Profit and Loss

Profit and Loss THE SHINE COMPANY INC INCOME AND EXPENSE STATEMENT FOR 2006 Income Cost Gross Profit $1,607,874.59 $383,574.26 $1,224,300.33 Note: This at the current Note on the money Expenses Payroll Expenses Payroll Tax Rent Lease Expense Bank Service Charges Utilities Insurance Repairs Taxes Advertising Professional Fees Office Supplies Telephone Automobile Expenses Signs Uniforms Equipment Rental Alarm and Security Service Licenses and Permits Commission Expenses Contributions Interest Expenses Miscellaneous Total Expenses Net Operating Income Other Income Auto Repair Shop Rental Income Total Additional Income Overall Net Income $593,312.15 $9,221.85 $145,548.00 $15,596.18 $19,713.11 $60,304.89 $28,869.81 $26,570.91 $16,904.96 $12,386.97 $14,917.00 $13,986.00 $6,554.00 $760.00 $3,023.00 $2,605.04 $1,600.00 $377.21 $1,173.00 $0.00 $1,104.90 $62,500.00 $2,072.90 $1,039,101.88 $185,198.45 Expense as a Percent of Total Expenses 57.99% 15.51% 1.90% 5.80% 2.78% 2.56% 1.63% 1.19% 1.44% 1.35% 0.63% 0.07% 0.29% 0.25% 0.15% 0.04% 0.11% 0.00% 0.11% 6.01% 0.20% $47,081.54 $47,081.54 $232,279.99 Net Income as a Percentage of Gross Sales 14.45% Auto Repair Shop Sublease Page 1 Profit and Loss Current “note” if paid off in full would mean total income is $232k above+$383k above, or a total of $615k Expenses by Type Page 2 Profit and Loss Page 3 Profit and Loss Payroll Tax Rent Lease Expense Bank Service Charges Utilities Insurance Type Page 4 Expenses as Percentages Expenses by Type Payroll Tax Rent Lease Expense Bank Service Charges Utilities Insurance 0% 0% 0% 0% 0% 1% 1% 0% 3% 1% 3% 3% 6% 0% Repairs Taxes 14% 33% Advertising Professional Fees Office Supplies Telephone Automobile Expenses Signs 6% 4% 14% 4% Uniforms Equipment Rental 3% Alarm and Security Service Licenses and Permits Commission Expenses Contributions Interest Expenses Miscellaneous Page 5 Potential Return ON Investment Car Wash Analysis on Monthly Basis: Estimated Monthly Expenses Rent Supplies Insurance Labor Maintenance Taxes Advertising Accounting Total Monthly Weekly Expenses $12,129.00 $1,165.50 $2,405.82 $49,442.68 Note: No labor on snow or rain days, so amount is not fixed $2,214.24 $1,408.75 $1,032.25 $1,243.08 $71,041.32 $17,760.33 Income: 46,000/month from 2 entities, oil+wash, not counting AutoRepair Shop, which subleases or retail sales To create break even cash flow, at current fixed expenses, not counting income received from auto repair shop or retail sales volume Based on Point of Sale System averages over last 32 months, the figures are as follows: Oil Change Must Minimally change Car Wash Must Minimally wash 4,200 cars per month 1,400 cars per month To achieve minimum $23,000/month income To achieve minimum $23,000/month income $660,000.00 $750,000.00 $1,410,000.00 On Average, the Oil Changes changes the oil on 22,000 cars per year, at avg ticket price of $30 to achieve On Average, the Car Wash washes 50,000 to 55,000 cars per year, at avg ticket price of $15 to achieve Minimum Retail Sales Cap Rate is Net Operating Income devided by price: Weekly expensesx50 weeks= Minimum Income from Above= Minimm Net Income is: Price is: Cap Rate is NOI/Price= $888,016.46 $1,410,000.00 $521,983.54 $3,500,000.00 14.91% Page 6 FINANCE SCENARIOS Price: $3,500,000.00 Minimal Acceptable downpayment Preffered Downpayment= Interest Rate Term Percentage: 20% 30% 7.50% 15 Years $700,000.00 $1,050,000.00 Seller Finance Options Offer1: Price: $3.5 Million, 7.5% loan , amortized over 15 years. Year1 and Yea2 Interest ONLY. Principal not paid in these years added into loan at year 5 to fully amortize it Price: $3.5 Million, 8% loan, amortized over 15 years Princeipal not paid in Year One due in Year 5 Princeipal not paid in Year Two due in Year 7 Principal not paid in Year Three Due in Year 9 First 3 Years INTEREST ONLY Offer2: Offer3: Price=$3.2 Million. Buyer gets loan for SBA.GOV for 2 Million Buyer has downpyament of $700k. Seller will hold a note for $500k in second position Overall Explanation Price is reduced if buyer gets their own fianncing Bank fianncing by buyer is all cash to seller. Seller gives discount for cash Lower price will be considered, but if seller fianncing, expect a higher interest