Assumptions that will be used along with numbers in the picture:

The sales were estimated to be approximately $3.7 million in 2018. The assumption that labor costs would be reduced 6%, from 28% to 22%. CEs overall margin would increase by 2%, from 15% to 17%. All expense accounts should use the percentage of sales calculated from Fresh Mexican except that depreciation and amortization will increase to 5% of sales for CE and rent expense of $20 per square foot times 1,900 square feet. With the growth of Fresh Mexican and a loyal following of customers, the partners believed CE would also succeed since it was in the same vicinity as Fresh Mexican in Jacksonville.

Question:

Add a column that shows Clean Eating Pro Forma for 2018. Find the assumptions for the ProForma spreadsheet for Clean Eating (CE) within the case.

114 Entrepreneurship Education and Pedagogy (1) Exhibit 2. Fresh Mexican Financials. Fresh Mexican profit loss Actual 2017 Pro forma 2018 $4,204,008.29 1,269,967 2,849,604 $4,372,168.62 1,320,765 3,051,403 Sales Total cost of sales Gross profit Expenses Salaries and wages Occupancy expenses Operating expenses Marketing and public relations Utilities Administrative and general Repairs and maintenance Rent expense Owner expense Depreciation and amortization Total expenses Operating income (loss) Profit margin Square feet Revenue per square foot Profit margin per square foot 1,177,122 168,160 284,861 27,056 121,384 273,261 43,310 80,000 42,040 16,251 2,333,446 616,159 15% 4000 $1,051.00 $154.04 1,224,207 174,887 296,256 28,138 126,240 349,773 45,042 80,000 43,722 16,901 2,385,166 666,237 15% 4000 $1,093.04 $166.56