Sample Moose Mountain Cafe Business Plan Page 18
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28Financial Diagnostics
This sheet performs a few tests on your numbers to see if they seem within certain reasonable ranges.
Remember, no computer can tell whether your projections are truly well-constructed, only a human can do that.
But these tests can at least look for values that are critically out of range.
Test Condition
Value
Findings:
General Financing Assumptions:
Owner's Injection into the Business
$
10,000.00
Owner's Injection is adequate
Cash Request as Percent of Total Required Funds
5.00%
Cash request seems reasonable with total request
Loan Assumptions:
Commercial Loan Interest Rate
11.00%
Interest rate seems reasonable
Commercial Loan Term in Months
60
Loan term seems within range for this type of loan
Commercial Mortgage Interest Rate
9.00%
Interest rate seems reasonable
Commercial Mortgage Term in Months
240
Loan term seems within range for this type of loan
Loan Payments as a Percent of Projected Sales
4.33%
Calculated loan payments as a percent of sales seem resonable
Income Statement:
Gross Margin as a Percent of Sales
62.79%
Gross margin percentage seems reasonable
Owner's Compensation Lower Limit Check
$
34,500.00
An owner's compensation amount has been established
Owner's Compensation Upper Limit Check
1513.30%
Owner's compensation may be too high relative to profitability of business
Advertising Expense Levels as a Percent of Sales
1.22%
Advertising as a percent of sales may be too low
Profitability Levels
$
2,280
The business is showing a profit
Profitability as a Percent of Sales
1.26%
The projection does not seem highly unreasonable
Cash Flow Statement
Desired Operating Cash Flow Levels
$
-
The financial projection provides the desired level of cash flow
Line of Credit Drawdowns
$
-
The business doesn't seem to require a line of credit
Accounts Receivable Ratio to Sales
0.00%
Accounts receivable amount as a percent of sales seems reasonable
Balance Sheet Statement
Does the Base Period Balance Sheet Balance?
-
The balance sheet does balance
Does the Final Balance Sheet Balance?
-
The balance sheet does balance
Debt to Equity Ratios
2.06
The debt to equity ratio seems reasonable
Break-Even Analysis Statement
Break-Even Levels
$
3,631
The sales projection exceeds the projected break-even sales level
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