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Financial Assumptions
The following table highlights the important assumptions made in this section.
| Assumptions | |
| Recurrent ratios | |
| Average account receivable days | 30 |
| Average account payable days | 1 |
| Inventory days | 0 |
| % of sales in cash | 100% |
| % of purchases in cash | 100% |
| % of payroll for taxes & benefits | 20% |
| Short-term interest rate | 10 |
| Long-term interest rate | 10 |
| % tax rate, federal plus state | |
| Average COGS for website | 70% |
| Average COGS for EBAY | 85% |
| Costs of Sales | |||
| Year 1 | Year 2 | Year 3 | |
| Unit Sales (units): | |||
| website sales | 1,179 | 7,200 | 18,000 |
| ebay sales | 162 | 250 | 500 |
| Unit Prices ($): | |||
| website sales | 70.76 | 70.76 | 70.76 |
| ebay sales | 75.00 | 75.00 | 75.00 |
| Total Sales ($): | |||
| website sales | 83,426 | 509,472 | 1,273,680 |
| ebay sales | 12,150 | 18,750 | 37,500 |
| Total Sales ($) | 95,576 | 528,222 | 1,311,180 |
| Unit Cost ($): | |||
| website sales | 49.53 | 49.53 | 49.53 |
| ebay sales | 63.75 | 63.75 | 63.75 |
| Total Cost of Sales: | |||
| website sales | 58,398 | 356,630 | 891,576 |
| ebay sales | 10,328 | 15,938 | 31,875 |
| Total Cost of Sales | 68,726 | 372,568 | 923,451 |
Profit and Loss Table
Go Green Yoga Mats will make a profit after its first year of business. For these projections, we assume that rent will be constant for the first three years of the companiesexistence. The model is based on low sales expectations.
| Profit & Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales ($) | $95,576 | $528,222 | $1,311,180 |
| Cost of Sales | |||
| Material ($) | $68,726 | $372,568 | $923,451 |
| Labor ($) | $0 | $0 | $0 |
| Other ($) | $0 | ||
| Total Cost of Sales | $68,726 | $372,568 | $923,451 |
| Gross Profit ($) | $26,850 | $155,654 | $387,729 |
| Operating Expenses ($) | |||
| Marketing and Advertising Expenses | $0 | $0 | $0 |
| Sales and Marketing Payroll | $0 | $0 | $0 |
| Ads ($) | $1,200 | $3,600 | $6,000 |
| Catalog ($) | $0 | $0 | $0 |
| Mailing ($) | $0 | $0 | $0 |
| Promotional Material ($) | $600 | $1,800 | $3,000 |
| Shows ($) | $0 | $0 | $0 |
| PR ($) | $0 | $0 | $0 |
| Training ($) | $0 | $0 | $0 |
| Total Marketing and Advertising Expenses | $1,800 | $5,400 | $9,000 |
| General and Administrative Expenses | |||
| Administration Payroll | $0 | $0 | $0 |
| Rent ($) | $6,000 | $6,000 | $6,000 |
| Leased Equipment ($) | $0 | $0 | $0 |
| Utilities ($) | $0 | $0 | $0 |
| Telephone ($) | $60 | $1,200 | $1,200 |
| Insurance ($) | $0 | $0 | $0 |
| Supplies ($) | $600 | $750 | $1,000 |
| Travel ($) | $0 | $0 | $0 |
| Depreciation ($) | $0 | $0 | $0 |
| Amortization ($) | $0 | $0 | $0 |
| Miscellaneous ($) | $0 | $0 | $0 |
| Total General and Administrative Expenses | $6,660 | $7,950 | $8,200 |
| Other Expenses | |||
| Consultants ($) | $0 | $0 | $0 |
| Legal ($) | $0 | $0 | $0 |
| Credit Card Fees | $3,337 | $20,379 | $50,947 |
| Other Payroll | |||
| Total Other Expenses ($) | $3,337 | $20,379 | $50,947 |
| Total Expenses ($) | $11,797 | $33,729 | $68,147 |
| Profit ($) | $15,053 | $121,925 | $319,582 |
| Interest Exp. ST | $0 | $0 | $0 |
| Interest Exp. LT | $0 | $0 | $0 |
| Taxes ($) | $0 | $0 | $0 |
| Net profit ($) | $15,053 | $121,925 | $319,582 |
Cash Flow Table
Below is a chart and table of the company’s cash flow for the next three years.
| Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Beginning Cash | $0 | 15,053 | 136,978 |
| Cash In: | |||
| Net Profit | $15,053 | $121,925 | $319,582 |
| Depreciation & Amort. | $0 | $0 | $0 |
| Change in Accts Payable | $0 | $0 | $0 |
| Current Borrowing | $0 | $0 | $0 |
| Long-term Borrowing | $0 | $0 | $0 |
| Increase Other Liabilities | $0 | $0 | $0 |
| Capital Input | $0 | $0 | $0 |
| Total Cash In | 15,053 | 121,925 | 319,582 |
| Cash Out: | |||
| Change in A/R | $0 | $0 | $0 |
| Change in Inventory | $0 | $0 | $0 |
| Change Other ST Assets | $0 | $0 | $0 |
| Capital Expenditures | $0 | $0 | $0 |
| Loan Repayment (ST) | $0 | $0 | $0 |
| Loan Repayment (LT) | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Owner Withdrawal | $0 | $0 | $0 |
| Total Cash Out | $0 | $0 | $0 |
| Net Cash Flow | $15,053 | $121,925 | $319,582 |
| Cash Balance | $15,053 | $136,978 | $456,560 |
Balance Sheet
Below is the company’s projected balance sheet for the next three years.
| Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Current Assets | |||
| Cash | $15,053 | $136,978 | $456,560 |
| Accounts Receivable | $0 | $0 | $0 |
| Inventory | 72 | 207 | 513 |
| Deposits | $0 | $0 | $0 |
| Total Current Assets | $15,126 | $137,185 | $457,073 |
| Fixed Assets | |||
| Capital Assets | $0 | $0 | $0 |
| Less Accum Depre | $0 | $0 | $0 |
| Book Value | $0 | $0 | $0 |
| Other Assets | $0 | $0 | $0 |
| Total Assets | $15,126 | $137,185 | $457,073 |
| Current Liabilities | |||
| Accounts Payable | $0 | $0 | $0 |
| Short-term Notes | $0 | $0 | $0 |
| Other ST Liabilities | $0 | $0 | $0 |
| Total Current Liabilities | $0 | $0 | $0 |
| Long-term Liabilities | |||
| Total Liabilities | $0 | $0 | $0 |
| Beginning Capital | $0 | $0 | $0 |
| Profit (loss) | $15,053 | $136,978 | $456,560 |
| Owner’s Withdrawal | $0 | $0 | $0 |
| Capital – End of Period | $15,053 | $136,978 | $456,560 |
| Total Liab. & Equity | $15,053 | $136,978 | $456,560 |