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Hardware Store: Oshkosh Hardware, Inc.

Hardware Store

FICTIONAL BUSINESS PLAN

OSHKOSH HARDWARE, INC


123 Main St.
Oshkosh, WI 54901

June 1994


The following plan outlines how a small hardware store can survive competition from large discount chains by offering products and providing expert advice in the use of any product it sells. This plan is fictional and has not used to gain funding from a bank or other lending institution.


  • executive summary
  • the business
  • the market
  • sales
  • management
  • goals implementation
  • finance
  • job description-general manager
  • quarterly forecasted balance sheets
  • quarterly forecasted statements of earnings and retained earnings
  • quarterly forecasted statements of changes in financial position
  • financial ratio analysis
  • details for quarterly statements of earnings

EXECUTIVE SUMMARY

Oshkosh Hardware, Inc. is a new corporation which is going to establish a retail hardware store in a strip mall in Oshkosh, Wisconsin. The store will sell hardware of all kinds, quality tools, paint and housewares. The business will make revenue and a profit by servicing its customers not only with needed hardware but also with expert advice in the use of any product it sells.

Oshkosh Hardware, Inc. will be operated by its sole shareholder, James Smith. The company will have a total of four employees. It will sell its products in the local market. Customers will buy our products because we will provide free advice on the use of all of our products and will also furnish a full refund warranty.

Oshkosh Hardware, Inc. will sell its products in the Oshkosh store staffed by three sales representatives. No additional employees will be needed to achieve its short and long range goals. The primary short range goal is to open the store by October 1, 1994. In order to achieve this goal a lease must be signed by July 1, 1994 and the complete inventory ordered by August 1, 1994.

Mr. James Smith will invest $30,000 in the business. In addition the company will have to borrow $150,000 during the first year to cover the investment in inventory, accounts receivable, and furniture and equipment. The company will be profitable after six months of operation and should be able to start repayment of the loan in the second year.

THE BUSINESS

The business will sell hardware of all kinds, quality tools, paint, and housewares. We will purchase our products from three large wholesale buying groups.

In general our customers are homeowners who do their own repair and maintenance, hobbyists, and housewives. Our business is unique in that we will have a complete line of all hardware items and will be able to get special orders by overnight delivery. The business makes revenue and profits by servicing our customers not only with needed hardware but also with expert advice in the use of any product we sell. Our major costs for bringing our products to market are cost of merchandise of 36%, salaries of $45,000, and occupancy costs of $60,000.

Oshkosh Hardware, Inc.'s retail outlet will be located at 1524 Frontage Road, which is in a newly developed retail center of Oshkosh. Our location helps facilitate accessibility from all parts of town and reduces our delivery costs. The store will occupy 7500 square feet of space. The major equipment involved in our business is counters and shelving, a computer, a paint mixing machine, and a truck.

THE MARKET

Oshkosh Hardware, Inc. will operate in the local market. There are 15,000 potential customers in this market area. We have three competitors who control approximately 98% of the market at present. We feel we can capture 25% of the market within the next four years. Our major reason for believing this is that our staff is technically competent to advise our customers in the correct use of all products we sell.

After a careful market analysis we have determined that approximately 60% of our customers are men and 40% are women. The percentage of customers that fall into the following age categories are:

Under 16-0%
17-21-5%
22-30-30%
31-40-30%
41-50-20%
51-60-10%
61-70-5%
Over 70-0%

The reasons our customers prefer our products is our complete knowledge of their use and our full refund warranty.

We get our information about what products our customers want by talking to existing customers. There seems to be an increasing demand for our product. The demand for our product is increasing in size based on the change in population characteristics.

SALES

At Oshkosh Hardware, Inc. we will employ 3 sales people and will not need any additional personnel to achieve our sales goals. These salespeople will need several years experience in home repair and power tool usage. We expect to attract 30% of our customers from newspaper ads, 5% of our customers from local directories, 5% of our customers from the yellow pages, 10% of our customers from family and friends and 50% of our customers from current customers. The most cost effect source will be current customers. In general our industry is growing.

MANAGEMENT

We would evaluate the quality of our management staff as being excellent. Our manager is experienced and very motivated to achieve the various sales and quality assurance objectives we have set. We will use a management information system which produces key inventory, quality assurance and sales data on a weekly basis. All data is compared to previously established goals for that week and deviations are the primary focus of the management staff.

