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 job 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 exposit the assumptions that are made .These figures are annual and monthly assumptions that show the consonant harvest-feast of the company.Since the operation is on a monthly collection basis, it is assumed that the majority of the collections pull up stakes 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 property to be managed as well as subjoin in the growth margin percentage.PMS gold flow depends on the monthly collection from property owners. A 25-day grace period is provided after which unpaid reckons 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 lucrement scheme of PMS apply 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 manner such that the owner of the property can pay PMS also on time. This situation is ideal a nd 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$16,380Assumptions just Per-Unit Revenue$200.00Average Per-Unit Variable Cost$425.00Estimated Monthly Fixed Cost$6,000The projected profit and loss for PMS is shown on the following table. Management fees are increasing from almost $624,000 in 2006 to above $701,000 after the second year. The last 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 plotted projections are included in the attached Profit and Loss Table.Pro Forma Profit and Loss20062007 superior Fees$624,000$701,000Direct Cost of Fees$192,000$205,000Other$0$0------------------------Total Cost of Property Managing$192,000$205,000Gross strand$432,000$496,800Gross Margin %69.23%70.87%ExpensesPayroll$120,000$135,000Sales and Marketing and Other Expenses$15,600$16,000Depreciation$3,815$6,500Leased Equipment$15,000$15,000Utilities$8,000$9,000Insurance$9,000$10,500 tutelage$8,500$9775Rent$3,000$4,000Payroll Taxes$18,000$19,700Other$0$0--