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Calculate the Cash Break Even Pro Forma Balance Sheet Assets Current Assets Cash $6,281 $24,923 $75,599 Accounts Receivable $48,486 $83,363 $91,699 Inventory $7,780 $7,251 $7,976
Calculate the Cash Break Even
| Pro Forma Balance Sheet | |||
| Assets | |||
| Current Assets | |||
| Cash | $6,281 | $24,923 | $75,599 |
| Accounts Receivable | $48,486 | $83,363 | $91,699 |
| Inventory | $7,780 | $7,251 | $7,976 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $62,547 | $115,537 | $175,274 |
| Long-term Assets | |||
| Long-term Assets | $62,160 | $62,160 | $62,160 |
| Accumulated Depreciation | $1,200 | $2,300 | $3,400 |
| Total Long-term Assets | $60,960 | $59,860 | $58,760 |
| Total Assets | $123,507 | $175,397 | $234,034 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $14,064 | $14,267 | $15,859 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $14,064 | $14,267 | $15,859 |
| Long-term Liabilities | $101,500 | $87,000 | $72,500 |
| Total Liabilities | $115,564 | $101,267 | $88,359 |
| Paid-in Capital | $10,000 | $10,000 | $10,000 |
| Retained Earnings | ($15,150) | ($2,057) | $64,130 |
| Earnings | $13,093 | $66,187 | $71,546 |
| Total Capital | $7,943 | $74,130 | $145,675 |
| Total Liabilities and Capital | $123,507 | $175,397 | $234,034 |
| Net Worth | $7,943 | $74,130 | $145,675 |
| Ratio Analysis | ||||
| Sales Growth | 0.00% | 71.93% | 10.00% | 8.66% |
| Percent of Total Assets | ||||
| Accounts Receivable | 39.26% | 47.53% | 39.18% | 30.00% |
| Inventory | 6.30% | 4.13% | 3.41% | 23.04% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 22.61% |
| Total Current Assets | 50.64% | 65.87% | 74.89% | 75.65% |
| Long-term Assets | 49.36% | 34.13% | 25.11% | 24.35% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 11.39% | 8.13% | 6.78% | 37.93% |
| Long-term Liabilities | 82.18% | 49.60% | 30.98% | 14.30% |
| Total Liabilities | 93.57% | 57.74% | 37.75% | 52.23% |
| Net Worth | 6.43% | 42.26% | 62.25% | 47.77% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 71.80% | 71.61% | 71.61% | 22.53% |
| Selling, General & Administrative Expenses | 26.12% | 0.00% | 0.00% | 5.73% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.36% |
| Profit Before Interest and Taxes | 14.20% | 32.85% | 31.89% | 2.95% |
| Main Ratios | ||||
| Current | 4.45 | 8.10 | 11.05 | 1.88 |
| Quick | 3.89 | 7.59 | 10.55 | 1.19 |
| Total Debt to Total Assets | 93.57% | 57.74% | 37.75% | 53.00% |
| Pre-tax Return on Net Worth | 235.49% | 127.55% | 70.16% | 4.52% |
| Pre-tax Return on Assets | 15.14% | 53.91% | 43.67% | 9.61% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 7.38% | 21.70% | 21.32% | n.a |
| Return on Equity | 164.84% | 89.29% | 49.11% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 3.66 | 3.66 | 3.66 | n.a |
| Collection Days | 56 | 79 | 95 | n.a |
| Inventory Turnover | 4.31 | 11.52 | 12.51 | n.a |
| Accounts Payable Turnover | 6.18 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 30 | 28 | n.a |
| Total Asset Turnover | 1.44 | 1.74 | 1.43 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 14.55 | 1.37 | 0.61 | n.a |
| Current Liab. to Liab. | 0.12 | 0.14 | 0.18 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $48,483 | $101,270 | $159,416 | n.a |
| Interest Coverage | 3.88 | 17.72 | 22.36 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.70 | 0.57 | 0.70 | n.a |
| Current Debt/Total Assets | 11% | 8% | 7% | n.a |
| Acid Test | 0.45 | 1.75 | 4.77 | n.a |
| Sales/Net Worth | 22.34 | 4.12 | 2.30 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
| Pro Forma Cash Flow | |||
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $0 | $0 | $0 |
| Cash from Receivables | $128,939 | $270,176 | $327,221 |
| Subtotal Cash from Operations | $128,939 | $270,176 | $327,221 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| Subtotal Cash Received | $128,939 | $270,176 | $327,221 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $58,819 | $63,654 | $70,689 |
| Bill Payments | $72,830 | $173,380 | $191,356 |
| Subtotal Spent on Operations | $131,649 | $237,034 | $262,045 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $14,500 | $14,500 | $14,500 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $146,149 | $251,534 | $276,545 |
| Net Cash Flow | ($17,209) | $18,642 | $50,676 |
| Cash Balance | $6,281 | $24,923 | $75,599 |
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
