PMS Financial Plan Essay Example | Topics and Well Written Essays - 1000 words

PMS Financial Plan - Essay ExampleThe most important factor in our case is the continuous military control of the properties. Therefore, there is a need to develop an effective strategy to deliver the services such as repairs and maintenance.The following table details the assumptions that are do .These figures are annual and monthly assumptions that show the consistent growth of the company.Since the operation is on a monthly collection basis, it is assumed that the majority of the collections leave behind be timely and in full.The following chart indicates our financial indicators for the first two years of operation. PMS foresees growth in both in customers who want their shoes to be managed as well as increase in the growth margin percentage.PMS hard currency flow depends on the monthly collection from property owners. A 25-day grace period is provided after which unpaying accounts will inhibit our cash flow. However, the monthly basis of cash flow should maintain the steady level of cash flow.The following table and the accompanying chart details the break-even analysis for this project. The projected fixed prices will be $6,000 per month with a variable per-unit cost of $200 which shall be ideally accounted for by 28 properties that is rented at $3,000 per month. The payment scheme of PMS using this rent figure will then be $1500 for the 1st month that the unit is occupied by a tenant or 50% of the rent. A 10% rent management commission or $300 fee starting from the first month until the tenant occupies the unit shall also be collected. To account for the fact that the $1500 will only be paid on the first month and that the break-even analysis is on a per month basis, the total fee collected by the PMS for each month would be $300 plus $ 125 ( $1500 / 12 months). Thus the total fee is $425 per month.The break-even assumes that all rent shall be paid in a timely way such that the owner of the property can pay PMS also on time. This situation is idea l and as such, it is expected that the initial break-even per unit will likely be higher.Break-even AnalysisMonthly Units Break-even10Monthly Revenue Break-even$16,380AssumptionsAverage Per-Unit Revenue$200.00Average Per-Unit Variable make up$425.00Estimated Monthly Fixed Cost$6,000The projected profit and loss for PMS is shown on the following table. Management fees are increasing from about $624,000 in 2006 to above $701,000 after the secondly year. The pass profit for the first year alone amounts to $160,000. The projected gross margin will be about 69% for the first year. The net profit for the second year is seen to be above 20%The planned projections are included in the attached Profit and Loss Table.Pro Forma Profit and Loss20062007professional person Fees$624,000$701,000Direct Cost of Fees$192,000$205,000Other$0$0------------------------Total Cost of Property Managing$192,000$205,000Gross Margin$432,000$496,800Gross Margin %69.23%70.87%ExpensesPayroll$120,000$135,000Sales and selling and Other Expenses$15,600$16,000Depreciation$3,815$6,500Leased Equipment$15,000$15,000Utilities$8,000$9,000Insurance$9,000$10,500Maintenance$8,500$9775Rent$3,000$4,000Payroll Taxes$18,000$19,700Other$0$0--