Farm
Business Plans Handbook. Ed. Lynn M. Pearce. Vol. 19. Detroit, MI: Gale, 2011. p91-105.
Copyright: COPYRIGHT 2011 Gale, Cengage Learning
Full Text: 
Page 91

Farm

Gilmore Farms

123 Old Mill Rd.

Binghamton, NY 13905

BizPlanDB.com

Gilmore Farms is a New York based corporation that will produce and sell a variety of crops to farmer's markets and produce distributors.

1.0 EXECUTIVE SUMMARY

The purpose of this business plan is to raise $400,000 for the development of a farm while showcasing the expected financials and operations over the next three years. Gilmore Farms (“the Company”) is a New York based corporation that will produce and sell a variety of crops to farmer's markets and produce distributors. The Company was founded in 2010 by John Gilmore.

1.1 The Services

Gilmore Farms will produce a number of crops on a yearly basis depending on the demand for produce products. Mr. Gilmore anticipates that Gilmore Farms will encompass 15 to 20 acres of arable land that can be used to plant and grow a host of different produce goods.

At the onset of operations, Gilmore Farms will have approximately 4 farmhands to assist with the day to day operations of the farm.

The third section of the business plan will further describe the services offered by Gilmore Farms.

1.2 Financing

Mr. Gilmore is seeking to raise $400,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:

  • Development of the Company's Farm location.
  • Financing for the first six months of operation.
  • Capital to purchase FF&E and equipment associated with the Company's operations.

Mr. Gilmore will contribute $100,000 to the venture.

1.3 Mission Statement

Gilmore Farms' mission is to provide its buyers with the freshest quality produce available while concurrently using economically viable and ecologically sustainable practices.

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1.4 Management Team

The Company was founded by John Gilmore. Mr. Gilmore has more than 10 years of experience in the farming industry. Through his expertise,he will be able to bring the operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts

Mr. Gilmore expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

Proforma profit and loss (yearly)
year 1 2 3
Sales $753,000 $828,300 $911,130
Operating costs $331,787 $346,822 $362,770
EBITDA $120,013 $150,158 $183,908
Taxes, interest, $110,841 $107,512 $118,692
and depreciation
Net profit $9,172 $42,646 $65,216


Sales, operating costs, and profit forecast

Sales, operating costs, and profit forecast

1.6 Expansion Plan

Mr. Gilmore expects that the business will aggressively expand during the first three years of operation. To this end, he intends to implement marketing campaigns that will effectively target farmer's markets and produce buyers within the target market.

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2.0 COMPANY AND FINANCING SUMMARY

2.1 Registered Name and Corporate Structure

The Company is registered as a corporation in the State of New York.

2.2 Required Funds

At this time, Gilmore Farms requires $400,000 of debt funds. Below is a breakdown of how these funds will be used:

Projected startup costs
Land $150,000
Working capital $40,000
FF&E $50,000
Improvements $15,000
Security deposits $10,000
Insurance $5,000
Farming equipment $200,000
Marketing budget $20,000
Miscellaneous and unforeseen costs $10,000
Total startup costs $500,000


Use of funds

Use of funds

2.3 Investor Equity

Mr. Gilmore is not seeking an investment from a third party at this time.

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2.4 Management Equity

John Gilmore owns 100% of Gilmore Farms.

2.5 Exit Strategy

If the business is very successful, Mr. Gilmore may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of Gilmore Farms. Based on historical numbers, the business could fetch a sales premium of up to 3 to 5 times the previous year's net earnings.

3.0 FARMING OPERATIONS

As stated in the executive summary, Mr. Gilmore intends to develop Gilmore Farms as a multi-produce property that will plant, grow, and distribute its products to farmer's markets and produce wholesalers throughout the target market.

Mr. Gilmore has already sourced the potential land and the equipment that will be used for Gilmore Farms' operations. Additionally, it should be noted that Mr. Gilmore may join a produce co-op that will assist with the distribution and sale of Gilmore Farms' produce.

4.0 STRATEGIC AND MARKET ANALYSIS

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the farm/agriculture industry, the customer profile, and the competition that the business will face as it progresses through its business operations.

Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2010, at which point the economy will begin a prolonged recovery period. However, this should have a minimal impact on Gilmore Farms' ability to generate revenues as much of its crops will be geared towards staple foods that are constantly in demand regardless of the general economic climate.

4.2 Industry Analysis

Within the United States, agriculture producers (of produce) generate more than $130 billion per year of revenue and provide jobs to more than 1.5 million people. Aggregate payrolls in each of the last five years have exceeded $20 billion. This is a mature industry (and one of America's oldest industries), and the expected future growth rate is expected to mirror that of the general economy and population growth.

One of the most common trends in the farming and agriculture industry is that newer technologies and genetically engineered seeds are actually increasing the net profit margins of the business while concurrently lessening the ecological impact of farming on the environment.

4.3 Customer Profile

It is extremely difficult to determine the customer profile of people that will acquire the produce produced by Gilmore Farms, Inc. The Company intends to do business with farmer's markets, co-ops, and produce wholesalers that will acquire the Company's inventories of produce. However, Management has outlined the following buying groups that are expected to visit Gilmore Farms on a regular basis:

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  • Local grocery stores that want to purchase from local suppliers.
  • Individuals seeking to purchase organic produce.
  • Major national brokers of food commodities.

Within the Company's target market radius, there are approximately 2,000 people that could potentially become regular buyers of Gilmore Farms' organic produce via the distribution of farm shares on an annual basis. This would assist greatly with predicting the revenues of Gilmore Farms on a per annum basis.

4.4 Competition

As will be discussed further in the next section of the business plan, competition within the farming industry is hard to gauge given the fact the business' revenues are heavily dependent on the fluctuations of the value of food stuff commodities that are traded among major exchanges on a worldwide basis. However, the business—in its local market—intends to maintain a strong competitive advantage by providing only fresh organic produce to its customers.

5.0 MARKETING PLAN

Gilmore Farms intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of Gilmore Farms.

5.1 Marketing Objectives

  • Develop ongoing purchase order relationships with co-ops throughout the target market.
  • Develop relationships with major groceries and produce wholesalers that will acquire bulk inventories from Gilmore Farms.

5.2 Marketing Strategies

Gilmore Farms' marketing operations will be minimal as once the Company solidifies ongoing relationships with produce co-ops and wholesalers, very little marketing will be required to maintain these relationships. At the onset of operations, Mr. Gilmore intends to aggressively develop relationships with local and regional farming co-ops that will assist the farm in maintaining stringent pricing (through forward and futures contracts) so that Gilmore Farms always has a predictable stream of income.

However, in the future, Mr. Gilmore may seek to brand certain produce items that are produced on Gilmore Farms. In this instance, the Company will hire a marketing/advertising firm to properly position the Company's image and brand so that it can directly sell packaged produce to major grocers, supermarkets, farmer's markets, and select retailers.

5.3 Pricing

Pricing is the most difficult aspect in regards to Gilmore Farms' operations as the business will rely heavily on free market pricing models and commodities markets that trade the farm produced goods distributed by the business. As such, the pricing structures used by the business will vary on a year to year basis. Management intends to ameliorate these risks by working with farm co-ops that can effectively assist the business with locking in pricing for its produce prior to the onset of the harvesting season for each of the crops produced by Gilmore Farms.

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6.0 ORGANIZATIONAL PLAN AND PERSONNEL SUMMARY

6.1 Corporate Organization


Farm

6.2 Organizational Budget

Personnel plan—yearly
year 1 2 3
Owner $ 50,000 $ 51,500 $ 53,045
Site and facility manager $ 35,000 $ 36,050 $ 37,132
Farm hands $ 70,000 $ 72,100 $ 74,263
Bookkeeper (P/T) $ 10,000 $ 10,300 $ 10,609
Administrative $ 22,500 $ 23,175 $ 23,870
Total $187,500 $193,125 $198,919
Numbers of personnel
Owner 1 1 1
Site and facility manager 1 1 1
Farm hands 4 4 4
Bookkeeper (P/T) 1 1 1
Administrative 1 1 1
Totals 8 8 8


Personnel expense breakdown

Personnel expense breakdown

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7.0 FINANCIAL PLAN

7.1 Underlying Assumptions

The Company has based its proforma financial statements on the following:

  • Gilmore Farms will have an annual revenue growth rate of 10% per year.
  • The Owner will acquire $400,000 of debt funds to develop the business.
  • The loan will have a 10 year term with a 9% interest rate.

