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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......................................................................................................................4
Chart: Past Performance......................................................................................................................5
2.3 Company Locations and Facilities.....................................................................................................5
3.0 Products..................................................................................................................................................5
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................6
Table: Market Analysis........................................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................................7
4.3 Service Business Analysis.................................................................................................................7
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..............................................................................................................................8
Table: Sales Forecast.......................................................................................................................8
Chart: Sales Monthly.......................................................................................................................8
Chart: Sales by Year........................................................................................................................9
5.3 Milestones..........................................................................................................................................9
Table: Milestones.................................................................................................................................9
Chart: Milestones...............................................................................................................................10
6.0 Management Summary........................................................................................................................10
6.1 Personnel Plan..................................................................................................................................11
Table: Personnel.................................................................................................................................11
7.0 Financial Plan.......................................................................................................................................11
7.1 Break-even Analysis........................................................................................................................11
Table: Break-even Analysis...............................................................................................................11
Chart: Break-even Analysis...............................................................................................................12
7.2 Projected Profit and Loss.................................................................................................................12
Chart: Profit Monthly.........................................................................................................................12
Chart: Profit Yearly............................................................................................................................13
Table: Profit and Loss........................................................................................................................13
7.3 Projected Cash Flow........................................................................................................................14
Table: Cash Flow...............................................................................................................................14
............................................................................................................................................................14
Page 1

Table of Contents

Chart: Cash.........................................................................................................................................15
................................................................................................................................................................15
7.4 Projected Balance Sheet...................................................................................................................16
Table: Balance Sheet..........................................................................................................................16
................................................................................................................................................................16
Table: Ratios......................................................................................................................................17
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: General Assumptions........................................................................................................................3
......................................................................................................................................................................3
Table: Profit and Loss..................................................................................................................................4
......................................................................................................................................................................4
Table: Cash Flow.........................................................................................................................................5
Table: Balance Sheet....................................................................................................................................6

Page 2

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.

Page 1

The Pasta Tree

Chart: Highlights

Highlights
$400,000
$360,000
$320,000
$280,000

Sales

$240,000

Gross Margin

$200,000

Net Profit

$160,000
$120,000
$80,000
$40,000
$0
FY 2003

FY 2004

FY 2005

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.

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.

Page 2

The Pasta Tree

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.

Page 3

The Pasta Tree

Table: Past Performance

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

FY 2000

FY 2001

FY 2002

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

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

$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

30
$105,000
10.50

30
$114,000
9.50

30
$123,000
8.79

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
Other Inputs
Payment Days
Sales on Credit
Receivables Turnover

Page 4

The Pasta Tree

Chart: Past Performance

Past Performance
$200,000
$180,000
$160,000
$140,000

Sales

$120,000

Gross

$100,000

Net

$80,000
$60,000
$40,000
$20,000
$0
FY 2000

FY 2001

FY 2002

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;
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.

Page 5

The Pasta Tree

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.

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Supermarkets
Smaller Stores

Table: Market Analysis

Market Analysis
2002
Potential Customers

Growth

2003

2004

2005

2006
CAGR

Page 6

The Pasta Tree

Supermarkets
Smaller Stores
Total

5%
5%
5.53%

15
35
50

16
37
53

17
39
56

18
41
59

19
43
62

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 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 airtight 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.

Page 7

The Pasta Tree

5.2.1 Sales Forecast

The following table and charts show the rapid ramp-up of sales during the next twelve months
of operation.
Table: Sales Forecast

Sales Forecast
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

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

Chart: Sales Monthly

Sales Monthly
$30,000
$27,000
$24,000
$21,000
$18,000

Supermarkets

$15,000

Grocery Stores

$12,000
$9,000
$6,000
$3,000
Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

$0

Page 8

The Pasta Tree

Chart: Sales by Year

Sales by Year

$400,000
$350,000
$300,000

Supermarkets

$250,000

Grocery Stores

$200,000
$150,000
$100,000
$50,000
$0
FY 2003

FY 2004

FY 2005

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
3/1/2002
2/10/2002
1/1/2001

End Date
3/15/2002
3/20/2002
3/28/2002
4/12/2002

Budget
$10,000
$40,000
$5,000
$1,000
$56,000

Manager
Jill Forman
Jill Forman
John Wingate
John Wingate

Department
Production
Production
Sales
Sales

Page 9

The Pasta Tree

Chart: Milestones

Milestones

Production Facility Expansion

Production Equipment

In-Store Displays

Canal Run

Q1 `01

Q2

Q3

Q4

Q1 `02

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.

