• Consulting revenue will make up approximately 85 to 90 percent of total revenue, with the rest coming from service revenue.
• Salaries and rent are the two major expenses, while depreciation is another significant cost that will increase as the company develops. Although the purchasing of fitness, medical, and office equipment is expensive, constant replacement will be needed to minimize depreciation costs and maintain a competitive edge.
• In order to maintain steady gross margins, salaries and advertising expenses are not likely to increase within the first two years of operation, unless cash flows significantly increase.

Three assumptions for Corporate Fitness are:

1. A constantly growing economy without any major recession or boom.
2. No unpredictable changes in fitness, medical, or office equipment.
3. No major national or global events that threaten the stability and health of the country and its citizens.

The most important financial indicators are net increase in cash and net income. Net increase from cash will exemplify the relationship between net income and net cash from operating activities. The greater the increase is, Corporate Fitness has that level of financial strength at that point in time.

Corporate Fitness' break-even point is at 1667 units each month with monthly sales at $16,667. Sales forecasts indicate that units sold and monthly sales are expected to be much greater than the break-even point mentioned in the table.

Sales are predicted to increase each month with annual sales totaling close to $540,000. Gross margin, likewise, is expected to increase in correlation, ending at close to 94% for 1995.

Compared to total sales, net profit will increase each month and is predicted to increase for 1995 through 1997.

With cash flow increasing significantly and expenses remaining relatively static with only minimal increases, cash flow will experience a similar increase for each period of financial evaluation.

Cash flow is expected to more than double from just over $230,000 in 1995 up to over $342,000 for 1996, with corresponding cash balances of $240,000 and $583,000.

The balance sheet indicates that at the end of the first year of operation, net worth will be positive and constantly increasing to the point of $302,000 by the end of 1996.

The following table outlines some of Corporate Fitness' more important business ratios. The final column, Industry Profile, details specific ratios based on the Physical Fitness Facilities industry as it is classified by the Standard Industry Classification (SIC) code, 7991. These ratios indicate strong financial growth and an impressive chance for investment opportunities, making expansion and further development both very possible.