56,000

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Chart: Milestones

6.0 Management Summary

Co-owners, Jill Forman and John Wingate, currently manage the daily operation of
The Pasta Tree. Jill is responsible for production and distribution, while John works as
the sales manager.
Jill and John have fifteen years of experience working in food production and sales.
Jill Forman was one of the owners of the Mason Peak Deli, 4th and Tyler. Jill managed
the deli for five years, eventually starting a catering business with John Wingate in
1997.
John Wingate was a salesperson for Sunburst Natural Foods for ten years. At the
time he started the catering business with Jill, John annual sales had reached $1
million dollars.

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6.1 Personnel Plan

The personnel plan for The Pasta Tree is as follows:

Production manager;
Sales manager;
Production staff (4 total, 2 new hires);
Store staff (1 new hire);
Delivery staff/sales (1 new hire).

Table: Personnel

Personnel Plan
FY 2003
$36,000
$36,000
$81,600
$24,000
$21,600
8

FY 2004
$38,880
$38,880
$88,128
$25,920
$23,328
8

FY 2005
$44,712
$44,712
$101,347
$29,808
$26,827
8

$199,200

$215,136

$247,406

Production Manager
Sales Manager
Production Staff
Delivery
Store Staff
Total People
Total Payroll
7.0 Financial Plan
The following is financial plan for The Pasta Tree.
7.1 Break-even Analysis
The monthly break-even point is $24,989.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$24,989

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

10%
$22,490
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Chart: Break-even Analysis

7.2 Projected Profit and Loss

The following table and charts are the projected profit and loss for three years.

Chart: Profit Monthly

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The Pasta Tree

Chart: Profit Yearly

Table: Profit and Loss

Pro Forma Profit and Loss

Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales

FY 2003
$313,000
$31,300
$0
$31,300

FY 2004
$346,000
$35,300
$0
$35,300

FY 2005
$419,000
$40,300
$0
$40,300

Gross Margin
Gross Margin %

$281,700
90.00%

$310,700
89.80%

$378,700
90.38%

$199,200
$6,000

$215,136
$8,000

$247,406
$10,000

$9,600
$0
$3,600
$9,600
$12,000
$29,880

$9,600
$0
$12,000
$9,600
$12,000
$32,270

$9,600
$0
$12,000
$9,600
$12,000
$37,111

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes

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The Pasta Tree

Other
Total Operating Expenses
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

$0

$0

$0

$269,880

$298,606

$337,717

$11,820
$21,420
$4,760
$2,118

$12,094
$21,694
$3,405
$2,607

$40,983
$50,583
$1,715
$11,780

$4,942
1.58%

$6,082
1.76%

$27,488
6.56%

7.3 Projected Cash Flow

The following table and chart are the projected cash flow for three years.
Table: Cash Flow

Pro Forma Cash Flow

FY 2003

FY 2004

FY 2005

Cash from Operations

Cash Sales
Cash from Receivables
Subtotal Cash from Operations

$78,250
$203,750
$282,000

$86,500
$254,756
$341,256

$104,750
$303,755
$408,505

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$0
$0
$50,000
$0
$0
$0
$332,000

$0
$0
$0
$0
$0
$0
$0
$341,256

$0
$0
$0
$0
$0
$0
$0
$408,505

FY 2003

FY 2004

FY 2005

$199,200
$94,829
$294,029

$215,136
$116,167
$331,303

$247,406
$133,555
$380,962

Cash Received

Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

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The Pasta Tree

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

$0
$1,200
$0
$18,000
$0
$0
$0
$313,229

$0
$1,200
$0
$18,300
$0
$0
$0
$350,803

$0
$600
$0
$13,700
$0
$0
$0
$395,262

$18,771
$88,771

($9,547)
$79,224

$13,243
$92,467

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The Pasta Tree

Chart: Cash

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The Pasta Tree

7.4 Projected Balance Sheet

The following table shows the projected balance sheet for three years.
Table: Balance Sheet

Pro Forma Balance Sheet

FY 2003

FY 2004

FY 2005

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets

$88,771
$45,000
$3,410
$5,000
$142,181

$79,224
$49,744
$4,078
$5,000
$138,046

$92,467
$60,240
$4,712
$5,000
$162,419

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

$36,736
$14,848
$21,888
$164,069

$36,736
$24,448
$12,288
$150,334

$36,736
$34,048
$2,688
$165,107

Liabilities and Capital

FY 2003

FY 2004

FY 2005

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$9,839
$1,800
$0
$11,639

$9,522
$600
$0
$10,122

$11,107
$0
$0
$11,107

Long-term Liabilities
Total Liabilities

$42,000
$53,639

$23,700
$33,822

$10,000
$21,107

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$0
$105,488
$4,942
$110,430
$164,069