GOALS IMPLEMENTATION

The short term goals of our business are:

  1. Open the store by October 1, 1994
  2. Reach our breakeven point in two months
  3. Have sales of $100,000 in the first six months

In order to achieve our first short term goal we must:

  1. Sign the lease by July 1, 1994
  2. Order a complete inventory by August 1, 1994

In order to achieve our second short term goal we must:

  1. Advertise extensively in Sept. and Oct.
  2. Keep expenses to a minimum

In order to achieve our third short term goal we must:

  1. Promote power tool sales for the Christmas season
  2. Keep good customer traffic in Jan. and Feb.

The long term goals for our business are:

  1. Obtain sales volume of $600,000 in three years
  2. Become the largest hardware dealer in the city
  3. Open a second store in Fond du Lac

The most important thing we must do in order to achieve the long term goals for our business is to develop a highly profitable business with excellent cash flow.

FINANCE

Oshkosh Hardware, Inc. Faces some potential threats or risks to our business. They are discount house competition. We believe we can avoid or compensate for this by providing quality products complimented by quality advice on the use of every product we sell. The financial projections we have prepared are located at the end of this document.

JOB DESCRIPTION-GENERAL MANAGER

The General Manager of the business of the corporation will be the president of the corporation. He will be responsible for the complete operation of the retail hardware store which is owned by the corporation. A detailed description of his duties and responsibilities is as follows:

Sales

Train and supervise the three sales people. Develop programs to motivate and compensate these employees. Coordinate advertising and sales promotion effects to achieve sales totals as outlined in budget. Oversee purchasing function and inventory control procedures to insure adequate merchandise at all times at a reasonable cost.

Finance

Prepare monthly and annual budgets. Secure adequate line of credit from local banks. Supervise office personnel to insure timely preparation of records, statements, all government reports, control of receivables and payables and monthly financial statements.

Administration

Perform duties as required in the areas of personnel, building leasing and maintenance, licenses and permits and public relations.

QUARTERLY FORECASTED BALANCE SHEETS

Beg Bal 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Assets
Cash 30,000 418 (463) (3,574) 4,781
Accounts Receivable 0 20,000 13,333 33,333 33,333
Inventory 0 48,000 32,000 80,000 80,000
Other Current Assets 0 0 0 0 0
Total Current Assets 30,000 68,418 44,870 109,759 118,114
Land 0 0 0 0 0
Building & Improvements 0 0 0 0 0
Furniture & Equipment 0 75,000 75,000 75,000 75,000
Total Fixed Assets 0 75,000 75,000 75,000 75,000
Less Accum. Depreciation 0 1,875 3,750 5,625 7,500
Net Fixed Assets 0 73,125 71,250 69,375 67,500
Intangible Assets 0 0 0 0 0
Less Amortization 0 0 0 0 0
Net Intangible Assets 0 0 0 0 0
Other Assets 0 0 0 0 0
Total Assets 30,000 141,543 116,120 179,134 185,614
Liabilities and Shareholders' Equity
Short-Term Debt 0 0 0 0 0
Accounts Payable 0 12,721 10,543 17,077 17,077
Dividends Payable 0 0 0 0 0
Income Taxes Payable 0 (1,031) (2,867) (2,355) (1,843)
Accured Compensation 0 1,867 1,867 1,867 1,867
Other Current Liabilities 0 0 0 0 0
Total Current Liabilities 0 13,557 9,543 16,589 17,101
Long-Term Debt 0 110,000 110,000 160,000 160,000
Other Non-Current Liabilities 0 0 0 0 0
Total Liabilities 0 123,557 119,543 176,589 177,101
Common Stock 30,000 30,000 30,000 30,000 30,000
Retained Earnings 0 (12,014) (33,423) (27,455) (21,487)
Shareholders' Equity 30,000 17,986 (3,423) 2,545 8,513
Total Liabilities & Shareholders' Equity 30,000 141,543 116,120 179,134 185,614

QUARTERLY FORECASTED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Beg Actual lst Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
Total Sales 0 60,000 40,000 100,000 100,000 300,000
Goods/Services 0 21,600 14,400 36,000 36,000 108,000
Gross Profit 0 38,400 25,600 64,000 64,000 192,000
Operating Expenses 0 47,645 45,045 52,845 52,845 198,380
Fixed Expenses
Interest 0 1,925 1,925 2,800 2,800 9,450
Depreciation 0 1,875 1,875 1,875 1,875 7,500
Amortization 0 0 0 0 0 0
Total Fixed Expenses 0 3,800 4,675 4,675 16,950
Operating Profit (Loss) 0 (13,045) (23,245) 6,480 6,480 (23,330)
Other Income (Expense) 0 0 0 0 0 0
Interest Income
Earnings (Loss)
Before Taxes 0 (13,045) (23,245) 6,480 6,480 (23,330)
Income Taxes 0 (1,031) (1,836) 512 512 (1,843)
Net Earnings 0 (12,014) (21,409) 5,968 5,968 (21,487)
Retained Earnings, Beginning 0 0 (12,014) (33,423) (27,455) 0
Less Dividends 0 0 0 0 0 0
Retained Earnings, Ending 0 (12,014) (33,423) (27,455) (21,487) (21,487)