7.2 Sensitivity Analysis

In the event of an economic downturn, the business should not have a major decline in its revenues. Gilmore Farms intends to grow in demand produce that will be readily purchased by wholesalers, grocers, co-ops, and other organizations that deal in produce. As such, the Company will be able to remain profitable and cash flow positive in any economic climate.

7.3 Source of Funds

Financing
Equity contributions  
Management investment $ 100,000.00
Total equity financing $100,000.00
Banks and lenders
Banks and lenders $ 400,000.00
Total debt financing $ 400,000.00
Total financing $500,000.00

7.4 General Assumptions

General assumptions
year 1 2 3
Short term interest rate 9.5% 9.5% 9.5%
Long term interest rate 10.0% 10.0% 10.0%
Federal tax rate 33.0% 33.0% 33.0%
State tax rate 5.0% 5.0% 5.0%
Personnel taxes 15.0% 15.0% 15.0%
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7.5 Profit and Loss Statements

Proforma profit and loss (yearly)
year 1 2 3
Sales $753,000 $828,300 $911,130
Cost of goods sold $301,200 $331,320 $364,452
Gross margin 60.00% 60.00% 60.00%
Operating income $451,800 $496,980 $546,678
Expenses
Payroll $187,500 $193,125 $198,919
General and administrative $ 12,500 $ 13,000 $ 13,520
Product distribution expenses $ 37,650 $ 41,415 $ 45,557
Professional fees and licensure $ 5,000 $ 5,150 $ 5,305
Insurance costs $ 14,000 $ 14,700 $ 15,435
Travel and vehicle costs $ 19,000 $ 20,900 $ 22,990
Utility costs $ 25,000 $ 26,250 $ 27,563
Miscellaneous costs $ 3,012 $ 3,313 $ 3,645
Payroll taxes $ 28,125 $ 28,969 $ 29,838
Total operating costs $331,787 $346,822 $362,770
EBITDA $120,013 $150,158 $183,908
Federal income tax $ 39,604 $ 38,819 $ 50,832
State income tax $ 6,001 $ 5,882 $ 7,702
Interest expense $ 34,951 $ 32,526 $ 29,873
Depreciation expenses $ 30,286 $ 30,286 $ 30,286
Net profit $ 9,172 $ 42,646 $ 65,216
Profit margin 1.22% 5.15% 7.16%


Sales, operating costs, and profit forecast

Sales, operating costs, and profit forecast

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7.6 Cash Flow Analysis

Proforma cash flow analysis—yearly
year 1 2 3
Cash from operations $ 39,457 $72,932 $ 95,502
Cash from receivables $ 0 $ 0 $ 0
Operating cash inflow $ 39,457 $72,932 $ 95,502
Other cash inflows
Equity investment $100,000 $ 0 $ 0
Increased borrowings $400,000 $ 0 $ 0
Sales of business assets $ 0 $ 0 $ 0
A/P increases $ 10,000 $11,500 $ 13,225
Total other cash inflows $510,000 $11,500 $ 13,225
Total cash inflow $549,457 $84,432 $108,727
Cash outflows
Repayment of principal $25,854 $28,279 $30,932
A/P decreases $9,000 $10,800 $ 12,960
A/R increases $0 $0 $0
Asset purchases $471,500 $7,293 $9,550
Dividends $31,566 $36,466 $47,751
Total cash out flows $537,919 $82,838 $101,193
Net cash flow $11,538 $1,594 $7,534
Cash balance $11,538 $13,132 $20,666


Proforma cash flow (yearly)

Proforma cash flow (yearly)

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7.7 Balance Sheet

Proforma balance sheet—yearly
year 1 2 3
Assets
Cash $ 11,538 $ 13,132 $ 20,666
Amortized development/expansion costs $ 40,000 $ 40,729 $ 41,684
Farm equipment $175,000 $178,647 $183,422
FF&E $ 50,000 $ 52,917 $ 56,737
Property $159,000 $168,540 $178,652
Accumulated depreciation ($ 30,286) ($ 60,571) ($ 90,857)
Total assets $405,252 $393,394 $390,305
Liabilities and equity
Accounts payable $ 1,000 $ 1,700 $ 1,965
Long term liabilities $374,146 $345,868 $317,589
Other liabilities $0 $0 $0
Total liabilities $375,146 $347,568 $319,554
Net worth $ 30,106 $ 45,826 $ 70,751
Total liabilities and equity $405,252 $393,394 $390,305


