26 on business planning 76 projected balance sheet

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Unformatted text preview: a margin that high in the future. The chart shows that we need to sell about $350,000 per month to break even, according to these assumptions. This is about half of our planned Year 1 sales level, and significantly below our last year’s sales level, so we believe we can maintain it. Break-even Analysis: Monthly Units Break-even Monthly Sales Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 824 $352,336 $427.69 $311.41 $95,792 BREAK-EVEN ANALYSIS Page 20 SAMPLE PLAN: AMT, INC. SP2.23 7.4 Projected Profit and Loss The most important assumption in the Projected Profit and Loss statement is the gross margin, which is supposed to increase. This is up from barely 21% in the last year. The increase in gross margin is based on changing our sales mix, and it is critical. Month-by-month assumptions for profit and loss are included in the appendices. Profit and Loss (Income Statement) Sales Direct Cost of Sales Production payroll Other Total Cost of Sales Gross Margin Gross Margin % Operating expenses: Sales and Marketing Expenses Sales and Marketing Payroll Ads Catalog Mailing Promo Shows Literature PR Seminar Service Training Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses General and Administrative Payroll Payroll Burden Depreciation Leased Equipment Utilities Insurance Rent Other Other Total General and Administrative Expenses General and Administrative % Year 1 $6,468,434 $4,708,513 $139,000 $6,000 —————— $4,853,513 $1,614,921 24.97% Year 2 $7,478,240 $5,315,054 $202,500 $6,600 —————— $5,524,154 $1,954,086 26.13% Year 3 $9,183,384 $6,221,700 $261,500 $7,260 —————— $6,490,460 $2,692,924 29.32% $344,000 $125,000 $25,000 $113,300 $16,000 $20,200 $7,000 $1,000 $31,000 $10,250 $5,400 —————— $698,150 10.79% $422,000 $140,000 $19,039 $120,000 $20,000 $25,000 $10,000 $1,250 $45,000 $12,000 $7,000 —————— $821,289 10.98% $486,000 $175,000 $19,991 $150,000 $25,000 $30,000 $12,500 $1,500 $60,00...
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