rate Either price or terms: lower price, or lower downpayment means higher interest rate Monthly Cash flow Model 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 FIXED COST/EXPENSES (MONTHLY) BUSINESS LOAN/Mortgage $7,834.00 Rent/lease $7,600.00 Sales Tax $5,500.00 Payroll tax $2,000.00 Property Tax $1,583.33 Gas/electric/Water/other Utils $7,550.00 Eli's Salary-always paid $2,250.00 Finance Paymnt-copy Machine/Atm Machine/Washer machine $1,700.00 Total Owed= Bank Fees-c.c. Deductions Avg last 12 months $1,450.01 Insurance (Liability and Workman's comp) $1,950.00 Advertising expenses $800.00 Office Supplies $1,000.00 (Phone/Computer/Cable) $850.00 Accountants $700.00 Domestic Uniforms (5 Yr Contract) $300.00 Repairs/Maintenence/Refunds/Give Aways) $2,650.00 Miscellaneous $800.00 Total $46,517.34 Rounded to $46,000 $26,810.00 To Break-Even, Both Business Entities (Lube/Wash) must cover above fixed operating monthly expenses $46,000/2 Entities (lube/wash) each entity must make $23,000 per month each Lube: $23,000/1400 (Average Lubes- monthly) based on Last Year= $16.42 Fixed cost/car Wash: $23,000/4327 (Avrg-Cars Washed monthly) based Last Year=$5.31 Fixed cost/car Note/Analysis Average Number of cars Wash Per Year Average Number of cars Lubed Per Year 51,924.00 16,800.00 Rounded to 52,000 cars per yr washed Rounded to 17,000 cars per year lubed Total Costs/Car (Wash) Analysis Fixed Cost (Monthly): $46,000.00 $46,000/2 Entities (lube/wash) each entity must make $23,000 per month each Page 9 Monthly Cash flow Model Lube: $23,000/1400 (Average Lubes- monthly) based on Last Year= Wash: $23,000/4327 (Avrg-Cars Washed monthly) based Last Year= Formula= Fixed Cost/Car+Labor+Chemicals+Retail= Fixed Cost/Car Labor Chemicals Retail Total Cost Car/Wash $5.31 $6.08 $0.64 $1.08 $13.11 $16.42 Fixed cost/car to lube Car $5.31 Fixed cost/car to Wash car Total Cost/Car (Wash) Note/Analysis: Fixed Cost/car will decrease as volume increases past monthly average of 4,327 washes per month) The opposite holds True, if volume decreases below monthly average (4327 washes) the fixed cost will rise Page 10 Monthly Cash flow Model Total Costs/Car (Lube) Analysis Fixed Cost (Monthly): $46,000.00 $46,000/2 Entities (lube/wash) each entity must make $23,000 per month each Lube: $23,000/1400 (Average Lubes- monthly) based on Last Year= $16.42 Fixed cost/car to lube Car Formula= Fixed cost/Car+cost of Oil+Filter+Labor+Fluids+Wash Fixed Cost/Car Oil Filter Labor Fluids Wash: Total Cost Car/Oil $16.42 $5.00 $1.50 $2.50 $1.00 $1.00 $27.42 Note/Analysis: Fixed Cost/car will decrease as volume increases past monthly average of (1400 lubes) The opposite holds True, if volume decreases below monthly average (1400 lubes) the fixed cost will rise Page 11 Monthly Cash flow Model Formulas to Determine costs Per Car: Labor/Chemicals/Retail 1 Labor Formula: Crew of 10 workers (9 Crew at $6.50/hour=$58.50)+(1 manager x $11.50/hour)= $70/Hour Cashier ($7.00/hour) $7/hour Manager (faciliity) ($14.50/hour) $14.50/hour $91.50 Labor/Hourly= $70+$7.00+$14.50=$91.50 labor expense per hour $91.50/60 minutes Is $1.52 per minute in labor expenses $6.08 effective Labor cost per car $1.52/per minute x 4 (minutes it takes to wash a car)= 2 Chemicals Formula $89,213.00 $2,787.91 $0.64 Total cost of Chemicals over the last 32 months So: $89,213/12 is the Average Monthly expense for cost of chemicals So: $2787 per month in chemicals devided by 4327 Avg Monthly washes=$0.64 cents per car in chemical costs 3 Retail Formula $149,709.00 $4,678.41 $1.08 Total cost of Retail goods over 32 Months Is $149,709 / 32 months is $4,678.00 average per month Is $4678.00 Average per month/4327 Average Monthly Washes=$1.08 Retail expenses Per car So Cost of Retail merchandise is effectively $1.08 when averaged against Monthly washes performed Please Note However, that the retail expense per car is then offset by over the counter purchases of retail goods MAIN IDEA: Car Wash must wash a minimum of 46,000 cars per year Oil Change Must Change Oil at least 17,000 cars per year The average over the last 3 years has been: 46,000 to 55,000 cars washed The average over the last 3 years has been: 17,000 to 20,000 to 22,000 cars per year lubed Page 12