Proforma balance sheet

Proforma balance sheet

7.8 Breakeven Analysis

Monthly break even analysis
year 1 2 3
Monthly revenue $ 46,082 $ 48,170 $ 50,385
Yearly revenue $552,978 $578,037 $604,616
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Break even analysis

Break even analysis

7.9 Business Ratios

Business ratios—yearly
year 1 2 3
Sales
Sales growth 0.0% 10.0% 10.0%
Gross margin 60.0% 60.0% 60.0%
Financials
Profit margin 1.22% 5.15% 7.16%
Assets to liabilities 1.08 1.13 1.22
Equity to liabilities 0.08 0.13 0.22
Assets to equity 13.46 8.58 5.52
Liquidity
Acid test 0.03 0.04 0.06
Cash to assets 0.03 0.03 0.05

7.10 Three Year Profit and Loss Statement

Profit and loss statement (first year)
Months 1 2 3 4 5 6 7
Sales $60,000 $60,500 $61,000 $61,500 $62,000 $62,500 $63,000
Cost of goods sold $24,000 $24,200 $24,400 $24,600 $24,800 $25,000 $25,200
Gross margin 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0%
Operating income $36,000 $36,300 $36,600 $36,900 $37,200 $37,500 $37,800
Expenses
Payroll $15,625 $15,625 $15,625 $15,625 $15,625 $15,625 $15,625
General and administrative $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042
Product distribution expenses $ 3,138 $ 3,138 $ 3,138 $ 3,138 $ 3,138 $ 3,138 $ 3,138
Professional fees and licensure $ 417 $ 417 $ 417 $ 417 $ 417 $ 417 $ 417
Insurance costs $ 1,167 $ 1,167 $ 1,167 $ 1,167 $ 1,167 $ 1,167 $ 1,167
Travel and vehicle costs $ 1,583 $ 1,583 $ 1,583 $ 1,583 $ 1,583 $ 1,583 $ 1,583
Utility costs $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083
Miscellaneous costs $ 251 $ 251 $ 251 $ 251 $ 251 $ 251 $ 251
Payroll taxes $ 2,344 $ 2,344 $ 2,344 $ 2,344 $ 2,344 $ 2,344 $ 2,344
Total operating costs $27,649 $27,649 $27,649 $27,649 $27,649 $27,649 $27,649
EBITDA $ 8,351 $ 8,651 $ 8,951 $ 9,251 $ 9,551 $ 9,851 $10,151
Federal income tax $ 3,156 $ 3,182 $ 3,208 $ 3,235 $ 3,261 $ 3,287 $ 3,314
State income tax $ 478 $ 482 $ 486 $ 490 $ 494 $ 498 $ 502
Interest expense $ 3,000 $ 2,984 $ 2,969 $ 2,953 $ 2,937 $ 2,921 $ 2,905
Depreciation expense $ 2,524 $ 2,524 $ 2,524 $ 2,524 $ 2,524 $ 2,524 $ 2,524
Net profit -$ 807 -$ 521 -$ 236 $ 49 $ 335 $ 621 $ 906
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Profit and loss statement (first year cont.)
Month 8 9 10 11 12 1
Sales $63,500 $64,000 $64,500 $65,000 $65,500 $753,000
Cost of goods sold $25,400 $25,600 $25,800 $26,000 $26,200 $301,200
Gross margin 60.0% 60.0% 60.0% 60.0% 60.0% 60.0%
Operating income $38,100 $38,400 $38,700 $39,000 $39,300 $451,800
Expenses
Payroll $15,625 $15,625 $15,625 $15,625 $15,625 $187,500
General and administrative $ 1,042 $ 1,042 $ 1,042 $ 1,042 $ 1,042 $ 12,500
Product distribution expenses $ 3,138 $ 3,138 $ 3,138 $ 3,138 $ 3,138 $ 37,650
Professional fees and licensure $ 417 $ 417 $ 417 $ 417 $ 417 $ 5,000
Insurance costs $ 1,167 $ 1,167 $ 1,167 $ 1,167 $ 1,167 $ 14,000
Travel and vehicle costs $ 1,583 $ 1,583 $ 1,583 $ 1,583 $ 1,583 $ 19,000
Utility costs $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 2,083 $ 25,000
Miscellaneous costs $ 251 $ 251 $ 251 $ 251 $ 251 $ 3,012
