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Furniture Manufacturing Business Plan Example

Business plan

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0% found this document useful (0 votes)
192 views51 pages

Furniture Manufacturing Business Plan Example

Business plan

Uploaded by

sonamkids127
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 51

Furniture Company

Business
Plan
[YEAR]

Crafted by highly specialized workers


Information provided in this business plan is unique to this business and
confidential; therefore, anyone reading this plan agrees not to disclose any of the
information in this business plan without prior written permission of the Company

10200 Bolsa Ave, Westminster, CA,


Prepared By 92683

John Doe [email protected]

(650) 359-3153 https://example.com


Table of Contents

Executive Summary 5
Business Overview 6
Mission 6
Objectives 6
Success Factors 7
Financial Highlights 7
3 Year profit forecast 7

Business
Description 9
Ownership 10
Start-up Summary 10
Startup cost 10

Funding Required 11

Products and Services 12


Products and services 13

Market Analysis 15
Market Trends 16
Target Market Segment Strategy 16
Marketing share 16

Industry Analysis 17
Competition and Buying Patterns 17

Strategy 18
Competitive Edge 19
Sales Strategy 19
Sales Forecast 19

Sales Yearly 20

Detailed Sales Forecast 20

Milestones 21

Furniture Company | Business Plan [YEAR] 2/34


Management Summary 22
Personnel Plan 23

Financial Plan 24
Important Assumptions 25
Brake-even Analysis 25
Projected Profit and Loss 26
Projected Cash Flow 29
Projected Balance Sheet 30
Business Ratios 31
Furniture Company | Business Plan [YEAR]

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through each section of your plan as a business mentor.
1.

Executive Summary
Business Overview
Mission
Objectives
Success Factors
Financial Highlights

Furniture Company | Business Plan [YEAR]

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Before you think about how to start furniture manufacturing services,
you must create a detailed furniture manufacturing business plan. It
will not only guide you in the initial phases of your startup but will also
help you later on.
To unlock help try Upmetrics! 

Business Overview

 Carpentaria

Carpentaria Furniture is a standard and registered furniture manufacturing that will be


located in Sharonville - Ohio; in an ideal location highly suitable for the kind of business
we want to establish. A company specializing in custom cabinets for the high-end
residential, resort, and
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Mission

 Carpentaria

To deliver a high-quality product, on time and within budget while also


providing a fast, error-free ordering system.
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Objectives

 Carpentaria

The company objectives are:

• To be a top cabinet supplier to luxury homes in the regional market.


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Furniture Company | Business Plan [YEAR]

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Success Factors

 Carpentaria

Carpentaria Furniture is uniquely qualified to succeed for the following reasons:

• There is currently no furniture store devoted to local manufacture in the


community we
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Financial Highlights

 Carpentaria

The company owners have provided the capital to cover start-up expenses.
Upmetrics!
The company currently seeks a 3-year commercial loan to cover the operating
expenses. Specifically, these funds will be used as follows:

Start writing here..

3 Year profit forecast

Financial Year Sales Gross Margin Net Profit

Year1 10,000 500 6,000

Year2 12,000 800 8,000


Furniture Company | Business Plan [YEAR] 7/34
Financial Year Sales Gross Margin Net Profit

Year3 14,000 1,200 10,000

FY 1 FY 2 FY 3 FY 4 FY 5

Revenue $1,080,000 $2,472,768 $2,830,825 $3,240,728 $3,709,986

Total Expenses $962,000 $1,539,107 $1,719,742 $1,901,321 $2,112,641

EBITDA $118,000 $933,661 $1,111,082 $1,339,407 $1,597,344

Depreciation $25,600 $25,600 $25,600 $25,600 $25,600

EBIT $92,400 $908,061 $1,085,482 $1,313,807 $1,571,744

Interest $29,946 $26,202 $22,459 $18,716 $14,973

Pre Tax Income $62,455 $881,858 $1,063,023 $1,295,091 $1,556,772

Income Tax Expense $21,859 $308,650 $372,058 $453,282 $544,870

Net Income $40,595 $573,208 $690,965 $841,809 $1,011,902

Number of locations 1 1 1 1 1

Average customers/day 20 22 23 25 27

Number of orders 3,600 7,776 8,398 9,070 9,796

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2.

