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Financials for Business Plan INGENIOUS


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Here we are projecting:
10.1 Important Assumptions
10.2 Break-even Analysis
10.3 Profit and Loss
10.4 Cash Flow
10.5 Balance Sheet
10.6 Business Ratio

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Financials for Business Plan INGENIOUS

  1. 1. INGENIOUS Data, Information, Knowledge to Wisdom… INGINEOUS is a self-sustaining and profit 10 Making organization, which strives to Become a light house to masses and Other organization’s. Thus, model once Propelled will generate fuel for itself. financials Here we are projecting: 10.1 Important Assumptions 10.2 Break-even Analysis 10.3 Profit and Loss 10.4 Cash Flow 10.5 Balance Sheet 10.6 Business Ratios 10.1 important assumptions 59
  2. 2. INGENIOUS Data, Information, Knowledge to Wisdom… Table10.1: summarize key financial assumptions, including 45- day average collection days, sales entirely on invoice basis, expenses mainly on net 30 basis, 35 days on average for payment of invoices, and present- day interest rates. Table10.1: General Assumptions General Assumptions 2005-06 2006-07 2007-08 Current Interest Rate 8% 8% 8% Long term Interest 10% 10% 10% Rate Tax Rate 25% 25% 25% Sales on credit 100% 100% 100% Others 0.00% 0.00% 0.00% Calculated Total Payroll Expenses Rs.28,60,000 Rs.93,60,000 Rs.1,60,70,400 Sales on Credit Rs.3,58,25,000 Rs.39,90,00,000 Rs.199,50,00,000 Account Payable Rs.1,15,57,000 Rs.11,27,57,400 Rs.52,46,85,000 10.2 break-even analysis This break-even is a reflection our first year, in which we are building our fulfillment based on minimum fixed cost and maximum possible variable cost. The risk profile should look very different by the last year. Break-even Analysis Rs.760844 Rs.507229 Rs.253615 Rs.0 (Rs.253615) (Rs.507229) (Rs.760844) Rs.000000 Rs.362231 Rs.724461 Rs.1086692 Rs.1448923 Rs.1811153 Rs.2173384 Table 10.2: Break-even Analysis Break-even Analysis Monthly Units Break-even 10,867 Monthly Sales Break-even Rs10,86,692 Assumptions: Average Per-Unit Revenue Rs.100 Average Per-Unit Variable Cost Rs.30 Estimated Monthly Fixed Cost Rs.7,60,844 Break-even point= where line intersects with zero 60
  3. 3. INGENIOUS Data, Information, Knowledge to Wisdom… 10.3 projected profit and loss The detailed monthly pro-forma income statement for the first year is included in the appendix. The annual estimates are included here. Table 10.3: Profit and Loss Pro Forma P & L 2005-06 2006-07 2007-08 Sales Rs.3,58,25,000 Rs.39,90,00,000 Rs.199,50,00,000 -------------------- --------------------- ----------------------- Total Cost of Sales Rs.99,84,428 Rs.6,37,36,000 Rs.23,42,13,000 Gross Margin Rs.2,58,40,572 Rs.33,52,64,000 Rs.176,07,87,000 Gross Margin % 72.13% 84.02% 88.26% Expenses: Payroll Rs.28,60,000 Rs.93,60,000 