QUARTERLY FORECASTED STATEMENTS OF CHANGES IN FINANCIAL POSITION

Beg Bal lst Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
Sources (Uses) of Cash
Net Earnings (Loss) 0 (12,014) (21,409) 5,968 5,968 (21,487)
Depreciation & Amortization 0 1,875 1,875 1,875 1,875 7,500
Cash Provided by Operations 0 (10,139) (19,534) 7,834 7,834 (13,987)
Dividends 0 0 0 0 0 0
Cash Provided by (Used For) Changes in
Accounts Receivable 0 (20,000) 6,667 (20,000) 0 (33,333)
Inventory 0 (48,000) 16,000 (48,000) 0 (80,000)
Other Current Assets 0 0 0 0 0 0
Accounts Payable 0 12, 721 (2,178) 65,340 17,077
Income Taxes 0 (1,031) (1,836) 512 512 (1,843)
Accrued Compensation 0 1,867 0 0 0 1,867
Dividends Payable 0 0 0 0 0 0
Other Current Liabilities 0 0 0 0 0 0
Other Assests 0 0 0 0 0 0
Net Cash Provided by (Used For)
Operating Activities 0 (54,443) 18,653 (60,954) 512 (96,233)
Investment Transactions
Furniture & Equipment 0 (75,000) 0 0 0 (75,000)
Land 0 0 0 0 0 0
Building & Improvements 0 0 0 0 0 0
Intangible Assets 0 0 0 0 0 0
Net Cash From
Investment Transactions 0 (75,000) 0 0 0 (75,000)
Financing Transactions
Short-Term Debt 0 0 0 0 0 0
Long-Term Debt 0 110,000 0 50,000 0 160,000
Other Non-Current Liabilities 0 0 0 0 0 0
Sale of Common Stock 30,000 0 0 0 0 0
Net Cash from Financing Transactions 30,000 110,000 0 50,000 0 160,000
Net Increase (Decrease) in Cash 30,000 (29,582) (881) (3,111) 8,355 (25,219)
Cash-Beginning of Period 0 30,000 418 (463) (3,574) 30,000
Cash-End of Period 30,000 418 (463) (3,574) 4,781 4,781

FINANCIAL RATIO ANALYSIS

Beg Act lst Qtr 2nd Qtr 3rd Qtr 4th Qtr
Overall Performance
Return on Equity 0.00 (66.80) 625.45 234.50 70.10
Return on Total Assets 0.00 (8.49) (18.44) 3.33 3.22
Operating Return 0.00 (9.22) (20.02) 3.62 3.49
Profitability Measures
Gross Profit Percent 0.00 64.00 64.00 64.00 64.00
Profit Margin (AIT) 0.00 (20.02) (53.52) 5.97 5.97
Operating Income per Share 0.00 0.00 0.00 0.00 0.00
Earnings per Share 0.00 0.00 0.00 0.00 0.00
Test of Investment Utilization
Asset Turnover 0.00 0.42 0.34 0.56 0.54
Equity Turnover 0.00 334 (11.69) 39.29 11.75
Fixed Asset Turnover 0.00 0.82 0.56 1.44 1.48
Average Collection Period 0.00 30.00 30.00 30.00 30.00
Days Inventory 0.00 200.00 200.00 200.00 200.00
Inventory Turnover 0.00 0.45 0.45 0.45 0.45
Working Capital Turns 0.00 1.09 1.13 1.07 0.99
Test of Financial Condition
Current Ratio 0.00 5.05 4.70 6.62 6.91
Quick Ratio 0.00 1.51 1.35 1.79 2.23
Working Capital Ratio 1.00 0.43 0.33 0.57 0.60
Dividend Payout 0.00 0.00 0.00 0.00 0.00
Financial Leverage
Total Assets 1.00 7.87 (33.92) 70.39 21.80
Debt/Equity 0.00 6.87 (34.92) 69.39 20.80
Debt to Total Assets 0.00 0.87 1.03 0.99 0.95
Year-End Equity History
Shares Outstanding 0 0 0 0 0
Market Price per Share 0.00 0.00 0.00 0.00 0.00
(@20x's earnings)
Book Value per Share 0.00 0.00 0.00 0.00 0.00
Altman Analysis Ratio
1.2x (1) 1.20 0.47 0.37 0.62 0.65
1.4x (2) 0.00 (0.12) (0.40) (0.21) (0.16)
3.3x (3) 0.00 (0.35) (0.72) 0.07 0.07
0.6x (4) 0.00 0.00 0.00 0.00 0.00
1.0x (5) 0.00 0.42 0.34 0.56 0.54
Z Value 1.20 .042 (.041) 1.04 1.10

