The Gravy TruckPOUTINERIE ON WHEELS
Who We AreWhat is The Gravy Truck?
Products
PriceCompetitive Pricing
Poutine ranges from $5.50 to $11Fresh cut fries range from $3.00 to $6.00Beverages cost $2.00 - $3.00Estimated average purchase (Year 1): $10.00
Promotion
Promotion
Profitability
Year 1 Year 2 Year 3 Year 4 Year 5
-4,1396,544
17,62529,066
40,984
Net Income
FeasibilityYear 1 Year 2 Year 3 Year 4 Year 5
Owners’ Salary 60,000 61,500 63,038 64,613 66,229
Dividends - - 15,688
Total Owners’ Compensation
60,000 61,500 63,038 64,613 81,917
Critical Variables
Ride with us on the Gravy Truck!
Capital Budget
Capital Budget 2015
Grumman Step Van and Conversion 33,200
Kitchen Equipment 38,860
Computer Equipment 1,740
Total Capital Budget 73,800
Financial Budget2015
Bank debt 54% 40,000
Equity Investment 46% 33,800
Total 73,800
Cash Flows
Cash Flow Statement
For the year ended 2015 2016 2017 2018 2019
Net Cash Flow (7,075) 226 10,757 21,780 17,571
Cash Bal Beg of Year (7,075) (6,849) 3,908 25,688
Cash Bal End of Year (7,075) (6,849) 3,908 25,688 43,259
Break-Even Analysis
1 2 3 4 50
20
40
60
80
100
120
140
80
96 106116
128
84
90 85 82 79
Year
Num
ber
of C
usto
mer
s pe
r da
y
NPV = $30,654
IRR = 36.3%
Average 5 year Net Income = $18,016
Sensitivity AnalysisCustomers Per Day Average 5 year Profit Net Payback IRR
60 $(5,140) $(28,367) -22.7%
65 $1,425 $(10,116) -3.3%
70 $7,089 $31,093 9.9%
75 $12,606 $78,277 23.6%
80 $18,016 $124,924 36.3%
85 $23,263 $170,758 48%
Sensitivity AnalysisAverage Purchase Average 5 year Profit Net Payback IRR
$8.50 $4,823 $12,712 4.1%
$9.00 $9,355 $50,261 15.6%
$9.50 $13,688 $87,606 26.2%
$10.00 $18,016 $124,924 36.3%
$10.50 $22,225 $161,649 45.7%
$11.00 $26,377 $198,087 54.7%
Risk Factors
# of customers per day most critical Location planning and execution Average purchase price Increase in competition Weather conditions Ineffective marketing activities