k-even Analysis Break Even Analysis: ___________________________________________________ Monthly Units Break-even 125,000 Monthly Sales Break-even $125,000 Assumptions: Average Unit Sale $1.00 Average Per-Unit Cost $0.20 Fixed Cost $100,000 7. 4 Projected Profit and Loss The detailed monthly pro-forma income statement for the first year is included in the appendices. The annual estimates are included here. Pro-forma Income Statement 1995 1996 1997 _________________________________________________________________________ Sales $592,000 $775,000 $1,000,000 Cost of Sales $159,000 $110,000 $151,000 Other $1,000 $0 $0 _________________________________________________ Total Cost of Sales $160,000 $110,000 $151,000 Gross margin $432,000 $665,000 $849,000 Gross margin percent 72.97% 85.81% 84.90% Operating expenses: Advertising/Promotion 10.00% $36,000 $40,000 $44,000 Public Relations 10.00% $30,000 $30,000 $33,000 Travel 10.00% $90,000 $60,000 $110,000 Miscellaneous 10.00% $6,000 $7,000 $8,000 Payroll expense $194,750 $377,000 $432,000 Leased Equipment $6,000 $7,000 $7,000 Utilities 20% $12,000 $14,000 $17,000 Insurance 20% $3,600 $2,000 $2,000 Depreciation $0 $0 $0 Rent 25% $18,000 $23,000 $29,000 Payroll Burden $0 $0 $0 Contract/Consultants $0 $0 $0 Other $0 $0 $0 _________________________________________________ Total Operating Expenses $396,350 $560,000 $682,000 Profit Before Interest and Taxes$35,650 $105,000 $167,000 Interest Expense ST $3,600 $12,800 $12,800 Interest Expense LT $5,000 $5,000 $5,000 Taxes Incurred $0 $0 $0 Net Profit $27,050 $87,200 $149,200 Net Profit/Sales 4.57% 11.25% 14.92% 7. 5 Projected Cash Flow Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other the monthly balance. The annual cash flow figures are included here. Detailed monthly numbers are included in the appendices. Pro-Forma Cash Flow 1995 1996 1...