DETAILS FOR QUARTERLY STATEMENTS OF EARNINGS

Beg Act lst Qtr 2nd Qtr 3rd Qtr 4th Qtr Total % Sales Fixed
Sales
Dollars Sales Forecasted
Product 1 0 60,000 40,000 100,000 100,000 300,000
Product 2 0 0 0 0 0 0
Product 3 0 0 0 0 0 0
Product 4 0 0 0 0 0 0
Product 5 0 0 0 0 0 0
Product 6 0 0 0 0 0 0
Total Sales 0 60,000 40,000 100,000 100,000 300,000
Cost of Sales
Dollar Cost Forecasted
Product 1 0 21,600 14,400 36,000 36,000 108,000 36.00% 0
Product 2 0 0 0 0 0 0 0.00% 0
Product 3 0 0 0 0 0 0 0.00% 0
Product 4 0 0 0 0 0 0 0.00% 0
Product 5 0 0 0 0 0 0 0.00% 0
Product 6 0 0 0 0 0 0 0.00% 0
Total Cost of Sales 0 21,600 14,400 36,000 36,000 108,000
Operating Expenses
Payroll 0 12,000 12,000 12,000 12,000 48,000 0.00% 12,000
Paroll Taxes 0 950 950 950 950 3,800 0.00% 950
Advertising 0 4,800 3,200 8,000 8,000 24,000 8.00% 0
Automobile Expenses 0 0 0 0 0 0.00% 0
Bad Debts 0 0 0 0 0 0 0.00% 0
Commissions 0 3,000 2,000 5,000 5,000 15,000 5.00% 0
Computer Rental 0 1,200 1,200 1,200 1,200 4,800 0.00% 1,200
Computer Supplies 0 220 220 220 220 880 0.00% 220
Computer Maintenance 0 100 100 100 100 400 0.00% 100
Dealer Training 0 1,000 1,000 1,000 1,000 4,000 0.00% 1,000
Electricity 0 3,000 3,000 3,000 3,000 12,000 0.00% 3,000
Employment Ads and Fees 0 0 0 0 0 0 0.00% 0
Entertainment: Business 0 1,500 1,500 1,500 1,500 6,000 0.00% 1,500
General Insurance 0 800 800 800 800 32,000 0.00% 800
Health & W/C Insurance 0 0 0 0 0 0 .00% 0
Interest-LT Debt 0 2,500 2,500 2,500 2,500 10,000 0.00% 2,500
Legal & Accounting 0 1,500 1,500 1,500 1,500 6,000 0.00% 1,500
Maintenance & Repairs 0 460 460 460 460 1,840 0.00% 460
Beg Act lst Qtr 2nd Qtr 3rd Qtr 4th Qtr Total % Sales Fixed
Office Supplies 0 270 270 270 270 1,080 0.00% 270
Postage 0 85 85 85 85 340 0.00% 85
Prof. Development 0 0 0 0 0 0 0.00% 0
Professional Fees 0 1,000 1,000 1,000 1,000 4,000 0.00% 1,000
Rent 0 8,000 8,000 8,000 8,0003 2,000 0.00% 8,000
Shows & Conferences 0 0 0 0 0 0 0.00% 0
Subscriptions & Dues 0 285 285 285 285 1,140 0.00% 285
Telephone 0 1,225 1,225 1,225 1,225 4,900 0.00% 1,225
Temporary Employees 0 0 0 0 0 0 0.00% 0
Travel Expenses 0 750 750 750 750 3,000 0.00% 750
Utilities 0 3,000 3,000 3,000 3,000 12,000 0.00% 3,000
Research & Devlpmnt. 0 0 0 0 0 0 0.00% 0
Royalties 0 0 0 0 0 0 0.00% 0
Other 1 0 0 0 0 0 0 0.00% 0
Other 2 0 0 0 0 0 0 0.00% 0
Other 3 0 0 0 0 0 0 0.00% 0
Total Operating
Expenses 0 47,645 45,045 52,845 52,845 198,380
Percent of Sales 0.00 79.41 112.61 52.85 52.85 66.13

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Hardware Store: Oshkosh Hardware, Inc.

