Financial Plan for Desklib

ASSUMPTION SHEET 2
SOURCES AND APPLICATION OF FUNDS 3
DETAILED EQUIPMENT LIST 3
PRO FORMA CASH FLOW STATEMENT 5
PROJECTED INCOME STATEMENT 6
RATIO ANALYSIS 8
BIBLIOGRAPHY 9

Financial Plan
ASSUMPTION SHEET
Our company created assumption sheet to let us know about the running of our finance
and the money we need. After conducting research, we found that the revenue in the
Fitness segment had reached $266m in 2019 with a growth of 6.1% resulting in a market
volume of $338m by 2023. This is based from the evidence provided in the Statistics
Portal website. We are expected to have 40-50 costumers a day in our location, because
our business is still small, and this is based on FTA Academy information. Our business
will also have same amount of customers at the beginning that range from 40-50. 70%
of the costumers use the practice field and 30% use the gym zone and the fitness area.
Let us say that 60% of the costumers have membership which is 40*30= $1200 per
month. Let us assume the rest they get within a day is through day pass. The day pass
cost $7.00, 15*7= $105 per day. $1200* 12 months will be $14,400 per year, and $105*
365 day will be $383,25 per year. In total it will be $52,725. We will start with 4 staff at a
payment of $20 per hour and we will increase the staff members with the increase in
costumers. The financial plan is prepared based on the important assumptions which
are represented in the table indicated below. These assumptions are annual based and
it is recognized from the initial stage that these collection days are very important, but
these are not the main factor, which can be influenced very easily. It is also assumed
that the interest rate burden on employees & tax rates all are based on realistic and
conservative assumptions. Other than these most important assumptions are;
 Assumption that the economy is strong and there is not major recession
 It is also assumed that there is not any change in the economic policy in the
coming years which can make products of our clients obsolete and outdated
The below table indicates the major financial assumptions of the business plan
Rate of interest 10%
Rate of interest for long term 10%
Taxation rate (Canada tax rate) 15%
SOURCES AND APPLICATION OF FUNDS
The finance for the academy will be gained from the two main sources. One would be
personal investment while other will be loan which will be gained from the bank. 50%
investment will be the part of personal investment while the remaining investment will
be sourced with the assistance of bank. All of the finance will not be used instantly in
the academy and most of machinery and equipment will be taken on lease to be on the
safe side. The company has planned to make investment time to time and make
improvement in the academy will be made after the customers will start to enroll in the
academy. The figures are assumed
Sources of Funds
year 1
Equity $950,000

Loans/Debt $950,000
Total sources of Funds
$1,900,00
0
Application of Funds
General startup cost
Organizational Cost $500,000
Prepaid Expenses 0
Opening inventory /Office supplies $100,000
Facility costs
Cost of equipments $200,000
Cost of forming policies $150,000
Cost of recruiting trainers $250,000
Total startup cost
$1,200,00
0
Leasehold Improvement $50,000
Equipment cost $20,069
Total Application of Funds
$1,270,06
9
Remaining Funds (Cash reserves) $629,931
DETAILED EQUIPMENT LIST
There are equipments, which are necessary to run the activities by the customers at
gym. Therefore, the detailed equipment list is prepared to ensure the availability of all
equipments in the fitness academy.
There is the need of more assets as the Academy will be providing services related
fitness; therefore, the users will use more equipment. In addition, users will also need
more than one pair at a time as without the equipments the operations of the academy
may be compromise. It has been estimated that the cost of equipment’s will be $10069
in the first year. In next year, cost will increase as these users and demand will increase.
Therefore, cost estimation also has been set as per the requirements. Given below is the
cost of each item for the academy with the prices mentioned.
Description Estimated cost ($)
Dumbbells 500
Treadmills 659
Fitness Equipment 200
Power Tower 500
Stair Climbers 600
Recumbent Exercise 210
Inversion Table 200
Yoga mats 100
Weights and Barbells 600
Cardio Equipment 500
Boxing equipment’s 200