$0
$110,430
$6,082
$116,512
$150,334

$0
$116,512
$27,488
$144,000
$165,107

Net Worth

$110,430

$116,512

$144,000

Assets

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The Pasta Tree

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios
based on the Standard Industrial Classification (SIC) code 5149, Groceries and
related products, are shown for comparison.
Table: Ratios
Ratio Analysis
FY 2003

FY 2004

FY 2005

56.50%

10.54%

21.10%

Industry
Profile
4.60%

27.43%
2.08%
3.05%
86.66%
13.34%
100.00%

33.09%
2.71%
3.33%
91.83%
8.17%
100.00%

36.49%
2.85%
3.03%
98.37%
1.63%
100.00%

33.30%
26.00%
20.90%
80.20%
19.80%
100.00%

7.09%
25.60%
32.69%
67.31%

6.73%
15.76%
22.50%
77.50%

6.73%
6.06%
12.78%
87.22%

45.20%
10.00%
55.20%
44.80%

100.00%
90.00%
88.44%

100.00%
89.80%
88.08%

100.00%
90.38%
83.95%

100.00%
44.10%
26.70%

1.92%
3.78%

2.31%
3.50%

2.39%
9.78%

0.70%
0.80%

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets

12.22
11.92
32.69%
6.39%
4.30%

13.64
13.24
22.50%
7.46%
5.78%

14.62
14.20
12.78%
27.27%
23.78%

1.69
1.01
55.20%
3.60%
8.00%

Additional Ratios
Net Profit Margin
Return on Equity

FY 2003
1.58%
4.48%

FY 2004
1.76%
5.22%

FY 2005
6.56%
19.09%

n.a
n.a

5.22

5.22

5.22

n.a

Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes

Activity Ratios
Accounts Receivable Turnover

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The Pasta Tree

Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover

58
9.76
9.62
30
1.91

67
9.43
12.17
30
2.30

64
9.17
12.17
28
2.54

n.a
n.a
n.a
n.a
n.a

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

0.49
0.22

0.29
0.30

0.15
0.53

n.a
n.a

$130,542
2.48

$127,924
3.55

$151,312
23.90

n.a
n.a

0.52
7%
8.06
2.83
0.00

0.43
7%
8.32
2.97
0.00

0.39
7%
8.77
2.91
0.00

n.a
n.a
n.a
n.a
n.a

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

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Appendix
Table: Sales Forecast

Sales Forecast
Apr
Sales
Supermarkets
Grocery Stores
Total Sales
Direct Cost of Sales
Supermarkets
Grocery Stores
Subtotal Direct Cost of
Sales

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

0% $9,000 $9,000 $10,000 $9,000 $10,000 $10,000 $10,000 $11,000 $12,000 $12,000 $13,000 $13,000
0% $14,000 $14,000 $14,000 $15,000 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $17,000 $18,000
$23,000 $23,000 $24,000 $24,000 $25,000 $25,000 $25,000 $27,000 $28,000 $28,000 $30,000 $31,000
Apr
$900
$1,400
$2,300

May
$900
$1,400
$2,300

Jun
$1,000
$1,400
$2,400

Jul
$900
$1,500
$2,400

Aug
$1,000
$1,500
$2,500

Sep
$1,000
$1,500
$2,500

Oct
$1,000
$1,500
$2,500

Nov
$1,100
$1,600
$2,700

Dec
$1,200
$1,600
$2,800

Jan
$1,200
$1,600
$2,800

Feb
$1,300
$1,700
$3,000

Mar
$1,300
$1,800
$3,100

Page 1

Appendix
Table: Personnel

Personnel Plan
Production Manager
Sales Manager
Production Staff
Delivery
Store Staff
Total People
Total Payroll

0%
0%
0%
0%
0%

Apr
$3,000
$3,000
$6,800
$2,000
$1,800
8

May
$3,000
$3,000
$6,800
$2,000
$1,800
8

Jun
$3,000
$3,000
$6,800
$2,000
$1,800
8

Jul
$3,000
$3,000
$6,800
$2,000
$1,800
8

Aug
$3,000
$3,000
$6,800
$2,000
$1,800
8

Sep
$3,000
$3,000
$6,800
$2,000
$1,800
8

Oct
$3,000
$3,000
$6,800
$2,000
$1,800
8

Nov
$3,000
$3,000
$6,800
$2,000
$1,800
8

Dec
$3,000
$3,000
$6,800
$2,000
$1,800
8

Jan
$3,000
$3,000
$6,800
$2,000
$1,800
8

Feb
$3,000
$3,000
$6,800
$2,000
$1,800
8

Mar
$3,000
$3,000
$6,800
$2,000
$1,800
8

$16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600

Page 2

Appendix
Table: General Assumptions

General
Assumptions
Plan Month
Current Interest
Rate
Long-term
Interest Rate
Tax Rate
Other