Page 10

The Pasta Tree

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

FY 2004

FY 2005

$36,000
$36,000
$81,600
$24,000
$21,600
8

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

$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

Page 11

The Pasta Tree

Chart: Break-even Analysis

Break-even Analysis
$20,000
$16,000
$12,000
$8,000
$4,000
$0
($4,000)
($8,000)
($12,000)
($16,000)
($20,000)
$0
$4,000

$8,000
$16,000
$24,000
$32,000
$40,000
$12,000
$20,000
$28,000
$36,000
$44,000

7.2 Projected Profit and Loss

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

Chart: Profit Monthly

Profit Monthly
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
($500)
($1,000)
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Page 12

The Pasta Tree

Chart: Profit Yearly

Profit Yearly

$30,000
$27,000
$24,000
$21,000
$18,000
$15,000
$12,000
$9,000
$6,000
$3,000
$0
FY 2003

FY 2004

FY 2005

Table: Profit and Loss

Pro Forma Profit and Loss

FY 2003

FY 2004

FY 2005

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

$313,000
$31,300
$0
$31,300

$346,000
$35,300
$0
$35,300

$419,000
$40,300
$0
$40,300

Gross Margin
Gross Margin %

$281,700
90.00%

$310,700
89.80%

$378,700
90.38%

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

$199,200
$6,000
$9,600
$0
$3,600
$9,600
$12,000
$29,880
$0

$215,136
$8,000
$9,600
$0
$12,000
$9,600
$12,000
$32,270
$0

$247,406
$10,000
$9,600
$0
$12,000
$9,600
$12,000
$37,111
$0

Total Operating Expenses

$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%

Expenses

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

Page 13

The Pasta Tree

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

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

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

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

$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

$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

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
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
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

Page 14

The Pasta Tree

Chart: Cash

Cash
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000

Net Cash Flow

$40,000

Cash Balance

$30,000
$20,000
$10,000

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

$0

Page 15

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

$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

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

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

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

FY 2003

FY 2004

FY 2005

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
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
Liabilities and Capital
Current Liabilities

Page 16

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

Industry Profile

56.50%

10.54%

21.10%

4.60%

Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

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%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

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%
1.92%
3.78%

100.00%
89.80%
88.08%
2.31%
3.50%

100.00%
90.38%
83.95%
2.39%
9.78%

100.00%
44.10%
26.70%
0.70%
0.80%

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

FY 2003

FY 2004

FY 2005

Net Profit Margin

Return on Equity

1.58%
4.48%

1.76%
5.22%

6.56%
19.09%

n.a
n.a

5.22
58
9.76
9.62
30
1.91

5.22
67
9.43
12.17
30
2.30

5.22
64
9.17
12.17
28
2.54

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

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

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 17

Appendix
Table: Sales Forecast

Sales Forecast
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Sales
Supermarkets
Grocery Stores
Total Sales
Direct Cost of Sales
Supermarkets

0%
0%

$9,000
$14,000
$23,000
Apr

$9,000
$14,000
$23,000
May

$10,000
$14,000
$24,000
Jun

$9,000
$15,000
$24,000
Jul

$10,000
$15,000
$25,000
Aug

$10,000
$15,000
$25,000
Sep

$10,000
$15,000
$25,000
Oct

$11,000
$16,000
$27,000
Nov

$12,000
$16,000
$28,000
Dec

$12,000
$16,000
$28,000
Jan

$13,000
$17,000
$30,000
Feb

$13,000
$18,000
$31,000
Mar

$900

$900

$1,000

$900

$1,000

$1,000

$1,000

$1,100

$1,200

$1,200

$1,300

$1,300

Grocery Stores

$1,400

$1,400

$1,400

$1,500

$1,500

$1,500

$1,500

$1,600

$1,600

$1,600

$1,700

$1,800

Subtotal Direct Cost of Sales

$2,300

$2,300

$2,400

$2,400

$2,500

$2,500

$2,500

$2,700

$2,800

$2,800

$3,000

$3,100

Page 1

Appendix
Table: Personnel

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

0%
0%
0%
0%
0%

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

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

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

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

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

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

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

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

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

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

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

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

$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

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

10

11

Mar
12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest
Rate
Tax Rate

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%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Other

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and

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

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

$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

$20,700

$21,600

$21,600

$22,500

$22,500

$22,500

$24,300

$25,200

$25,200

$27,000

$27,900

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

90.00%

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

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

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$800

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

$2,490
$0

Total Operating
Expenses

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

$22,490

Profit Before Interest and

Taxes
EBITDA

($1,790)

($1,790)

($890)

$10

$10

$10

$1,810

$2,710

$2,710

$4,510

$5,410

($990)

($990)

($90)

($90)

$810

$810

$810

$2,610

$3,510

$3,510

$5,310

$6,210

$345

$332

$402

$388

$458

$445

$432

$418

$405

$392

$378

$365

($641)

($636)

($388)

($383)

($135)

($131)