Rs.1,60,70,400 Marketing Cost Rs.30,55,873 Rs.4,90,21,400 Rs.29,04,72,000 Leased Equipments Rs.10,00,000 Rs.5,00,00,000 Rs.10,00,00,000 Utilities Rs.30,00,000 Rs.4,00,00,000 Rs.10,00,00,000 Insurance Rs.1,00,000 Rs.20,00,000 Rs.1,00,00,000 Rent Rs.13,20,000 Rs.2,60,00,000 Rs.5,20,00,000 Other Rs.20,00,000 Rs.1,00,00,000 Rs.2,00,00,000 Bank Interest Rs.3,00,000 Rs.1,00,00,000 Rs.5,00,00,000 Payroll Tax (8%) Rs.2,28,800 Rs.7,48,800 Rs.12,85,632 --------------------- --------------------- ---------------------- Total Operating Exp. Rs.1,38,64,673 Rs.19,71,30,200 Rs.63,98,28,032 Interest on Investment Rs.5,20,000 Rs.5,20,000 Rs.5,20,000 Profit after Interest Rs.1,14,55,899 Rs.19,66,10,200 Rs.112,04,38,968 Tax Incurred (25%) Rs.28,63,975 Rs.4,91,52,550 Rs.28,01,09,742 Net Profit (PAT) Rs.85,91,924 Rs.14,74,57,650 Rs.84,03,29,226 Net Profit/Sales 23.98% 36.96% 42.12% 10.4 projected cash flow Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the monthly balance. The annual cash flow figures are included here as table 10.4. Detailed monthly numbers are included in the appendix 61
  4. 4. INGENIOUS Data, Information, Knowledge to Wisdom… Cash 120 100 80 Lacs 60 40 20 0 -20 -40 Oct Nov Dec Jan Feb Mar Apr May Jun Jly Aug Sept Net Cash Flow Cash Balance Table 10.4: Cash Flow Pro Forma Cash Flow 2005-06 2006-07 2007-08 Cash Received Cash from Operations: Cash Sales Rs.0 Rs.0 Rs.0 Cash from Receivables Rs.3,58,25,000 Rs.39,90,00,000 Rs.199,50,00,000 Subtotal Rs.3,58,25,000 Rs.39,90,00,000 Rs.199,50,00,000 Additional Cash Rcvd. Non Operating Income Rs.0 Rs.0 Rs.0 Tax Refund Rs.0 Rs.0 Rs.0 New Current Borrowing Rs.0 Rs.10,00,00,000 Rs.50,00,00,000 New Other Liabilities Rs.0 Rs.0 Rs.0 Long Term Liabilities Rs.70,00,000 Rs.0 Rs.0 New Investment Rs.0 Rs.0 Rs.0 Sub Total Rs.4,28,25,000 Rs.49,90,00,000 Rs.249,50,00,000 62
  5. 5. INGENIOUS Data, Information, Knowledge to Wisdom… Expenditure 2005-06 2006-07 2007-08 Expd. From Operations: Cash Spending Rs.73,08,801 Rs.8,94,07,400 Rs.34,53,56,032 Payment of Account Rs.1,56,65,300 Rs.11,27,57,400 Rs.52,46,85,000 Payable Sub Total Rs.2,19,74,101 Rs.20,21,64,800 Rs.87,00,41,032 Additional Cash Spent Non Operating Exp. Rs.27,75,000 Rs.0 Rs.0 Tax Paid Out Rs.28,63,975 Rs.4,91,52,550 Rs.28,01,09,742 Principal Repayment Rs.0 Rs.0 Rs.0 Interest on Investment Rs.5,20,000 Rs.5,20,000 Rs.5,20,000 Purchase Current Assets Rs.30,00,000 Rs.1,00,00,000 Rs.5,00,00,000 Purchase Long Term Assets Rs.42,95,000 Rs.20,97,48,728 Rs.122,29,33,459 Dividend Rs.0 Rs.0 Rs.0 Sub Total Rs.3,64,28,076 Rs.47,15,86,078 Rs.242,36,04,233 Net Cash Flow Rs.67,96,924 Rs,2,74,13,922 Rs.7,13,95,767 Cash Balance Rs.78,96,924 Rs.3,53,10,846 Rs.10,67,06,613 10.5 projected balance sheet The balance sheet shows healthy growth of net worth, and strong financial position. Table 10.5: Balance Sheet Pro Forma Bal. Sheet 2005-06 2006-07 2007-08 