Please excuse my absence over the past weeks, I have had too many things bothering me and lost focus of our last two weeks. We are working in the Financing section of the business plan and are going to cover projected Profit and Loss Statements (P&L), projected Cash Flow Statement, and projected Balance Sheet. These documents form the cornerstone of your business plan and further underscore your understanding of what it takes to run a successful business. As I mentioned previously, if this is a start up business, you need to use industry norms as the basis for your sales and projected growth.
Projected Profit and Loss Statement
A profit and loss statement shows the disbursement of all expesnses incurred in the operating your business during the prior year against net sales. Since we are discussing your first year, you are going to use projected figures, which will be compared to in years two and three. The bottom line of the atatement shows a net profit or net loss for the year.
| Pro Forma Profit and Loss | |||
| FY 2002 | FY 2003 | FY 2004 | |
| Sales | $501,200 | $576,380 | $662,837 |
| Direct Costs of Goods | $177,680 | $204,332 | $234,982 |
| Other | $0 | $0 | $0 |
| ———— | ———— | ———— | |
| Cost of Goods Sold | $177,680 | $204,332 | $234,982 |
| Gross Margin | $323,520 | $372,048 | $427,855 |
| Gross Margin % | 64.55% | 64.55% | 64.55% |
| Expenses | |||
| Payroll | $123,900 | $135,450 | $162,828 |
| Sales and Marketing and Other Expenses | $24,866 | $27,420 | $30,521 |
| Depreciation | $12,000 | $13,500 | $15,000 |
| Leased Equipment | $1,800 | $1,800 | $1,800 |
| Utilities | $3,600 | $3,600 | $3,780 |
| Insurance | $4,200 | $4,500 | $4,725 |
| Rent | $88,000 | $88,000 | $88,000 |
| Payroll Taxes | $30,975 | $33,863 | $40,707 |
| Other | $0 | $0 | $0 |
| ———— | ———— | ———— | |
| Total Operating Expenses | $289,341 | $308,132 | $347,361 |
| Profit Before Interest and Taxes | $34,179 | $63,916 | $80,494 |
| EBITDA | $46,179 | $77,416 | $95,494 |
| Interest Expense | $8,433 | $6,730 | $5,040 |
| Taxes Incurred | $6,445 | $14,296 | $19,178 |
| Net Profit | $19,302 | $42,889 | $56,276 |
| Net Profit/Sales | 3.85% | 7.44% | 8.49% |
Monthly Statement
Because the P&L statement is a operations document, you should produce it monthly; that way unfavorable financial trends will be identified early before they get out of control. It is also a good practice to transfer your monthly data into a spreadsheet. This will give you the ability to use a graph for a quick diagnosis before reading the detailed statements. Most accounting software such as Quickbooks Pro will give you that functionality.
Year to Date Statement
In addition to the monthly statements, you should submit a year to date analysis that shows the trends in both sales and expenses. The YTD statement is simply a compilation of your monthly statements to that point.
Projected Cash Flow Statement
The Cash Flow statement provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter. It is calculated by adding noncash charges (such as depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business as a whole. Cash flow can be used as an indication of a company’s financial strength.
| Pro Forma Cash Flow | |||
| FY 2002 | FY 2003 | FY 2004 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $501,200 | $576,380 | $662,837 |
| Subtotal Cash from Operations | $501,200 | $576,380 | $662,837 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $8,000 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| Subtotal Cash Received | $509,200 | $576,380 | $662,837 |
| Expenditures | FY 2002 | FY 2003 | FY 2004 |
| Expenditures from Operations | |||
| Cash Spending | $123,900 | $135,450 | $162,828 |
| Bill Payments | $335,368 | $377,512 | $426,127 |
| Subtotal Spent on Operations | $459,268 | $512,962 | $588,955 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $1,800 | $200 | $0 |
| Other Liabilities Principal Repayment | $10,000 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $22,000 | $24,000 | $24,000 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $1,200 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $494,268 | $537,162 | $612,955 |
| Net Cash Flow | $14,932 | $39,218 | $49,882 |
| Cash Balance | $109,932 | $149,150 | $199,033 |
Projected Balance Sheet
A Balance Sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders’ Equity
Balance Sheet
| Pro Forma Balance Sheet | |||
| FY 2002 | FY 2003 | FY 2004 | |
| Assets | |||
| Current Assets | |||
| Cash | $109,932 | $149,150 | $199,033 |
| Inventory | $16,748 | $19,260 | $22,149 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $126,680 | $168,410 | $221,181 |
| Long-term Assets | |||
| Long-term Assets | $62,700 | $62,700 | $62,700 |
| Accumulated Depreciation | $12,000 | $25,500 | $40,500 |
| Total Long-term Assets | $50,700 | $37,200 | $22,200 |
| Total Assets | $177,380 | $205,610 | $243,381 |
| Liabilities and Capital | FY 2002 | FY 2003 | FY 2004 |
| Current Liabilities | |||
| Accounts Payable | $19,303 | $47,719 | $53,214 |
| Current Borrowing | $200 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $19,503 | $47,719 | $53,214 |
| Long-term Liabilities | $108,000 | $84,000 | $60,000 |
| Total Liabilities | $127,503 | $131,719 | $113,214 |
| Paid-in Capital | $25,000 | $25,000 | $25,000 |
| Retained Earnings | ($13,300) | $6,002 | $48,891 |
| Earnings | $19,302 | $42,889 | $56,276 |
| Total Capital | $31,002 | $73,891 | $130,167 |
| Total Liabilities and Capital | $158,505 | $205,610 | $243,381 |
| Net Worth | $49,876 | $73,891 | $130,167 |
The balance sheet is one of the most important pieces of financial information issued by a company. It is a snapshot of what a company owns and owes at that point in time. The income statement, on the other hand, shows how much revenue and profit a company has generated over a certain period. Neither statement is better than the other - rather, the financial statements are built to be used together to present a complete picture of a company’s finances.