($127)

$418

$692

$696

$1,240

$1,514

($1,495)

($1,485)

$974

$1,614

$1,623

$2,892

$3,532

-6.50%

-6.46%

3.61%

5.76%

5.80%

9.64%

11.39%

Rent
Payroll Taxes
Other

Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

15%

($890)

($904)
-3.77%

($895)
-3.73%

($314)
-1.26%

($305)
-1.22%

($295)
-1.18%

Page 4

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

$5,750

$5,750

$6,000

$6,000

$6,250

$6,250

$6,250

$6,750

$7,000

$7,000

$7,500

$7,750

Cash from Receivables

$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
$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

Subtotal Cash from Operations

Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interestfree)
New Long-term Liabilities

0.00%

$30,000

$0

$10,000

$0

$10,000

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$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

Subtotal Cash Received

Expenditures

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Expenditures from Operations

Cash Spending

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

$16,600

Bill Payments

$10,160

$4,794

$4,850

$6,769

$7,512

$8,020

$7,904

$7,927

$8,854

$9,093

$9,009

$16,600
$9,936

Subtotal Spent on Operations

$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

$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

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$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

Subtotal Cash Spent

Page 5

Appendix
Net Cash Flow

$14,390

($9,669)

$10,200

($1,694)

Cash Balance

$84,390

$74,721

$84,921

$83,226

$8,538
$91,764

($1,945)

($1,104)

$89,819

$88,715

($627)
$88,088

($1,254)
$86,834

($18)
$86,816

$1,291

$664

$88,107

$88,771

Table: Balance Sheet

Pro Forma Balance Sheet

Assets

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

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

$84,390
$24,250
$5,700
$5,000
$119,340

$74,721
$33,925
$3,400
$5,000
$117,046

$84,921
$34,675
$2,640
$5,000
$127,236

$83,226
$35,400
$2,640
$5,000
$126,266

$91,764
$36,150
$2,750
$5,000
$135,664

$89,819
$36,875
$2,750
$5,000
$134,444

$88,715
$36,875
$2,750
$5,000
$133,340

$88,088
$38,375
$2,970
$5,000
$134,433

$86,834
$40,575
$3,080
$5,000
$135,489

$86,816
$41,300
$3,080
$5,000
$136,196

$88,107
$42,800
$3,300
$5,000
$139,207

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

$36,736
$5,248
$31,488
$128,488

$36,736
$6,048
$30,688
$150,028

$36,736
$6,848
$29,888
$146,934

$36,736
$7,648
$29,088
$156,324

$36,736
$8,448
$28,288
$154,554

$36,736
$9,248
$27,488
$163,152

$36,736
$10,048
$26,688
$161,132

$36,736
$10,848
$25,888
$159,228

$36,736
$11,648
$25,088
$159,521

$36,736
$12,448
$24,288
$159,777

$36,736
$13,248
$23,488
$159,684

$36,736
$14,048
$22,688
$161,895

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

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Starting
Balances

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

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

$4,635
$2,900
$0
$7,535

$4,626
$2,800
$0
$7,426

$6,519
$2,700
$0
$9,219

$7,245
$2,600
$0
$9,845

$7,756
$2,500
$0
$10,256

$7,641
$2,400
$0
$10,041

$7,632
$2,300
$0
$9,932

$8,551
$2,200
$0
$10,751

$8,793
$2,100
$0
$10,893

$8,678
$2,000
$0
$10,678

$9,597
$1,900
$0
$11,497

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

Long-term Liabilities
Total Liabilities

$10,000
$23,000

$38,500
$46,035

$37,000
$44,426

$45,500
$54,719

$44,000
$53,845

$52,500
$62,756

$51,000
$61,041

$49,500
$59,432

$48,000
$58,751

$46,500
$57,393

$45,000
$55,678

$43,500
$54,997

$42,000
$53,639

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

$0
$81,488
$24,000
$105,488
$128,488

$0
$105,488
($1,495)
$103,994
$150,028

$0
$105,488
($2,980)
$102,508
$146,934

$0
$105,488
($3,884)
$101,604
$156,324

$0
$105,488
($4,779)
$100,709
$154,554

$0
$105,488
($5,092)
$100,396
$163,152

$0
$105,488
($5,397)
$100,091
$161,132

$0
$105,488
($5,692)
$99,796
$159,228

$0
$105,488
($4,718)
$100,770
$159,521

$0
$105,488
($3,104)
$102,384
$159,777

$0
$105,488
($1,482)
$104,006
$159,684

$0
$105,488
$1,411
$106,899
$161,895

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

Net Worth

$105,488

$103,994

$102,508

$101,604

$100,709

$100,396

$100,091

$99,796

$100,770

$102,384

$104,006

$106,899

$110,430

Page 6