Hardware Store

BUSINESS PLAN

OSHKOSH HARDWARE, INC


123 Main St.
Oshkosh, WI 54901

June 1994


The following plan outlines how a small hardware store can survive competition from large discount chains by offering products and providing expert advice in the use of any product it sells. This plan is fictional and has not used to gain funding from a bank or other lending institution.


  • executive summary
  • the business
  • the market
  • sales
  • management
  • goals implementation
  • finance
  • job description-general manager
  • quarterly forecasted balance sheets
  • quarterly forecasted statements of earnings and retained earnings
  • quarterly forecasted statements of changes in financial position
  • financial ratio analysis
  • details for quarterly statements of earnings

EXECUTIVE SUMMARY

Oshkosh Hardware, Inc. is a new corporation which is going to establish a retail hardware store in a strip mall in Oshkosh, Wisconsin. The store will sell hardware of all kinds, quality tools, paint and housewares. The business will make revenue and a profit by servicing its customers not only with needed hardware but also with expert advice in the use of any product it sells.

Oshkosh Hardware, Inc. will be operated by its sole shareholder, James Smith. The company will have a total of four employees. It will sell its products in the local market. Customers will buy our products because we will provide free advice on the use of all of our products and will also furnish a full refund warranty.

Oshkosh Hardware, Inc. will sell its products in the Oshkosh store staffed by three sales representatives. No additional employees will be needed to achieve its short and long range goals. The primary short range goal is to open the store by October 1, 1994. In order to achieve this goal a lease must be signed by July 1, 1994 and the complete inventory ordered by August 1, 1994.

Mr. James Smith will invest $30,000 in the business. In addition the company will have to borrow $150,000 during the first year to cover the investment in inventory, accounts receivable, and furniture and equipment. The company will be profitable after six months of operation and should be able to start repayment of the loan in the second year.

THE BUSINESS

The business will sell hardware of all kinds, quality tools, paint, and housewares. We will purchase our products from three large wholesale buying groups.

In general our customers are homeowners who do their own repair and maintenance, hobbyists, and housewives. Our business is unique in that we will have a complete line of all hardware items and will be able to get special orders by overnight delivery. The business makes revenue and profits by servicing our customers not only with needed hardware but also with expert advice in the use of any product we sell. Our major costs for bringing our products to market are cost of merchandise of 36%, salaries of $45,000, and occupancy costs of $60,000.

Oshkosh Hardware, Inc.'s retail outlet will be located at 1524 Frontage Road, which is in a newly developed retail center of Oshkosh. Our location helps facilitate accessibility from all parts of town and reduces our delivery costs. The store will occupy 7500 square feet of space. The major equipment involved in our business is counters and shelving, a computer, a paint mixing machine, and a truck.

THE MARKET

Oshkosh Hardware, Inc. will operate in the local market. There are 15,000 potential customers in this market area. We have three competitors who control approximately 98% of the market at present. We feel we can capture 25% of the market within the next four years. Our major reason for believing this is that our staff is technically competent to advise our customers in the correct use of all products we sell.

After a careful market analysis we have determined that approximately 60% of our customers are men and 40% are women. The percentage of customers that fall into the following age categories are:

Under 16-0%
17-21-5%
22-30-30%
31-40-30%
41-50-20%
51-60-10%
61-70-5%
Over 70-0%

The reasons our customers prefer our products is our complete knowledge of their use and our full refund warranty.

We get our information about what products our customers want by talking to existing customers. There seems to be an increasing demand for our product. The demand for our product is increasing in size based on the change in population characteristics.

SALES

At Oshkosh Hardware, Inc. we will employ 3 sales people and will not need any additional personnel to achieve our sales goals. These salespeople will need several years experience in home repair and power tool usage. We expect to attract 30% of our customers from newspaper ads, 5% of our customers from local directories, 5% of our customers from the yellow pages, 10% of our customers from family and friends and 50% of our customers from current customers. The most cost effect source will be current customers. In general our industry is growing.

MANAGEMENT

We would evaluate the quality of our management staff as being excellent. Our manager is experienced and very motivated to achieve the various sales and quality assurance objectives we have set. We will use a management information system which produces key inventory, quality assurance and sales data on a weekly basis. All data is compared to previously established goals for that week and deviations are the primary focus of the management staff.