Business Description
Ownership
Start-up Summary
Funding Required

Furniture Company | Business Plan [YEAR]

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Ownership

 Carpentaria

Carpentaria Furniture will be owned and operated by Bill Moore who has been in the
furniture industry for the last 20 years. Bill has been planning this startup for the last
couple of years and, thus, has all resources including the right knowledge for starting
a furniture company.
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Start-up Summary

 Carpentaria

Total start-up expenses, including tools, software, stationery, and related expenses are
shown below. Bill Moore will provide the bulk of the start-up financing. At the same time,
the company plans to receive a 3-year commercial loan facility, which will help meet the
cash flow
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Startup cost

Cost distribution Amount

Expenses 1,550

Assets 1,800
Furniture Company | Business Plan [YEAR]

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Cost distribution

Amount

Investment 2,050

Funding Required
The detailed startup requirements and expenses are given in the table below.

START-UP REQUIREMENTS AMOUNT

Business Cards $100

Drill Press $1,916

Cabinet Jacks $713

Kitchen Builder Software $2,495

Lateral File $236

Sign $1,154

Seat Cushions $338

Phone Transfer $64

First/Last/ Deposit $2,400

Marketing $4,430

Level Package $1,005

Sure Trak Software $499

Estimating Database $2,200

Software Lease Buyout $7,092

TOTAL START-UP EXPENSES $24,642

Start-up Assets

Cash Required $89,299

Other Current Assets $14,478

Long-term Assets $0

TOTAL ASSETS $103,777

Total Requirements $128,419


Furniture Company | Business Plan [YEAR]

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3.

Products and Services


Products and services

Furniture Company | Business Plan [YEAR]

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Before starting a furniture manufacturing business, you must take
many things into consideration such as you must consider what types
of furniture services will you be providing to your customers. Deciding
your services is
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 Carpentaria

The Wood House will be manufacturing the following supreme-class furniture


products for its customers:
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Products and services

Single and double Sofas and luxury


beds wooden chairs

Study and dining


Drawers and chests
tables

Desks and office Bookcases and


chairs cabinets
Furniture Company | Business Plan [YEAR]

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 Carpentaria

Bill has started the furniture business to introduce space-efficient foldable furniture
products for minimizing space usage along with the commercial production of usual
furniture products. The company will also offer repair and maintenance services like
polishing and glazing of old
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4.

Market Analysis
Market Trends
Target Market Segment Strategy
Industry Analysis

Furniture Company | Business Plan [YEAR]

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The most important component of an effective furniture
manufacturing business plan is its accurate marketing analysis. If
you are starting on a
smaller scale, you can do marketing analysis yourself by taking help from this
To unlock help try Upmetrics! 

Market Trends

 Carpentaria

Carpentaria Furniture will be focusing on architects, owners, and contractors


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Upmetrics!
in the regional area who are involved in the high-end residential, resort, and
commercial development segments.

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Target Market Segment Strategy

 Carpentaria

Carpentaria Furniture will be focusing on contacting contractors and architects


that deal with the luxury home market. Making ourselves known to these
entities will generate some strong leads, along with getting personal
recommendations to the home owners.
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Marketing share
Furniture Company | Business Plan [YEAR] 16/34
Segments Market share

High-end Residential 40

Mid-Range Residential 15

Commercial Development 45

Growt Year
Potential Customers h 1 Year 2 Year 3 Year 4 Year 5 CAGR

High-end residential 3% 5,260 5,418 5,581 5,748 5,920 3.00%

Mid-range residential 5% 3,500 3,675 3,859 4,052 4,255 5.00%


Commercial
development 7% 10,000 10,700 11,449 12,250 13,108 7.00%

Total 5.55% 18,760 19,793 20,889 22,050 23,283 5.55%

Industry Analysis

 Carpentaria

There are two main types of cabinet suppliers in the industry.

