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Burn Rate Forecast

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					                                                       GUIDELINES

    GENERAL

    Definition: A burn rate forecast is a list of expenses the business must incur in order to allocate revenue producing
    expenses and operating expenses throughout a given span of time.



    Objective: The purpose of preparing a burn rate forecast is to determine what expenses are needed and the rate at
    which they are being incurred during normal business operations. It helps users plan on how to properly allocate
    cash resources to cover long-term expenses. If cash shortages are revealed , financial plans must be altered to
    provide more cash until a proper cash flow balance is obtained. For example, customer discounts for pre-payments,



    The Spreadsheet: This worksheet provides a systematic method of recording estimates of direct and indirect
    expenditures, as they relate to revenue-producing processes. It also helps in the timing of said expenditures, which
    can be compared with a revenue influx as it becomes known. The entries listed in the spreadsheet will not
    necessarily apply to every business, so users should adapt the spreadsheet to the particular business for which the
    projection is being made.



    Procedure:
    1. Populate all applicable cells in the "Current Year" column under the "Burn Rate Forecast" tab. Cells that require
    your input are highlighted in BLUE.
    1. Populate all applicable cells in the Burn Rate Forecast Expenditure Current Year Column. Cells that require your
    input are highlighted in YELLOW.
    2. Populate all applicable cells For periods 1, 2 and 3. Cells that require your input are highlighted in GREEN.

    3. The worksheet will automatically calculate the period 4 figures and provide you with overhead budget totals and
    percentages, by period.



    ANALYSIS

    1. The cash position at the end each quarter should be adequate to meet the expense requirements for the following
    quarter. If there is not sufficient revenue to meet the expenses of the subsequent quarter, then additional revenue
    sources and or the reduction of expenses will have to be analyzed to meet projection needs.
    2. The projection becomes more useful when the forecasted information can be compared with actual information
    as it develops. It is important to follow through and complete the actual columns as the information becomes
    available. Utilize the burn rate forecast to assist in setting new goals and planning operations for more profit.




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                                                                                           b2b business
                                                                          Projected Fundraising Financial Activity Report
                                                                                      Budget versus Actual

Burn Rate Forecast                          Anticipated             Forecasted                Forecasted                    Forecasted   Forecasted
                                            Burn Rate Total          Burn Rate                 Burn Rate                     Burn Rate    Burn Rate
                                            For All Periods           Period 1                  Period 2                      Period 3     Period 4
                                                  100.00%              20.00%                    35.00%                        30.00%       15.00%
Revenues
Item A                                                    525,000
Item B                                                    175,000

Total Revenues                                            700,000



Expenditures
Purchases - Item A                                        130,000     26,000                     45,500                       39,000       19,500
Purchases - Item B                                        120,000     24,000                     42,000                       36,000       18,000
Production Supplies - Item A                              150,000     30,000                     52,500                       45,000       22,500
Production Supplies - Item B                              125,000     25,000                     43,750                       37,500       18,750
Rent - Location A                                          50,000     10,000                     17,500                       15,000        7,500
Rent - Location B                                          50,000     10,000                     17,500                       15,000        7,500
Telephone                                                   2,000        400                        700                          600          300
Insurance                                                   4,000        800                      1,400                        1,200          600
Courier Service & Postage                                     500        100                        175                          150           75
Office Supplies                                               900        180                        315                          270          135
Salaries & Wages                                           64,800     12,960                     22,680                       19,440        9,720
Utilities                                                   1,000        200                        350                          300          150
Legal & Professional Fees                                   1,000        200                        350                          300          150
Refuse & Carting                                              300         60                        105                           90           45
Supplies                                                      500        100                        175                          150           75

Total                                                     700,000    140,000                    245,000                      210,000      105,000

Forecasted Burn Rate Percentage                           100.00%     20.00%                     35.00%                       30.00%       15.00%

(Over) Under Forecast                                          0     560,000                    315,000                      105,000            (0)




Instructions for use:
Change values in column B, rows 6 and 7
Change values in column B, rows 14 to 28
Change values in row 4, columns D, F & H, as forecasted
All computations will update automatically
Values in row 31 should equal values in row 4




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Description: The Burn Rate Forecast provides a template spreadsheet to estimate indirect and direct expenses. By forecasting necessary expenses, managers can properly and efficiently allocate revenue producing expenses and operating budget expenses. This will help a business allocate cash resources to ensure that normal business operations and long-term expenses will be covered. This document contains user instructions on how to populate the spreadsheet and can be modified to best fit the needs of any company.