6.

0 Financial Plan
This financial plan projects financials for ULIBAMBE ENTERPRISE over the course of the
next three years, incorporating R___________ sought in investments. The plan shows
how those investments will positively affect cash flow and balances and will allow
ULIBAMBE to expand our services, both in the way of our inventory and in mobilizing our
service. The plan shows that R_______ is required in monthly revenue in order to break
even. The Profit and Loss table shows a steady gross margin, significant spending on
personnel and inventory in the second year, and a substantial increase in net profit in
the third year.

6.1Break-even Analysis
Table: Break-even Analysis
The Calculation
The break-even figure is calculated by using three figures:

Gross Profit Percentage: Your gross profit percentage is calculated by taking your gross profit
(sales minus cost of sales) divided by your sales. Let’s say you sell a product for R200 and the
cost of that product is R150, then your gross profit will be R50. Your gross profit percentage
therefore is 25 per cent (gross profit (R50) divided by sales (R200)).
Overheads: Overheads are the total of all your fixed expenses each month. Examples include rent,
salaries, Internet, fuel and all other costs that you need to pay, e.g. R100000.00.
Profit Target: This is the profit you would like to achieve in a month, e.g. R20 000.00.
Now that we have these three figures, we can calculate our break-even amount:

Break-even = (overheads + profit target) divided by gross profit percentage

So, continuing the above example:

Break-even = (R100k + R20k) / 25% = R480 000.00

This means that you must make sales of R480 000.00 per month to cover all your
 6.2
Projected Cash Flow
As is shown in the Cash Flow table, the second year of business will contain significant
spending on personnel and inventory, which will result in negative cash flow but NOT a
negative cash balance. The following year will show a positive cash balance, as the
business will have acclimated to its paradigm shift. At no point will there be a negative
cash balance. Sales revenue will increase substantially between the first and second
years. R_____________ will be spent on the purchase of new assets, primarily a service
truck and large tires for specialty vehicles. The remaining R___________ in funding
sought will be managed as a reserve fund for unforeseen expenses and possibly for
personnel.

Table: Cash Flow

Pro Forma Cash Flow
2024 2025 2026
Cash Received
Cash from Operations
Cash Sales $198,966 $241,122 $263,997
Subtotal Cash from Operations $198,966 $241,122 $263,997

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest- $0 $0 $0
free)
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 $250,000 $0 $0
Subtotal Cash Received $448,966 $241,122 $263,997

Expenditures 2010 2011 2012

Expenditures from Operations

 Cash Spending $45,312 $91,315 $94,528
Bill Payments $51,831 $171,164 $139,658
Subtotal Spent on Operations $97,143 $262,479 $234,186

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current $0 $0 $0
Borrowing
Other Liabilities Principal $0 $0 $0
Repayment
Long-term Liabilities Principal $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $200,000 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $297,143 $262,479 $234,186

Net Cash Flow $151,823 ($21,357) $29,811

Cash Balance $154,823 $133,466 $163,277
6.3 Projected Profit and Loss
The profit and loss table shows the projected sales, expenses, and net profit for the
following three years. Gross margins are steady as sales increase. Net profit in the plans
third year will exceed both the first and second years. The expense of payroll is expected
to increase significantly between 2025 and 2026 due to new jobs being created.
Table: Profit and Loss

Pro Forma Profit and Loss

2024 2025 2026
Sales $198,966 $241,122 $263,997
Direct Cost of Sales $70,955 $85,947 $93,118
Other Costs of Sales $0 $0 $0
Total Cost of Sales $70,955 $85,947 $93,118

Gross Margin $128,011 $155,175 $170,879

Gross Margin % 64.34% 64.36% 64.73%

Expenses
Payroll $45,312 $91,315 $94,528
Marketing/Promotion $1,593 $1,750 $2,000
Depreciation $1,200 $2,000 $2,500
Car and Truck Expenses $1,200 $1,500 $2,000
Insurance (other than health) $3,000 $5,000 $5,000
Interest - mortgage (paid to $4,800 $4,800 $4,800
banks, etc.)
Legal and Professional Services $3,000 $3,500 $3,500
Office Expenses $360 $400 $450
Supplies $180 $250 $300
Utilities $21,000 $2,400 $2,700
Misc. $3,960 $4,100 $4,100

Total Operating Expenses $85,605 $117,015 $121,878

Profit Before Interest and $42,406 $38,160 $49,001
Taxes
EBITDA $43,606 $40,160 $51,501
Interest Expense $8,000 $8,000 $8,000
Taxes Incurred $10,322 $9,048 $12,300

Net Profit $24,084 $21,112 $28,701

Net Profit/Sales 12.10% 8.76% 10.87%