• Resellers of complete cabinet sets using stock items where the cabinets turn up
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 Carpentaria

The high-end cabinet market understands the concept of service and support and
is more likely to pay for it when the offering is clearly stated.
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Competition and Buying Patterns

Start writing here..


Furniture Company | Business Plan [YEAR]

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5.

Strategy
Competitive Edge
Sales Strategy
Milestones

Furniture Company | Business Plan [YEAR]

18/34
After identifying the market demand, market trends, and the potential
customers of the startup, the next step is to define an effective strategy
for attracting those customers. Like marketing analysis, sales strategy
is also an
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 Carpentaria

Sharonville, Ohio is experiencing steady growth in the high-end residential markets and
there is a consensus of continued growth in the area. Taking part in this growth, while
providing attention to the design development, ordering process, project management,
and installation
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Competitive Edge

 Carpentaria

Our competitive edge is our ability to provide high volumes and flexibility
in style while maintaining a quality product backed by excellent service.
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Sales Strategy

 Carpentaria

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Upmetrics!
Our sales strategy is to make ourselves known through mailings, print
advertising, and personal contact with architects and contractors who are
primarily involved with the design/construction of commercial development and
luxury homes.

Start writing here..

Sales Forecast

The following table shows the projected cabinet sales. As the company gets established
in the market, we anticipate strong sales growth over the next three years.
Furniture Company | Business Plan [YEAR]

19/34
Sales Yearly

Financial Year Cabinets Other

Year1 158,745 895,665

Year2 164,548 1,004,512

Year3 186,541 1,245,587

Detailed Sales Forecast

Detailed sales forecast data is provided in below table:

SALES FORECAST YEAR 1 YEAR 2 YEAR 3

Sales

Cabinets $442,000 $1,000,000 $1,500,000

Other $0 $0 $0

TOTAL SALES $442,000 $1,000,000 $1,500,000

Direct Cost of Sales

Cabinets $301,600 $725,000 $1,087,500

Other $0 $0 $0

Subtotal Direct Cost of Sales $301,600 $725,000 $1,087,500

Furniture Company | Business Plan [YEAR]

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Milestones
The accompanying table lists important program milestones, with dates and managers in
charge, and budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.

Start End Budge Departme


Milestone Date t Manager nt
Date

Brent &
Business Plan 1/15/2020 1/31/2020 $2,000 Marketing
Marty

Online Research 1/15/2020 1/19/2020 $350 Brent Marketing

Open Accounts with


1/15/2020 1/26/2020 $350 Brent Web
Suppliers

Brent &
Door Research 1/15/2020 1/26/2020 $500 Web
Marty

Design Doors 1/15/2020 1/26/2020 $450 Marty Department

Order Sample Doors 1/22/2020 2/01/2020 $1,000 Marty Department

Brent &
Design of Sales Literature 1/22/2020 1/31/2020 $1,000 Department
Marty

Print Sales Literature 2/01/2020 2/07/2020 $300 Brent Department

Marty &
Make Industry Contacts 1/15/2020 2/28/2020 $1,000 Department
Brent
Showroom Feasibility Marty &
Study 1/25/2020 1/31/2020 $1,000 Department
Brent

Totals $7,950
Furniture Company | Business Plan [YEAR]

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6.

Management Summary
Personnel Plan

Furniture Company | Business Plan [YEAR]

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The management plan is also an important component of a
furniture manufacturing business plan since it gives you an
estimate of the staff
required for your startup as well as the costs incurred on their salaries. So,
To unlock help try Upmetrics! 