Payroll taxes $ 2,344 $ 2,344 $ 2,344 $ 2,344 $ 2,344 $ 28,125
Total operating costs $27,649 $27,649 $27,649 $27,649 $27,649 $331,787
EBITDA $10,451 $10,751 $11,051 $11,351 $11,651 $120,013
Federal income tax $ 3,340 $ 3,366 $ 3,392 $ 3,419 $ 3,445 $ 39,604
State income tax $ 506 $ 510 $ 514 $ 518 $ 522 $ 6,001
Interest expense $ 2,889 $ 2,873 $ 2,856 $ 2,840 $ 2,823 $ 34,951
Depreciation expense $ 2,524 $ 2,524 $ 2,524 $ 2,524 $ 2,524 $ 30,286
Net profit $ 1,192 $ 1,478 $ 1,765 $ 2,051 $ 2,337 $9,172
Profit and loss statement (second year)
Quarter Q1 2
Q2
Q3 Q4 2
Sales $165,660 $207,075 $223,641 $231,924 $828,300
Cost of goods sold $ 66,264 $ 82,830 $ 89,456 $ 92,770 $ 331,320
Gross margin 60.0% 60.0% 60.0% 60.0% 60.0%
Operating income $ 99,396 $124,245 $134,185 $139,154 $496,980
Expenses
Payroll $ 38,625 $ 48,281 $ 52,144 $ 54,075 $ 193,125
General and administrative $ 2,600 $ 3,250 $ 3,510 $ 3,640 $ 13,000
Product distribution expenses $ 8,283 $ 10,354 $ 11,182 $ 11,596 $ 41,415
Professional fees and licensure $ 1,030 $ 1,288 $ 1,391 $ 1,442 $ 5,150
Insurance costs $ 2,940 $ 3,675 $ 3,969 $ 4,116 $ 14,700
Travel and vehicle costs $ 4,180 $ 5,225 $ 5,643 $ 5,852 $ 20,900
Utility costs $ 5,250 $ 6,563 $ 7,088 $ 7,350 $ 26,250
Miscellaneous costs $ 663 $ 828 $ 895 $ 928 $ 3,313
Payroll taxes $ 5,794 $ 7,242 $ 7,822 $ 8,111 $ 28,969
Total operating costs $ 69,364 $ 86,705 $ 93,642 $ 97,110 $346,822
EBITDA $ 30,032 $ 37,540 $ 40,543 $ 42,044 $150,158
Federal income tax $ 7,764 $ 9,705 $ 10,481 $ 10,869 $ 38,819
State income tax $ 1,176 $ 1,470 $ 1,588 $ 1,647 $ 5,882
Interest expense $ 8,367 $ 8,212 $ 8,054 $ 7,892 $ 32,526
Depreciation expense $ 7,571 $ 7,571 $ 7,571 $ 7,571 $ 30,286
Net profit $ 5,153 $ 10,581 $ 12,848 $ 14,065 $ 42,646
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Profit and loss statement (third year)
Quarter Q1 2
Q2
Q3 Q4 3
Sales $182,226 $227,783 $246,005 $255,116 $911,130
Cost of goods sold $ 72,890 $ 91,113 $ 98,402 $102,047 $364,452
Gross margin 60.0% 60.0% 60.0% 60.0% 60.0%
Operating income $109,336 $136,670 $147,603 $153,070 $546,678
Expenses
Payroll $ 39,784 $ 49,730 $ 53,708 $ 55,697 $198,919
General and administrative $ 2,704 $ 3,380 $ 3,650 $ 3,786 $ 13,520
Product distribution expenses $ 9,111 $ 11,389 $ 12,300 $ 12,756 $ 45,557
Professional fees and licensure $ 1,061 $ 1,326 $ 1,432 $ 1,485 $ 5,305
Insurance costs $ 3,087 $ 3,859 $ 4,167 $ 4,322 $ 15,435
Travel and vehicle costs $ 4,598 $ 5,748 $ 6,207 $ 6,437 $ 22,990
Utility costs $ 5,513 $ 6,891 $ 7,442 $ 7,718 $ 27,563
Miscellaneous costs $ 729 $ 911 $ 984 $ 1,020 $ 3,645
Payroll taxes $ 5,968 $ 7,459 $ 8,056 $ 8,355 $ 29,838
Total operating costs $ 72,554 $ 90,692 $ 97,948 $101,575 $362,770
EBITDA $ 36,782 $ 45,977 $ 49,655 $ 51,494 $183,908
Federal income tax $ 10,166 $ 12,708 $ 13,725 $ 14,233 $ 50,832
State income tax $ 1,540 $ 1,925 $ 2,079 $ 2,156 $ 7,702
Interest expense $ 7,726 $ 7,557 $ 7,384 $ 7,206 $ 29,873
Depreciation expense $ 7,571 $ 7,571 $ 7,571 $ 7,571 $ 30,286
Net profit $ 9,777 $ 16,216 $ 18,896 $ 20,327 $ 65,216