Apr
1
10.00%

May
2
10.00%

Jun
3
10.00%

Jul
4
10.00%

Aug
5
10.00%

Sep
6
10.00%

Oct
7
10.00%

Nov
8
10.00%

Dec
9
10.00%

Jan
10
10.00%

Feb
11
10.00%

Mar
12
10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

30.00%
0

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit

and Loss
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
$23,000 $23,000 $24,000 $24,000 $25,000 $25,000 $25,000 $27,000 $28,000 $28,000 $30,000 $31,000
$2,300
$2,300
$2,400
$2,400
$2,500
$2,500
$2,500
$2,700
$2,800
$2,800
$3,000
$3,100

Sales
Direct Cost of
Sales
Other Production
Expenses
Total Cost of
Sales
Gross Margin
Gross Margin %

Expenses
Payroll
Sales and
Marketing and
Other Expenses
Depreciation
Leased
Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other
Total Operating
Expenses

15%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$2,300

$2,300

$2,400

$2,400

$2,500

$2,500

$2,500

$2,700

$2,800

$2,800

$3,000

$3,100

$20,700
90.00%

$20,700
90.00%

$21,600
90.00%

$21,600
90.00%

$22,500
90.00%

$22,500
90.00%

$22,500
90.00%

$24,300
90.00%

$25,200
90.00%

$25,200
90.00%

$27,000
90.00%

$27,900
90.00%

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$16,600
$500

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$800
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$300
$800
$1,000
$2,490
$0

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490
Page 4

Appendix
Profit Before
Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred

($1,790)

($1,790)

($890)

($890)

$10

$10

$10

$1,810

$2,710

$2,710

$4,510

$5,410

($990)
$345
($641)

($990)
$332
($636)

($90)
$402
($388)

($90)
$388
($383)

$810
$458
($135)

$810
$445
($131)

$810
$432
($127)

$2,610
$418
$418

$3,510
$405
$692

$3,510
$392
$696

$5,310
$378
$1,240

$6,210
$365
$1,514

Net Profit
Net Profit/Sales

($1,495)
-6.50%

($1,485)
-6.46%

($904)
-3.77%

($895)
-3.73%

($314)
-1.26%

($305)
-1.22%

($295)
-1.18%

$974
3.61%

$1,614
5.76%

$1,623
5.80%

$2,892
9.64%

$3,532
11.39%

Page 5

Appendix
Table: Cash Flow

Pro Forma Cash Flow

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from
Operations
Additional Cash
Received
Sales Tax, VAT,
HST/GST Received
New Current Borrowing
New Other Liabilities
(interest-free)
New Long-term
Liabilities
Sales of Other Current
Assets
Sales of Long-term
Assets
New Investment
Received
Subtotal Cash Received
Expenditures

$5,750 $5,750 $6,000 $6,000 $6,250 $6,250 $6,250 $6,750 $7,000 $7,000 $7,500 $7,750
$7,000 $7,575 $17,250 $17,275 $18,000 $18,025 $18,750 $18,750 $18,800 $20,275 $21,000 $21,050
$12,750 $13,325 $23,250 $23,275 $24,250 $24,275 $25,000 $25,500 $25,800 $27,275 $28,500 $28,800

0.00%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$30,000

$0

$10,000

$0

$10,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$42,750 $13,325 $33,250 $23,275 $34,250 $24,275 $25,000 $25,500 $25,800 $27,275 $28,500 $28,800
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Expenditures from
Operations
Page 6

Appendix
Cash Spending
Bill Payments
Subtotal Spent on
Operations

$16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600
$10,160 $4,794 $4,850 $6,769 $7,512 $8,020 $7,904 $7,927 $8,854 $9,093 $9,009 $9,936
$26,760 $21,394 $21,450 $23,369 $24,112 $24,620 $24,504 $24,527 $25,454 $25,693 $25,609 $26,536

Additional Cash Spent

Sales Tax, VAT,
HST/GST Paid Out
Principal Repayment of
Current Borrowing
Other Liabilities
Principal Repayment
Long-term Liabilities
Principal Repayment
Purchase Other Current
Assets
Purchase Long-term
Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$28,360 $22,994 $23,050 $24,969 $25,712 $26,220 $26,104 $26,127 $27,054 $27,293 $27,209 $28,136