GOALS IMPLEMENTATION

The short term goals of our business are:

  1. Open the store by October 1, 1994
  2. Reach our breakeven point in two months
  3. Have sales of $ 100,000 in the first six months

In order to achieve our first short term goal we must:

  1. Sign the lease by July 1, 1994
  2. Order a complete inventory by August 1, 1994

In order to achieve our second short term goal we must:

  1. Advertise extensively in Sept. and Oct.
  2. Keep expenses to a minimum

In order to achieve our third short term goal we must:

  1. Promote power tool sales for the Christmas season
  2. Keep good customer traffic in Jan. and Feb.

The long term goals for our business are:

  1. Obtain sales volume of $600,000 in three years
  2. Become the largest hardware dealer in the city
  3. Open a second store in Fond du Lac

The most important thing we must do in order to achieve the long term goals for our business is to develop a highly profitable business with excellent cash flow.

FINANCE

Oshkosh Hardware, Inc. Faces some potential threats or risks to our business. They are discount house competition. We believe we can avoid or compensate for this by providing quality products complimented by quality advice on the use of every product we sell. The financial projections we have prepared are located at the end of this document.

JOB DESCRIPTION - GENERAL MANAGER

Sales

The General Manager of the business of the corporation will be the president of the corporation. He will be responsible for the complete operation of the retail hardware store which is owned by the corporation. A detailed description of his duties and responsibilities is as follows:

Train and supervise the three sales people. Develop programs to motivate and compensate these employees. Coordinate advertising and sales promotion effects to achieve sales totals as outlined in budget. Oversee purchasing function and inventory control procedures to insure adequate merchandise at all times at a reasonable cost.

Finance

Prepare monthly and annual budgets. Secure adequate line of credit from local banks. Supervise office personnel to insure timely preparation of records, statements, all government reports, control of receivables and payables and monthly financial statements.

Administration

Perform duties as required in the areas of personnel, building leasing and maintenance, licenses and permits and public relations.

QUARTERLY FORECASTED BALANCE SHEETS

Beg Bal 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Assets
Cash 30,000 418 (463) (3,574) 4,781
Accounts Receivable 0 20,000 13,333 33,333 33,333
Inventory 0 48,000 32,000 80,000 80,000
Other Current Assets 0 0 0 0 0
Total Current Assets 30,000 68,418 44,870 109,759 118,114
Land 0 0 0 0 0
Building & Improvements 0 0 0 0 0
Furniture & Equipment 0 75,000 75,000 75,000 75,000
Total Fixed Assets 0 75,000 75,000 75,000 75,000
Less Accum. Depreciation 0 1,875 3,750 5,625 7,500
Net Fixed Assets 0 73,125 71,250 69,375 67,500
Intangible Assets 0 0 0 0 0
Less Amortization 0 0 0 0 0
Net Intangible Assets 0 0 0 0 0
Other Assets 0 0 0 0 0
Total Assets 30,000 141,543 116,120 179,134 185,614
Liabilities and Shareholders' Equity
Short-Term Debt 0 0 0 0 0
Accounts Payable 0 12,721 10,543 17,077 17,077
Dividends Payable 0 0 0 0 0
Income Taxes Payable 0 (1,031) (2,867) (2,355) (1,843)
Accured Compensation 0 1,867 1,867 1,867 1,867
Other Current Liabilities 0 0 0 0 0
Total Current Liabilities 0 13,557 9,543 16,589 17,101
Long-Term Debt 0 110,000 110,000 160,000 160,000
Other Non-Current Liabilities 0 0 0 0 0
Total Liabilities 0 123,557 119,543 176,589 177,101
Common Stock 30,000 30,000 30,000 30,000 30,000
Retained Earnings 0 (12,014) (33,423) (27,455) (21,487)
Shareholders' Equity 30,000 17,986 (3,423) 2,545 8,513
Total Liabilities & Shareholders' Equity 30,000 141,543 116,120 179,134 185,614

QUARTERLY FORECASTED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Beg Actual 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
Total Sales 0 60,000 40,000 100,000 100,000 300,000
Goods/Services 0 21,600 14,400 36,000 36,000 108,000
Gross Profit 0 38,400 25,600 64,000 64,000 192,000
Operating Expenses 0 47,645 45,045 52,845 52,845 198,380
Fixed Expenses
Interest 0 1,925 1,925 2,800 2,800 9,450
Depreciation 0 1,875 1,875 1,875 1,875 7,500
Amortization 0 0 0 0 0 0
Total Fixed Expenses 0 3,800 3,800 4,675 4,675 16,950
Operating Profit
(Loss) 0 (13,045) (23,245) 6,480 6,480 (23,330)
Other Income
(Expense) 0 0 0 0 0 0
Interest Income
Earnings (Loss) Before Taxes 0 (13,045) (23,245) 6,480 6,480 (23,330)
Income Taxes 0 (1,031) (1,836) 512 512 (1,843)
Net Earnings 0 (12,014) (21,409) 5,968 5,968 (21,487)
Retained Earnings, Beginning 0 0 (12,014) (33,423) (27,455) 0
Less Dividends 0 0 0 0 0 0
Retained Earnings, Ending 0 (12,014) (33,423) (27,455) (21,487) (21,487)