 Carpentaria

Bill Moore, the President, has 20 years of construction experience, from


general contracting, construction management, and having his own cabinet
business.
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Personnel Plan
This table shows salaries for the whole company. Salary increases are kept to a
minimum to help the growth of the company. An administrative assistant will be hired
later in the year.

Monthly details for this year can be found in the appendix.

PERSONNEL PLAN YEAR 1 YEAR 2 YEAR 3

Bill Moore $24,000 $38,000 $45,000

Managers $24,000 $35,000 $40,000

Carpenters $18,000 $60,000 $85,000

Administration Assistant $12,000 $24,000 $25,000

TOTAL PEOPLE 4 6 7

Total Payroll $78,000 $157,000 $195,000


Furniture Company | Business Plan [YEAR]

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7.

Financial Plan
Important Assumptions
Brake-even Analysis
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Business Ratios

Furniture Company | Business Plan [YEAR]

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The last component of a furniture manufacturing business plan is an in-
depth financial plan. The financial plan crafts a detailed map of all the
expenses needed for the startup and how these expenses will be met by
the earned
To unlock help try Upmetrics! 

 Carpentaria

Below are the initial financial goals for the company:

• Obtain an operating line of credit from a financial institution.


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Important Assumptions
The financial projections of the company are forecast on the basis of the following
assumptions. These assumptions are quite conservative and are expected to show
deviation but to a limited level such that the company’s major financial strategy will
not be affected.

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10,00% 11,00% 12,00%

Long-term Interest Rate 10,00% 10,00% 10,00%

Tax Rate 26,42% 27,76% 28,12%

Other 0 0 0

Brake-even Analysis

Monthly Units Break-even 5530

Monthly Revenue Break-even $159 740

Assumptions:

Average Per-Unit Revenue $260,87

Average Per-Unit Variable Cost $0,89

Estimated Monthly Fixed Cost $196 410


Furniture Company | Business Plan [YEAR]

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Projected Profit and Loss

2024 2025 2026

Revenue $2,378,195 $3,244,874 $4,682,523

Residential Furniture Sales $1,064,395 $1,517,600 $2,163,715

Unit Sales 2,129 3,035 4,327

Unit Price $500 $500 $500

Commercial Furniture
$1,043,320 $1,294,152 $1,825,328
Sales

Unit Sales 1,304 1,618 2,282

Unit Price $800 $800 $800

Custom Furniture $270,480 $433,122 $693,480

Unit Sales 451 722 1,156

Unit Price $600 $600 $600

Cost Of Sales $207,563.58 $257,601.13 $324,020.92

General Costs $207,563.58 $257,601.13 $324,020.92

Raw Materials $73,642.61 $104,574.36 $148,562.24

Wood $70,960.25 $101,172.63 $144,248.22

Fabric $2,682.36 $3,401.73 $4,314.02

Manufacturing Supplies $133,920.97 $153,026.77 $175,458.68

Hardware $126,825.01 $142,909.63 $161,034.10

Finishing Supplies $7,095.96 $10,117.14 $14,424.58

Revenue Specific Costs $0 $0 $0

Personnel Costs (Direct


$0 $0 $0
Labor)

Gross Margin $2,170,631.42 $2,987,272.87 $4,358,502.08

Furniture Company | Business Plan [YEAR] 26/34


2024 2025 2026

Gross Margin (%) 91.27% 92.06% 93.08%

Operating Expense $2,181,884.01 $2,307,339.82 $2,445,481.94

Payroll Expense (Indirect


$1,441,860 $1,473,462.60 $1,505,848.20
Labor)

