Maternity Clothing Online Business Plan

Expecting U.com

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Financial Plan

8.0 Financial Plan

ExpectingU.com projects the gross margin to be healthy percent. Sales projections for FY2006 are at over £1 million. A monthly breakdown of the cash-flow analysis, balance sheet, business ratio, break-even analysis, and other financial details are shown in the appendix. Annual projections will be highlighted in the following sub-topics.

8.1 Start-up Funding

The company owner, Mary Lenton, will use personal funds to finance the start of this business. Since a home office is already established and there is a large area in the basement available for stock storage, the primary start-up costs are associated with website store design, starting stock, and licensing approval.

Start-up Funding

Start-up Funding
Start-up Expenses to Fund	£23,750
Start-up Assets to Fund	£40,000
Total Funding Required	£63,750
Assets
Non-cash Assets from Start-up	£35,000
Cash Requirements from Start-up	£5,000
Additional Cash Raised	£0
Cash Balance on Starting Date	£5,000
Total Assets	£40,000
Liabilities and Capital
Liabilities
Current Borrowing	£0
Fixed liabilities	£0
Accounts Payable (Outstanding Bills)	£0
Other Current Liabilities (interest-free)	£0
Total Liabilities	£0
Capital
Planned Investment
Owner	£63,750
Investor	£0
Additional Investment Requirement	£0
Total Planned Investment	£63,750
Loss at Start-up (Start-up Expenses)	(£23,750)
Total Capital	£40,000
Total Capital and Liabilities	£40,000
Total Funding	£63,750

8.2 Break-even Analysis

Break-even Analysis

Break-even Analysis
Monthly Units Break-even	1,136
Monthly Revenue Break-even	£34,078
Assumptions:
Average Per-Unit Revenue	£29.99
Average Per-Unit Variable Cost	£7.50
Estimated Monthly Fixed Cost	£25,558

Break-even Analysis



8.3 Projected Profit and Loss

The following table and charts show the projected profit and loss. Monthly projections are included in the appendix.

Profit and Loss

Pro Forma Profit and Loss
	FY 2006	FY 2007	FY 2008
Sales	£1,094,635	£1,149,367	£1,206,835
Direct Costs of Goods	£273,659	£287,342	£301,709
Other Costs of Goods	£60,000	£6,000	£7,000
	------------	------------	------------
Cost of Goods Sold	£333,659	£293,342	£308,709
Gross Margin	£760,976	£856,025	£898,126
Gross Margin %	69.52%	74.48%	74.42%
Expenses
Payroll	£58,000	£86,000	£95,000
Marketing/Promotion	£180,000	£189,000	£198,450
Depreciation	£0	£0	£0
Web Design and Maintenance	£36,000	£39,600	£43,560
Payroll Taxes (National Insurance)	£8,700	£12,900	£14,250
Other	£24,000	£0	£0
	------------	------------	------------
Total Operating Expenses	£306,700	£327,500	£351,260
Profit Before Interest and Taxes	£454,276	£528,525	£546,866
EBITDA	£454,276	£528,525	£546,866
Interest Expense	£0	£0	£0
Taxes Incurred	£136,283	£158,558	£164,060
Net Profit	£317,993	£369,968	£382,806
Net Profit/Sales	29.05%	32.19%	31.72%

Profit Monthly



Profit Yearly



Gross Margin Monthly



Gross Margin Yearly



8.4 Projected Cash Flow

The monthly cash flow is shown in the illustration, with one bar representing cash flow per month and the other representing the monthly balance. The annual cash flow figures are included in the following table.

Cash Flow

Pro Forma Cash Flow
	FY 2006	FY 2007	FY 2008
Cash Received
Cash from Operations
Cash Sales	£1,094,635	£1,149,367	£1,206,835
Subtotal Cash from Operations	£1,094,635	£1,149,367	£1,206,835
Additional Cash Received
VAT, VAT, HST/GST Received	£0	£0	£0
New Current Borrowing	£0	£0	£0
New Other Liabilities (interest-free)	£0	£0	£0
New Fixed liabilities	£0	£0	£0
Sales of Other Current Assets	£0	£0	£0
Sales of Fixed assets	£0	£0	£0
New Investment Received	£0	£0	£0
Subtotal Cash Received	£1,094,635	£1,149,367	£1,206,835
Expenditures	FY 2006	FY 2007	FY 2008
Expenditures from Operations
Cash Spending	£58,000	£86,000	£95,000
Bill Payments	£652,232	£691,342	£727,276
Subtotal Spent on Operations	£710,232	£777,342	£822,276
Additional Cash Spent
VAT, VAT, HST/GST Paid Out	£0	£0	£0
Principal Repayment of Current Borrowing	£0	£0	£0
Other Liabilities Principal Repayment	£0	£0	£0
Fixed liabilities Principal Repayment	£0	£0	£0
Purchase Other Current Assets	£0	£0	£0
Purchase Fixed assets	£0	£0	£0
Dividends	£0	£0	£0
Subtotal Cash Spent	£710,232	£777,342	£822,276
Net Cash Flow	£384,403	£372,025	£384,559
Cash Balance	£389,403	£761,428	£1,145,987