QUARTERLY FORECASTED STATEMENTS OF CHANGES IN FINANCIAL POSITION

Beg Bal 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
Sources (Uses) of Cash
Net Earnings (Loss) 0 (12,014) (21,409) 5,968 5,968 (21,487)
Depreciation & Amortization 0 1,875 1,875 1,875 1,875 7,500
Cash Provided by Operations 0 (10,139) (19,534) 7,834 7,834 (13,987)
Dividends 0 0 0 0 0 0
Cash Provided by (Used For) Changes in
Accounts Receivable 0 (20,000) 6,667 (20,000) 0 (33,333)
Inventory 0 (48,000) 16,000 (48,000) 0 (80,000)
Other Current Assets 0 0 0 0 0 0
Accounts Payable 0 12, 721 (2,178) 6,5340 17,077
Income Taxes 0 (1,031) (1,836) 512 512 (1,843)
Accrued Compensation 0 1,867 0 0 0 1,867
Dividends Payable 0 0 0 0 0 0
Other Current Liabilities 0 0 0 0 0 0
Other Assests 0 0 0 0 0 0
Net Cash Provided by (Used For)
Operating Activities 0 (54,443) 18,653 (60,954) 512 (96,233)
Investment Transactions
Furniture & Equipment 0 (75,000) 0 0 0 (75,000)
Land 0 0 0 0 0 0
Building & Improvements 0 0 0 0 0 0
Intangible Assets 0 0 0 0 0 0
Net Cash From Investment Transactions 0 (75,000) 0 0 0 (75,000)
Financing Transactions
Short-Term Debt 0 0 0 0 0 0
Long-Term Debt 0 110,000 0 50,000 0 160,000
Other Non-Current Liabilities 0 0 0 0 0 0
Sale of Common Stock 30,000 0 0 0 0 0
Net Cash from Financing Transactions 30,000 110,000 0 50,000 0 160,000
Net Increase (Decrease) in Cash 30,000 (29,582) (881) (3,111) 8,355 (25,219)
Cash-Beginning of Period 0 30,000 418 (463) (3,574) 30,000
Cash-End of Period 30,000 418 (463) (3,574) 4,781 4,781

FINANCIAL RATIO ANALYSIS

Beg Act 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Overall Performance
Return on Equity 0.00 (66.80) 625.45 234.50 70.10
Return on Total Assets 0.00 (8.49) (18.44) 3.33 322
Operating Return 0.00 (9.22) (20.02) 3.62 3.49
Profitability Measures
Gross Profit Percent 0.00 64.00 64.00 64.00 64.00
Profit Margin (AIT) 0.00 (20.02) (53.52) 5.97 5.97
Operating Income per Share 0.00 0.00 0.00 0.00 0.00
Earnings per Share 0.00 0.00 0.00 0.00 0.00
Test of Investment Utilization
Asset Turnover 0.00 0.42 034 0.56 0.54
Equity Turnover 0.00 3.34 (11.69) 3929 11.75
Fixed Asset Turnover 0.00 0.82 0.56 1.44 1.48
Average Collection Period 0.00 30.00 30.00 30.00 30.00
Days Inventory 0.00 200.00 200.00 200.00 200.00
Inventory Turnover 0.00 0.45 0.45 0.45 0.45
Working Capital Turns 0.00 1.09 1.13 1.07 0.99
Test of Financial Condition
Current Ratio 0.00 5.05 4.70 6.62 6.91
Quick Ratio 0.00 151 135 1.79 223
Working Capital Ratio 1.00 0.43 0.33 0.57 0.60
Dividend Payout 0.00 0.00 0.00 0.00 0.00
Financial Leverage
Total Assets 1.00 7.87 (33.92) 70.39 21.80
Debt/Equity 0.00 6.87 (34.92) 69.39 20.80
Debt to Total Assets 0.00 0.87 1.03 0.99 0.95
Year-End Equity History
Shares Outstanding 0 0 0 0 0
Market Price per Share
(@20x's earnings)
0.00 0.00 0.00 0.00 0.00
Book Value per Share 0.00 0.00 0.00 0.00 0.00
Altman Analysis Ratio
1.2×(l) 120 0.47 0.37 0.62 0.65
1.4×(2) 0.00 (0.12) (0.40) (0.21) (0.16)
3.3×(3) 0.00 (0.35) (0.72) 0.07 0.07
0.6×(4) 0.00 0.00 0.00 0.00 0.00
1.0×(5) 0.00 0.42 0.34 0.56 0.54
Z Value 120 .042 (.041) 1.04 1.10