Production Team $944,160 $960,062.40 $976,237.92

Carpenter $596,160 $605,102.40 $614,178.72

Finisher $348,000 $354,960 $362,059.20

Sales and Marketing $399,420 $412,561.80 $426,144.48

Sales Associate $283,500 $292,005 $300,765.36

Marketing Manager $115,920 $120,556.80 $125,379.12

Administration $98,280 $100,838.40 $103,465.80

Office Administrator $39,000 $39,780 $40,575.60

HR Specialist $59,280 $61,058.40 $62,890.20

General Expense $740,024.01 $833,877.22 $939,633.74

Facility Costs $69,753.65 $78,600 $88,568.62

Rent $50,729.93 $57,163.66 $64,413.56

Utilities $19,023.72 $21,436.34 $24,155.06

Marketing and Sales $659,490.16 $743,129.83 $837,377.08

Advertising $25,364.99 $28,581.81 $32,206.53

Sales Commissions $634,125.17 $714,548.02 $805,170.55

Operational Costs $10,780.20 $12,147.39 $13,688.04

Equipment Maintenance $10,145.95 $11,432.68 $12,882.69

Shipping and Handling $634.25 $714.71 $805.35

Bad Debt $0 $0 $0
Furniture Company | Business Plan [YEAR]

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2024 2025 2026

Amortization of
$0 $0 $0
Current Assets

EBITDA ($11,252.59) $679,933.05


$1,913,020.14

Additional Expense
$82,757.0
Long Term Depreciation 9 $70,897.87 $58,352.62

Gain or loss from Sale $42,000 $42,000 $42,000


of Assets
$0 $0 $0
EBIT
($53,252.59
Interest Expense ) $637,933.05 $1,871,020.14

EBT $40,757.10 $28,897.89 $16,352.62


($94,009.68
Income Tax ) $609,035.18 $1,854,667.52
Expense / Benefit
$0 $0 $0

Total Expense

Net Income $2,472,204.


68 $2,635,838.82 $2,827,855.48
Net Income (%) ($94,009.68
) $609,035.18 $1,854,667.52

(3.95%) 18.77% 39.61%


Retained Earning Opening

Owner's Distribution
$0 ($174,009.68) $435,025.50
Retained Earning Closing
$80,000 $0 $0
($174,009.6
8) $435,025.50 $2,289,693.02
Furniture Company | Business Plan [YEAR]

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Projected Cash Flow

2024 2025 2026

Cash Received $2,378,195 $3,244,874 $4,682,523

Cash Paid $2,430,204.68 $2,593,838.82 $2,785,855.48

COS & General Expenses $947,587.59 $1,091,478.35 $1,263,654.66

Salary & Wages $1,441,860 $1,473,462.60 $1,505,848.20

Interest $40,757.10 $28,897.89 $16,352.62

Sales Tax $0 $0 $0

Income Tax $0 $0 $0

Net Cash From


($52,009.68) $651,035.18 $1,896,667.52
Operations

Assets Sell $0 $0 $0

Assets Purchase $700,000 $0 $0

Net Cash From


($700,000) $0 $0
Investments

Amount Received $800,000 $0 $0

Loan Received $800,000 $0 $0

Common Stock $0 $0 $0

Preferred Stock $0 $0 $0

Owner's Contribution $0 $0 $0

Amount Paid $290,352.63 $222,211.85 $234,757.04

Loan Capital $210,352.62 $222,211.83 $234,757.04

Dividends & Distributions $80,000 $0 $0

Net Cash From


$509,647.37 ($222,211.85) ($234,757.04)
Financing

Furniture Company | Business Plan [YEAR] 29/34


2024 2025 2026

Summary

Starting Cash $0 ($242,362.31) $186,461.02

Cash In $3,178,195 $3,244,874 $4,682,523


$3,420,557.3
Cash Out 1 $2,816,050.67 $3,020,612.52
($242,362.31
Change in Cash ) $428,823.33 $1,661,910.48
($242,362.3
Ending Cash 1) $186,461.02 $1,848,371.50

Projected Balance
Sheet

2024 2025 2026

Assets $415,637.69 $802,461.02 $2,422,371.50


($242,362.31
Current Assets ) $186,461.02 $1,848,371.50

Cash ($242,362.31) $186,461.02 $1,848,371.50

Accounts Receivable $0 $0 $0

Inventory $0 $0 $0

Other Current Assets $0 $0 $0

Long Term Assets $658,000 $616,000 $574,000

Gross Long Term Assets $700,000 $700,000 $700,000

Accumulated Depreciation ($42,000) ($84,000) ($126,000)