price viagra pharmacy online phentermine online description price best price 100mg viagra and overnight price of generic meridia effexor and topamax interactions aqnd anxiety buy sildenafil citrate lithium order the drug zyban cheap phentermine no rxx buy xanax prescription consultation overnight delivery buy flomax cheap phentermine online visa order xanax on br phentermine prescription amount soma cheap mastercard viagra equivalent for women online pharmacy and sildenafil citrate 25mg mexican pharmacy soma buy overnight phentermine 1 cialis tadalafil jpg buy hydrocodone onlin phentermine cheap online pharmacy buy generic meridia 15mg hashish tiny plastic bags cardinal health diet phentermine pill viagra to buy uk phentermine delivered cod no prescription buy diazepam valium phentermine 37.5 physician buy phentermine no perscription generic viagra buy online buy xenical at local drugstore phentermine discount no prescription phentramine klonopin ambien 37.5 phentermine online what is the generic for phentermine zenegra mexican sildenafil citrate viagra canada pharmacy buy phentermine now carisoprodol phenthermine yellow prescription phentermine online phentermine buy phentermine buy phentermine hcl online phentermine with no prior prescription needed phentermine 37.5 for cheap discount phentermine to florida generic cialis tadalafil fioricet information weight loss pill xanax purchase overnight is soma an opiate drug free free pill viagra online phentermine detailed information about phentermine 5 cheapest sildenafil citrate 56 ultram online gambling ibuprofen caffeine nurses buy phentermine online us pharmacy overnight buy phentermine tablets online sildenafil citrate mass spectrum didrex online purchase order phentermine cod overnight delivery by dreampharmaceuticals from online order propecia marijuana germinate paper towel cheap depakote online cheap phentermine looking for cheap phentermine phentermine generic india cheap phentermine using mastercard no prescription pill splitting viagra online pharmacy phentermine saturday delivery xanax generic suppliers buy real phentermine no prescription buy propecia online phentermine no prescriptions sildenafil citrate best price special diets phentermine pills acomplia amp phentermine diet pills phentermine no longer available online 15mg cheap meridia 37.5 diet phentermine pill phentermine yellow pharmacy online vardenafil package insert where can i buy meridia online soma drug interactions cheapest viagra prices uk no online phentermine prescription 5 sildenafil citrate online phentermine money orders order valium with a doctor consultation 375 cod order phentermine carisoprodol soma rbcmail ru prescription phentermine with cod payment buy xanax we accept money orders obtain vardenafil hydrochloride prescription buy phentermine best online pharmacy can you purchase phentermine without presciption low price for viagra online pharmacy propecia viagra besy viagra prices klonopin vs xanax dosage buying xanax online real phentermine to purchase cheap phentermine with no prescription cheap sildenafil citrate online cheap sildenafil citrate process cherry fruit patent fioricet free overnight shipping ativan lorazepam lorazepam online xanax lorazepam cheapest viagra prices us licensed pharmacies cheap no prescription phentermine best herbal herbal viagra viagra viagra generic viagra and cialis actos aciphex aciphex nasacort ambien phentermine for weight loss online pharmacy online drug source hydrocodone pharmacies prescription phentermine buy discount buy xanax cod shipped saturday buy phentermine cod online pharmacy cheap xanax site 3 pictures phentermine pills looking to buy phentermine online phentermine adipex viagra ordering phentermine pharmacy online phentermine prescription and facts type of drug i