Net Cash Flow

Cash Balance

$14,390 ($9,669) $10,200 ($1,694) $8,538 ($1,945) ($1,104)

($627) ($1,254)
($18) $1,291
$664
$84,390 $74,721 $84,921 $83,226 $91,764 $89,819 $88,715 $88,088 $86,834 $86,816 $88,107 $88,771

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Table: Balance Sheet

Pro Forma
Balance
Sheet
Apr
Assets

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Starting
Balances
Page 7

Appendix
Current
Assets
Cash
Accounts
Receivable
Inventory
Other
Current
Assets
Total Current
Assets
Long-term
Assets
Long-term
Assets
Accumulated
Depreciation
Total Longterm Assets
Total Assets

$70,000
$14,000

$84,390
$24,250

$74,721
$33,925

$84,921
$34,675

$83,226
$35,400

$91,764
$36,150

$89,819
$36,875

$88,715
$36,875

$88,088
$38,375

$86,834
$40,575

$86,816
$41,300

$88,107
$42,800

$88,771
$45,000

$8,000
$5,000

$5,700
$5,000

$3,400
$5,000

$2,640
$5,000

$2,640
$5,000

$2,750
$5,000

$2,750
$5,000

$2,750
$5,000

$2,970
$5,000

$3,080
$5,000

$3,080
$5,000

$3,300
$5,000

$3,410
$5,000

$97,000

$119,340 $117,046

$127,23
6

$126,26
6

$135,66
4

$134,44
4

$133,34
0

$134,43
3

$135,48
9

$136,19
6

$139,20
7

$142,18
1

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$36,736

$5,248

$6,048

$6,848

$7,648

$8,448

$9,248

$10,048

$10,848

$11,648

$12,448

$13,248

$14,048

$14,848

$31,488

$30,688

$29,888

$29,088

$28,288

$27,488

$26,688

$25,888

$25,088

$24,288

$23,488

$22,688

$21,888

$128,48
8

$150,02
8

$146,93
4

$156,32
4

$154,55
4

$163,15
2

$161,13
2

$159,22
8

$159,52
1

$159,77
7

$159,68
4

$161,89
5

$164,06
9

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

$10,000

$4,635

$4,626

$6,519

$7,245

$7,756

$7,641

$7,632

$8,551

$8,793

$8,678

$9,597

$9,839

$3,000

$2,900

$2,800

$2,700

$2,600

$2,500

$2,400

$2,300

$2,200

$2,100

$2,000

$1,900

$1,800

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$13,000

$7,535

$7,426

$9,219

$9,845

$10,256

$10,041

$9,932

$10,751

$10,893

$10,678

$11,497

$11,639
Page 8

Liabilities
and Capital
Current
Liabilities
Accounts
Payable
Current
Borrowing
Other
Current
Liabilities
Subtotal

Appendix
Current
Liabilities
Long-term
Liabilities
Total
Liabilities
Paid-in
Capital
Retained
Earnings
Earnings
Total Capital
Total
Liabilities
and Capital
Net Worth

$10,000

$38,500

$37,000

$45,500

$44,000

$52,500

$51,000

$49,500

$48,000

$46,500

$45,000

$43,500

$42,000

$23,000

$46,035

$44,426

$54,719

$53,845

$62,756

$61,041

$59,432

$58,751

$57,393

$55,678

$54,997

$53,639

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$81,488
$24,000
$105,48
8
$128,48
8

$105,48
8
($1,495)
$103,99
4
$150,02
8

$105,48
8
($2,980)
$102,50
8
$146,93
4

$105,48
8
($3,884)
$101,60
4
$156,32
4

$105,48
8
($4,779)
$100,70
9
$154,55
4

$105,48
8
($5,092)
$100,39
6
$163,15
2

$105,48
8
($5,397)
$100,09
1
$161,13
2

$105,48
8
($5,692)
$99,796

$105,48
8
($4,718)
$100,77
0
$159,52
1

$105,48
8
($3,104)
$102,38
4
$159,77
7

$105,48
8
($1,482)
$104,00
6
$159,68
4

$105,48 $105,48
8
8
$1,411
$4,942
$106,89 $110,430
9
$161,89 $164,06
5
9

$105,48
8

$103,99
4

$102,50
8

$101,60
4

$100,70
9

$100,39
6

$100,09
1

$99,796

$100,77
0

$102,38
4

$104,00
6

$106,89 $110,430
9

$159,22
8

Page 9