Liabilities & Equity $415,637.69 $802,461.04 $2,422,371.52

Liabilities $589,647.37 $367,435.54 $132,678.50

Current Liabilities $222,211.83 $234,757.04 $0

Accounts Payable $0 $0 $0

Income Tax Payable $0 $0 $0

Furniture Company | Business Plan [YEAR] 30/34


2024 2025 2026

Sales Tax Payable $0 $0 $0

Short Term Debt $222,211.83 $234,757.04 $0

Long Term Liabilities $367,435.54 $132,678.50 $132,678.50

Long Term Debt $367,435.54 $132,678.50 $132,678.50

Equity ($174,009.68) $435,025.50 $2,289,693.02

Paid-in Capital $0 $0 $0

Common Stock $0 $0 $0

Preferred Stock $0 $0 $0

Owner's Contribution $0 $0 $0

Retained Earnings ($174,009.68) $435,025.50 $2,289,693.02

Check $0 $0 $0

Business Ratios
Industry
Year 1 Year 2 Year 3 Profile

Sales Growth 4,35% 30,82% 63,29% 4,00%

Percent of Total Assets

Accounts Receivable 5,61% 4,71% 3,81% 9,70%

Inventory 1,85% 1,82% 1,79% 9,80%

Other Current Assets 1,75% 2,02% 2,29% 27,40%


150,99
Total Current Assets 138,53% % 163,45% 54,60%
-
Long-term Assets -9,47% 21,01% -32,55% 58,40%
100,00
TOTAL ASSETS 100,00% % 100,00% 100,00%

Current Liabilities 4,68% 3,04% 2,76% 27,30%

Long-term Liabilities 0,00% 0,00% 0,00% 25,80%

Total Liabilities 4,68% 3,04% 2,76% 54,10%


Furniture Company | Business Plan [YEAR] 31/34
Industry
Year 1 Year 2 Year 3 Profile

NET WORTH 99,32% 101,04% 102,76% 44,90%

Percent of Sales

Sales 100,00% 100,00% 100,00% 100,00%

Gross Margin 94,18% 93,85% 93,52% 0,00%

Selling, General & Administrative


74,29% 71,83% 69,37% 65,20%
Expenses

Advertising Expenses 2,06% 1,11% 0,28% 1,40%

Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%

Main Ratios

Current 25,86 29,39 32,92 1,63

Quick 25,4 28,88 32,36 0,84

Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%

Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%

Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%

Additional Ratios

Net Profit Margin 19,20% 21,16% 23,12% N.A.

Return on Equity 47,79% 50,53% 53,27% N.A.

Activity Ratios

Accounts Receivable Turnover 4,56 4,56 4,56 N.A.

Collection Days 92 99 106 N.A.

Inventory Turnover 19,7 22,55 25,4 N.A.

Accounts Payable Turnover 14,17 14,67 15,17 N.A.

Payment Days 27 27 27 N.A.

Total Asset Turnover 1,84 1,55 1,26 N.A.

Debt Ratios

Debt to Net Worth 0 -0,02 -0,04 N.A.

Current Liab. to Liab. 1 1 1 N.A.

Liquidity Ratios

Furniture Company | Business Plan [YEAR] 32/34


Industry
Year 1 Year 2 Year 3 Profile
$140 $160
Net Working Capital $120 943 664 385 N.A.

Interest Coverage 0 0 0 N.A.

Additional Ratios

Assets to Sales 0,45 0,48 0,51 N.A.

Current Debt/Total Assets 4% 3% 2% N.A.

Acid Test 23,66 27,01 30,36 N.A.

Sales/Net Worth 1,68 1,29 0,9 N.A.

Dividend Payout 0 0 0 N.A.


Furniture Company | Business Plan [YEAR]

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