Cash



8.5 Projected Balance Sheet

Balance Sheet

Pro Forma Balance Sheet
	FY 2006	FY 2007	FY 2008
Assets
Current Assets
Cash	£389,403	£761,428	£1,145,987
Stock	£22,493	£23,617	£24,798
Other Current Assets	£0	£0	£0
Total Current Assets	£411,895	£785,045	£1,170,785
Fixed assets
Fixed assets	£0	£0	£0
Accumulated Depreciation	£0	£0	£0
Total Fixed assets	£0	£0	£0
Total Assets	£411,895	£785,045	£1,170,785
Liabilities and Capital	FY 2006	FY 2007	FY 2008
Current Liabilities
Accounts Payable	£53,902	£57,084	£60,017
Current Borrowing	£0	£0	£0
Other Current Liabilities	£0	£0	£0
Subtotal Current Liabilities	£53,902	£57,084	£60,017
Fixed liabilities	£0	£0	£0
Total Liabilities	£53,902	£57,084	£60,017
Paid-in Capital	£63,750	£63,750	£63,750
Retained Earnings	(£23,750)	£294,243	£664,211
Earnings	£317,993	£369,968	£382,806
Total Capital	£357,993	£727,961	£1,110,767
Total Liabilities and Capital	£411,895	£785,045	£1,170,785
Net Worth	£357,993	£727,961	£1,110,767

8.6 Business Ratios

The following table shows the projected business ratios. We expect to maintain healthy ratios for profitability, risk, and return. Industry profile ratios based on the Standard Industrial Classification (SIC) of the Maternity Wear industry.

Ratios

Ratio Analysis
	FY 2006	FY 2007	FY 2008	Industry Profile
Sales Growth	0.00%	5.00%	5.00%	-17.40%
Percent of Total Assets
Stock	5.46%	3.01%	2.12%	38.82%
Other Current Assets	0.00%	0.00%	0.00%	28.73%
Total Current Assets	100.00%	100.00%	100.00%	90.64%
Fixed assets	0.00%	0.00%	0.00%	9.36%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	13.09%	7.27%	5.13%	24.75%
Fixed liabilities	0.00%	0.00%	0.00%	5.78%
Total Liabilities	13.09%	7.27%	5.13%	30.53%
Net Worth	86.91%	92.73%	94.87%	69.47%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	69.52%	74.48%	74.42%	24.54%
Selling, General & Administrative Expenses	40.47%	42.29%	42.70%	13.39%
Advertising Expenses	0.00%	0.00%	0.00%	0.79%
Profit Before Interest and Taxes	41.50%	45.98%	45.31%	1.00%
Main Ratios
Current	7.64	13.75	19.51	3.27
Quick	7.22	13.34	19.09	1.38
Total Debt to Total Assets	13.09%	7.27%	5.13%	34.77%
Pre-tax Return on Net Worth	126.90%	72.60%	49.23%	2.50%
Pre-tax Return on Assets	110.29%	67.32%	46.71%	3.83%
Additional Ratios	FY 2006	FY 2007	FY 2008
Net Profit Margin	29.05%	32.19%	31.72%	n.a
Return on Equity	88.83%	50.82%	34.46%	n.a
Activity Ratios
Stock Turnover	10.99	12.46	12.46	n.a
Accounts Payable Turnover	13.10	12.17	12.17	n.a
Payment Days	27	29	29	n.a
Total Asset Turnover	2.66	1.46	1.03	n.a
Debt Ratios
Debt to Net Worth	0.15	0.08	0.05	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a
Liquidity Ratios
Net Working Capital	£357,993	£727,961	£1,110,767	n.a
Interest Coverage	0.00	0.00	0.00	n.a
Additional Ratios
Assets to Sales	0.38	0.68	0.97	n.a
Current Debt/Total Assets	13%	7%	5%	n.a
Acid Test	7.22	13.34	19.09	n.a
Sales/Net Worth	3.06	1.58	1.09	n.a
Dividend Payout	0.00	0.00	0.00	n.a