The business plan provides the Day Spa financial plan, which comprises of pro-formal balance sheet, statements of income and the company budget. The company total assets will be $266,779 at the end of the 2013 fiscal year, and the total liabilities will be $107,790. At the end of 2013 fiscal year, the company net worth will be $346,504
Day Spa Business Plan
My Business Venture is the Day Spa and my financial plan is to initiate, maintain, and improve the factors that will increase and stabilize my cash flow. My business will implement effective cost management to increase the business net worth in the first year and in the foreseeable future. The paper presents the pro-formal balance sheet based on some important assumptions.
My financial plan depends on some important assumptions listed as follows:
The plan assumes that the U.S. economy will continue to improve and the economy will not slide back into a major recession.
It is also assumed that the tax rates and interest rates will be based on the conservative rate.
The current average interest rate will be 6% and the long-term interest rate will be 5.25%.
It is also assumed that the tax rate will be 34%
The venture will achieve a success by recording sales growth.
It is also assumed that through the marketing strategy, the company will record higher sales. (Dul, & Hak 2008).
The Table 1 provides general assumption by which my Day Spa Business Venture is based.
Table 1: General Assumptions
Year 1
Year 2
Year 3
Year 4
Year 5
Plan Month
Current Interest Rate
6.00%
6.00%
6.00%
6.00%
6.00%
Long-term Interest Rate
5.25%
5.25%
5.25%
5.25%
5.25%
Tax Rate
34%
34%
34%
34%
34%
Other
0
0
0
0
0
The paper provides the monthly pro-formal balance sheet to present the Day Spa's total assets, total liabilities and the net worth.
1.2: Day Spa's Monthly Pro-forma Balance Sheet
The company total assets are $266,779 at the end of 2013 fiscal year, and since my company will be a newly formed company, there will be no long-term assets and the current assets will compose of the overall total assets. The current assets will be:
Cash,
Accounts Receivable,
Inventory, and Other Current Assets.
The overall current assets will be $266,779. The company liabilities are the obligation that the company will need to settle. The company current liabilities are accounts payable and current borrowing. The overall current liabilities will be $107,790. Similarly, the company does not have long-term liabilities at present, and the company total capital is $152,334, which is equivalent to the company's net worth.
The data in the statements of income reveals that the company net sales is $845,590 at the end of 2013 fiscal year, and the costs of goods sold are $318,343, making the company to record gross profits of $527,249. The company total operating expenses are $167,216. Based on the company gross profits minus the operating expenses and taxation, the company net income for 2013 fiscal year will be $346,504 revealing that my business venture will be a viable business.
The company budget is also presented in Table 3 and the budget is prepared based on the following assumption:
The U.S. economy will not slide back into a major recession, and the economy will continue to improve.
The company will continue record a higher sales growth. (Finch, 2007).
At the end of the fiscal year 2014, the company will record total revenue of $1.16 Million from the actual budget, and the company operating income will be $88,500. Using equity approach to value my business, my business valuation is $1,211,221 based on the company total assets, total liabilities, and total revenue and operating profits.( Palepu, Healy, Bernard, 2004).
Table 1: Day Spa's Pro-forma Balance Sheet (U.S. $)
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
March
April
May
YTD 2013
ASSETS
Cash
15589
15600
16500
17600
17900
18200
18600
19200
19800
20500
21300
21450
222239
Accounts Receivable
10157
Inventory
55
64
71
78
Other Current Assets
32958
Total Current Assets
17848
18030
19064
20754
21627
22014
22745
23407
24159
24957
25880
26294
266779
Long-term Assets
0
0
0
0
0
0
0
0
0
0
0
0
0
Accumulated Depreciation
0
0
0
0
0
0
0
0
0
0
0
0
0
Total Long-term Assets
0
0
0
0
0
0
0
0
0
0
0
0
0
Total Assets
17848
18030
19064
20754
21627
22014
22745
23407
24159
24957
25880
26294
266779
Liabilities and Capital
Accounts Payable
81076
Current Borrowing
2054
26714
Other Current Liabilities
0
0
0
0
0
0
0
0
0
0
0
0
Subtotal Current Liabilities
10083
10512
11556
12523
107790
Long-term Liabilities
0
0
0
0
0
0
0
0
0
0
0
0
0
Total Liabilities
10083
10512
11556
12523
107790
Paid-in Capital
10451
10957
12578
12687
12785
12895
13012
129553
Retained Earnings
-5156
-5245
-5365
-5756
-5989
-6125
-6325
-6458
-6985
-7258
-7985
-8456
-77103
Earnings
10458
11879
12785
108794
Total Capital
10158
11589
12548
13585
14587
14895
15478
15878
15895
152334
Total Liabilities and Capital
14662
16116
17030
17701
19657
21080
22828
24230
24978
25990
27434
28418
260124
Net Worth
10158
11589
12548
13585
14587
14895
15478
15878
15895
152334
Table 2: Day Spa's Comprehensive Statement of Income (U.S.$)
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
March
April
May
YTD 2013
Revenue
Sales ($000)
49. 15
51. 50
52.13
53. 88
57. 77
60. 81
65. 00
70. 35
71. 87
74. 56
77. 45
81. 52
Sales Discounts
5 000
5 250
5 513
5 788
6 078
6 381
6 700
7 036
7 387
7 757
8 144
8 552
79 586
Net Sales ($000)
54. 15
56 .75
57. 63
59. 66
63. 85
67. 19
71. 71
77. 39
79. 26
82. 32
85. 58
90. 07
Cost of Goods Sold
20 000
21 000
22 050
23 153
24 310
25 526
26 802
28 142
29 549
31 027
32 578
34 207
Gross Profit
34 150
35 750
35 588
36 517
39 543
41 670
44 903
49 249
49 711
51 296
53 011
55 862
Operating Expenses
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