Current Assets Cash Rs.78,96,924 Rs.3,53,10,846 Rs.10,67,06,613 Other Current Assets Rs.30,00,000 Rs.1,00,00,000 Rs.5,00,00,000 Long Term Assets Long Term Assets Rs.10,00,000 Rs.16,40,43,728 Rs.46,42,08,118 Preliminary Expd. Rs.27,75,000 Rs.0 Rs.0 IT H/W and S/W Rs.32,95,000 Rs.5,00,00,000 Rs.75,87,25,341 Total Assets Rs.1,79,66,924 Rs.25,93,54,574 Rs.137,96,40,072 Liabilities and Capital Account Payable Rs.23,75,000 Rs.78,96,924 Rs.3,53,10,846 Investor1(13% Interest) Rs.20,00,000 Rs.20,00,000 Rs.20,00,000 Investor2(13% Interest) Rs.20,00,000 Rs.20,00,000 Rs.20,00,000 Bank Loan (10% Int.) Rs.30,00,000 Rs.10,00,00,000 Rs.50,00,00,000 Profit & Loss Rs.85,91,924 Rs.14,74,57,650 Rs.84,03,29,226 Total Liabilities & Capital Rs.1,79,66,924 Rs.25,93,54,574 Rs.137,96,40,072 Paid-in Capital Rs.70,00,000 Rs.70,00,000 Rs.70,00,000 Retained Earnings (27,75,000) Rs.58,16,924 Rs.15,32,74,574 Earnings Rs.85,91,924 Rs.14,74,57,650 Rs.75,87,25,341 Net Worth Rs.1,28,16,924 RS.16,02,74,574 Rs.91,89,99,915 63
  6. 6. INGENIOUS Data, Information, Knowledge to Wisdom… 10.6 business ratios The following Table shows the projected business ratios. We expect to maintain healthy ratios for profitability, risk and return. Table 10.6: Ratios Ratio Analysis 2005-06 2006-07 2007-08 Sales Growth 0.00% 1013.75% 400% Percent of Total Assets A/c Receivable 44% 13.16% 7.73% Inventory 0.00% 0.00% 0.00% Other Current Assets 16.70% 3.86% 3.62% Total Current Assets 60.65% 17.47% 10.87% Long- Term Assets 23.91% 82.53% 88.64% Total Assets 100% 100% 100% Current Liabilities 0.00% 0.00% 0.00% Long-Term Liabilities 38.96% 40.1% 36.53% Total Liabilities 52.17% 43.14% 39.09% Net Worth 47.83% 56.86% 60.91% Percent of Sales Sales 100% 100% 100% Gross Profit Ratio 72.13% 84.02% 88.26% Operating Ratio 66.6% 65.4% 43.81% Profit before Interest and Tax 33.43% 34.62% 56.19% Main Ratio Fixed Assets Ratio 1.63 0.49 0.63 Current 4.59 5.74 4.44 Quick 3.33 4.47 3.02 Solvency Ratio 2,43 2.40 2.58 Liquidity Ratio 3.33 4.47 3.02 Business Vitality Ratio Sales per Employee Rs.17,91,250 Rs.73,88,889 Rs.2,52,53,165 Additional Ratio Net Profit Margin 23.98% 36.96% 42.12% Return on Equity Return on Total Resources 63.76% 75.81% 81.21% Total Capital Turnover 1.99 Times 1.54 Times 1.45 Times Business Vitality Ratio Sales per Employee Rs.17,91,250 Rs.73,88,889 Rs.25,23,165 Additional Ratios Net Profit Margin 23.98% 36.96% 42.12% Return on Equity 67% 92% 82.55% Activity Ratios Accounts Receivable Turnover 00 00 00 Inventory Turnover 00 00 00 Account Payable Turnover 4.24 28.37 36.05 Debt Ratios Debt to Net Worth 2.49 1.62 2 Current Liab. To Liab. 0.25 0.07 0.07 Additional Ratios Net Working Capital Rs.85,21,924 Rs.3,74,13,922 Rs.12,13,95,767 Assets to Sales .5 .65 .69 Current Debt /Total Assets 13.21 41.60 38.80 Acid Test 3.32 4.47 3.02 Sales/Net Worth 2.8 2.5 2.3 Dividend Payout 0.00 0.00 0.00 64