7.11 Three Year Cash Flow Analysis

Cash flow analysis (first year)
Month 1 2 3 4 5 6 7 8
Cash from operations $ 1,717 $ 2,002 $ 2,288 $ 2,573 $ 2,859 $ 3,144 $ 3,430 $ 3,716
Cash from receivables $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Operating cash inflow $ 1,717 $ 2,002 $ 2,288 $ 2,573 $ 2,859 $ 3,144 $ 3,430 $ 3,716
Other cash inflows
Equity investment $100,000 $0 $0 $0 $0 $0 $0 $0
Increased borrowings $400,000 $0 $0 $0 $0 $0 $0 $0
Sales of business assets $ 0 $0 $0 $0 $0 $0 $0 $0
A/P increases $833 $833 $833 $833 $833 $833 $833 $833
Total other cash inflows $500,833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833 $ 833
Total cash inflow $502,551 $ 2,836 $ 3,121 $ 3,407 $ 3,692 $ 3,978 $ 4,264 $ 4,550
Cash outflows
Repayment of principal $2,067 $ 2,083 $ 2,098 $ 2,114 $ 2,130 $ 2,146 $ 2,162 $ 2,178
A/P decreases $750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750
A/R increases $ 0 $0 $0 $0 $0 $0 $0 $0
Asset purchases $471,500 $0 $0 $0 $0 $0 $0 $0
Dividends $ 0 $0 $0 $0 $0 $0 $0 $0
Total cash outflows $474,317 $ 2,833 $ 2,848 $ 2,864 $ 2,880 $ 2,896 $ 2,912 $ 2,928
Net cash flow $ 28,234 $3 $ 273 $ 543 $ 812 $ 1,082 $ 1,352 $ 1,622
Cash balance $ 28,234 $28,237 $28,510 $29,052 $29,865 $30,947 $32,299 $33,920
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Cash flow analysis (first year cont.)
Month 9 10 11 12 1
Cash from operations $ 4,002 $ 4,288 $ 4,575 $ 4,861 $ 39,457
Cash from receivables $ 0 $ 0 $ 0 $ 0 $ 0
Operating cash inflow $ 4,002 $ 4,288 $ 4,575 $ 4,861 $ 39,457
Other cash inflows
Equity investment $ 0 $ 0 $ 0 $ 0 $100,000
Increased borrowings $ 0 $ 0 $ 0 $ 0 $400,000
Sales of business assets $ 0 $ 0 $ 0 $ 0 $ 0
A/P increases $ 833 $ 833 $ 833 $ 833 $ 10,000
Total other cash inflows $ 833 $ 833 $ 833 $ 833 $510,000
Total cash inflow $ 4,836 $ 5,122 $ 5,408 $ 5,695 $549,457
Cash outflows
Repayment of principal $ 2,194 $ 2,211 $ 2,227 $ 2,244 $ 25,854
A/P decreases $ 750 $ 750 $ 750 $ 750 $ 9,000
A/R increases $ 0 $ 0 $ 0 $ 0 $ 0
Asset purchases $ 0 $ 0 $ 0 $ 0 $471,500
Dividends $ 0 $ 0 $ 0 $31,566 $ 31,566
Total cash outflows $ 2,944 $ 2,961 $ 2,977 $34,560 $537,919
Net cash flow $ 1,891 $ 2,161 $ 2,431 -$28,866 $ 11,538
Cash balance $35,812 $37,973 $40,403 $11,538 $ 11,538
Cash flow analysis (second year)
Quarter Q1 2
Q2
Q3 Q4 2