DETAILS FOR QUARTERLY STATEMENTS OF EARNINGS

Beg Act 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total %Sales Fixed
Sales
Dollars Sales Forecasted
Product 1 0 60,000 40,000 100,000 100,000 300,000
Product 2 0 0 0 0 0 0
Product 3 0 0 0 0 0 0
Product 4 0 0 0 0 0 0
Product 5 0 0 0 0 0 0
Product 6 0 0 0 0 0 0
Total Sales 0 60,000 40,000 100,000 100,000 300,000
Cost of Sales
Dollar Cost Forecasted
Product 1 0 21,600 14,400 36,000 36,000 108,000 36.00% 0
Product 2 0 0 0 0 0 0 0.00% 0
Product 3 0 0 0 0 0 0 0.00% 0
Product 4 0 0 0 0 0 0 0.00% 0
Product 5 0 0 0 0 0 0 0.00% 0
Product 6 0 0 0 0 0 0 0.00% 0
Total Cost of Sales 0 21,600 14,400 36,000 36,000 108,000
Operating Expenses
Payroll 0 12,000 12,000 12,000 12,000 48,000 0.00% 12,000
Paroll Taxes 0 950 950 950 950 3,800 0.00% 950
Advertising 0 4,800 3,200 8,000 8,000 24,000 8.00% 0
Automobile Expenses 0 0 0 0 0 0.00% 0
Bad Debts 0 0 0 0 0 0 0.00% 0
Commissions 0 3,000 2,000 5,000 5,000 15,000 5.00% 0
Computer Rental 0 1,200 1,200 1,200 1,200 4,800 0.00% 1,200
Computer Supplies 0 220 220 220 220 880 0.00% 220
Computer Maintenance 0 100 100 100 100 400 0.00% 100
Dealer Training 0 1,000 1,000 1,000 1,000 4,000 0.00% 1,000
Electricity 0 3,000 3,000 3,000 3,000 12,000 0.00% 3,000
Employment Ads and Fees 0 0 0 0 0 0 0.00% 0
Entertainment: Business 0 1,500 1,500 1,500 1,500 6,000 0.00% 1,500
General Insurance 0 800 800 800 800 32,000 0.00% 800
Health & W/C Insurance 0 0 0 0 0 0 .00% 0
Interest-LT Debt 0 2,500 2,500 2,500 2,500 10,000 0.00% 2,500
Legal & Accounting 0 1,500 1,500 1,500 1,500 6,000 0.00% 1,500
Maintenance & Repairs 0 460 460 460 460 1,840 0.00% 460
Beg Act 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total %Sales Fixed
Office Supplies 0 270 270 270 270 1,080 0.00% 270
Postage 0 85 85 85 85 340 0.00% 85
Prof. Development 0 0 0 0 0 0 0.00% 0
Professional Fees 0 1,000 1,000 1,000 1,000 4,000 0.00% 1,000
Rent 0 8,000 8,000 8,000 8,0003 2,000 0.00% 8,000
Shows & Conferences 0 0 0 0 0 0 0.00% 0
Subscriptions & Dues 0 285 285 285 285 1,140 0.00% 285
Telephone 0 1,225 1,225 1,225 1,225 4,900 0.00% 1,225
Temporary Employees 0 0 0 0 0 0 0.00% 0
Travel Expenses 0 750 750 750 750 3,000 0.00% 750
Utilities 0 3,000 3,000 3,000 3,000 12,000 0.00% 3,000
Research & Devlpmnt. 0 0 0 0 0 0 0.00% 0
Royalties 0 0 0 0 0 0 0.00% 0
Other 1 0 0 0 0 0 0 0.00% 0
Other 2 0 0 0 0 0 0 0.00% 0
Other 3 0 0 0 0 0 0 0.00% 0
Total Operating Expenses 0 47,645 45,045 52,845 52,845 198,380
Percent of Sales 0.00 79.41 112.61 52.85 52.85 66.13

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