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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.
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. © Copyright 2013 Docstoc Inc. 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 © Copyright 2011 Docstoc Inc.
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