Cash from operations $14,586 $18,233 $19,692 $20,421 $72,932
Cash from receivables $0 $0 $0 $0 $0
Operating cash inflow $14,586 $18,233 $19,692 $20,421 $72,932
Other cash inflows
Equity investment $0 $0 $0 $0 $0
Increased borrowings $0 $0 $0 $0 $0
Sales of business assets $0 $0 $0 $0 $0
A/P increases $ 2,300 $ 2,875 $ 3,105 $ 3,220 $11,500
Total other cash inflows $ 2,300 $ 2,875 $ 3,105 $ 3,220 $11,500
Total cash inflow $16,886 $21,108 $22,797 $23,641 $84,432
Cash outflows
Repayment of principal $ 6,834 $ 6,989 $ 7,147 $ 7,309 $28,279
A/P decreases $ 2,160 $ 2,700 $ 2,916 $ 3,024 $10,800
A/R increases $0 $0 $0 $0 $0
Asset purchases $ 1,459 $ 1,823 $ 1,969 $ 2,042 $ 7,293
Dividends $ 7,293 $ 9,117 $ 9,846 $10,211 $36,466
Total cash outflows $17,746 $20,629 $21,878 $22,586 $82,838
Net cash flow •$859 $480 $ 919 $ 1,055 $ 1,594
Cash balance $10,679 $11,158 $12,077 $13,132 $13,132
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Cash flow analysis (third year)
Quarter Q1 2
Q2
Q3 Q4 3
Cash from operations $19,100 $23,876 $25,786 $26,741 $ 95,502
Cash from receivables $ 0 $ 0 $ 0 $ 0 $ 0
Operating cash inflow $19,100 $23,876 $25,786 $26,741 $ 95,502
Other cash inflows
Equity investment $ 0 $ 0 $ 0 $ 0 $ 0
Increased borrowings $ 0 $ 0 $ 0 $ 0 $ 0
Sales of business assets $ 0 $ 0 $ 0 $ 0 $ 0
A/P increases $ 2,645 $ 3,306 $ 3,571 $ 3,703 $ 13,225
Total other cash inflows $ 2,645 $ 3,306 $ 3,571 $ 3,703 $ 13,225
Total cash inflow $21,745 $27,182 $29,356 $30,444 $108,727
Cash outflows
Repayment of principal $ 7,475 $ 7,644 $ 7,818 $ 7,995 $ 30,932
A/P decreases $ 2,592 $ 3,240 $ 3,499 $ 3,629 $ 12,960
A/R increases $ 0 $ 0 $ 0 $ 0 $ 0
Asset purchases $ 1,910 $ 2,388 $ 2,579 $ 2,674 $ 9,550
Dividends $ 9,550 $11,938 $12,893 $13,370 $ 47,751
Total cash outflows $21,527 $25,210 $26,788 $27,668 $101,193
Net cash flow $ 218 $ 1,972 $ 2,568 $ 2,776 $ 7,534
Cash balance $13,350 $15,322 $17,891 $20,666 $ 20,666
Source Citation   (MLA 8th Edition) 
"Farm." Business Plans Handbook, edited by Lynn M. Pearce, vol. 19, Gale, 2011, pp. 91-105. Gale Virtual Reference Library, http%3A%2F%2Flink.galegroup.com%2Fapps%2Fdoc%2FCX2356200016%2FGVRL%3Fu%3Dcarnegielib%26sid%3DGVRL%26xid%3D1a4e1f39. Accessed 21 July 2019.

Gale Document Number: GALE|CX2356200016

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  • Farm
    • 19: 91-105