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					ACCT331
Business Plan Forecasting
Financial Statements 101

Balance Sheet = The financial position of the company AS OF a particular point in time

               Assets = the resources owned by the company
               Liabilities = the obligation of the company to non-owners
               Owners' Equity = what's left for the owners; Assets - Liabilities

Assets:
               Current                                                      Liquidity Ratios measure the company's ability to pay its current
                     Cash                       $         7,500             obligations.
                     Receivables                          3,500
                     Inventory                            3,000             Working Capital = Current Assets - Current Liabilities
               Long-Term                                                        12,500      =            14,000        -            1,500
                     Fixed Assets                       10,000                         The company can pay off all of its current obligations
                     Less accum. depreciation           (4,000)                        and still have $12,500 liquid assets remaining.
                     Book Value of Fixed Assets          6,000
                                                                            Current Ratio = Current Assets / Current Liabilities
               Total Assets                         $   20,000                    9.33       =                14,000      /        1,500
                                                                                        The company's current assets are sufficient to pay
Liabilities:                                                                            its current liabilities 9.33 times.
               Current
                      Accounts Payable              $     1,500
                      Income Taxes Payable                  -               Financial Flexibility Ratios measure the companies ability to
               Long-Term                                                    adapt to unforseen changes in the operations, their ability to
                      Long-term Debt                    10,000              borrow money.
               Total Liabilities                        11,500
                                                                            Debt to Equity = Total Liabilities / Total Owners' Equity
Owners' Equity:                                                                    1.35      =               11,500      /            8,500
                      Paid-In Capital                   10,000                           For every $1 of equity the company has $1.35 of liabilities.
                      Retained Earnings (Deficit)       (1,500)
               Total Equity                              8,500              Debt to Assets = Total Liabilities / Total Assets
                                                                                   0.58      =               11,500       /   $ 20,000
               Total Liabilities and Equity         $   20,000                          The company owes other parties 58% of its assets.
WVU Entrepreneurship Center
Business Plan Competition Workshop 4a
Financial Statements 101

Income Statement - The results of the operating activities during a particular year

           Revenues = what someone was willing to pay for the goods or services provided in the operations of the company.
           Expenses = costs incurred by the company to generate the revenues identified above.
                 Expenses are not the same as costs incurred. Some costs are reflected on the income statement, some on the balance sheet.
           Gains/Losses = Net amount of the inflows less the carrying amount of the asset given up, in transactions that are not
                          the company's normal operations.


           Sales Revenue                      $     75,000              What customers were willing to pay for the items sold
           Cost of Goods Sold                      (40,000)             What the company had to pay for those same items
           Gross Profit                             35,000              The VALUE ADDED by the company

           Operating Expenses:                                          The costs incurred by the company in order to realize the
                  By Function or By Type                                   value added.
                  R&D           Payroll             15,000
                  Sales         Rent                12,000              DeGeorge strongly recommends that you use a contribution margin
                  Gen & Admin Depreciation           4,000              approach to the income statement. Where COGS = Variable Costs only.
                                Other                  500              Operating expenses can be both fixed and variable and should be seperated.
                  Total Operating Expenses          31,500              This is not GAAP, but it is more meaningful for forecasting.
           Operating Income                          3,500
           Interest Expense                         (5,000)             EBIT = Earnings before Interest and Taxes
           Interest Income                             -                     or Net Income + Tax expense and Interest Expense
           Gain/(Loss) on Sale of Assets               -                     In this case EBIT = $3,500 ( -1,500 + 5,000)
           Pretax Income (Loss)                     (1,500)
           Income Taxes                                                 EBITDA = Earnings before Interest, Taxes and Depreciation & Amortization
           Net Income                      $         (1,500)                In this case EBITDA = $7,500 (EBIT 3,500 + 4,000)

           Reconciliation of Retained Earnings (connects the income statement to the balance sheet)
           Beginning Retained Earnings     $        -
           Plus Net Income                       (1,500)
           Less Dividends paid                      -
           Ending Retained Earnings        $     (1,500)
WVU Entrepreneurship Center
Business Plan Competition Workshop 4a
Financial Statements 101

Statement of Cash Flows : Cash flow by type of activity, that occurred during a period.
         It's all about cash flows!

Operating Activities (Indirect Approach)                              Indirect Approach to Operating Cash Flows
         Net Income                         $         (1,500)         Net Income + noncash expenses, + or - Gains or Losses,
         + Non-cash expenses                           4,000            + or - the change in net operating assets and liabilities:
         + or - gains or losses (interest)             5,000
         + or - Changes in operating assets                           Accounts Receivable               3,500             If NOA increased, we used cash.
             and liabilities                          (5,000)         Inventory                         3,000             If NOA decreased, we received cash.
Cash Flows from Operating Activities                   2,500          Accounts Payable                 (1,500)
                                                                      Income Taxes Payable                -
Investing Activities                                                  Net Operating Assets              5,000
           Cash used to purchase LT Assets           (10,000)
           Interest Income
           Cash from sale of LT Assets                   -            Direct Approach to Operating Cash Flows:
Cash flow from Investing Activities                  (10,000)         $    71,500 Cash Collected from Sales
                                                                                  Sales + Beginning A/R - Ending A/R = Cash Collected
Financing Activities
           Cash from borrowings                       50,000                        Inventory Purchases
           Repayment of Debt principle               (40,000)                       COGS + Ending Inventory = Goods Available - Beginning Inventory
           Repayment of Debt Interest                 (5,000)                       equals Inventory Purchased (40,000 + 3,000 - 0 = $43,000)
           Cash from Owners                           10,000
           Cash to Owners - Dividends                    -                 (69,000) Cash Used for Operating Costs
Cash flow from financing activities                   15,000                        Inventory Purchased + Operating Costs Incurred (excluding depreciation)
                                                                                    + Beginning A/P - Ending A/P = Cash paid for costs incurred.
Net Change in Cash                                     7,500
Cash at Beginning of period                              -                        0 Cash used for Income Taxes
Cash at End of Period                          $       7,500                        Income Tax Expense + Beginning Taxes Payable - Ending Taxes Payable
                                                                                    equals cash used for income taxes.

                                                                      $      2,500 Operating Cash Flows
GAAP would include these items in operating cash flows
In forecasting, they create a difficult loop which can be eased
by treating them as non-operating.

Free Cash Flow = Cash Flow from Operating Activities less Capital Expenditures (additions to PP&E) and dividends paid by the company.
         In this case free cash flow was negative $7,500)
         Free cash flow is more relevant for a mature company than a start-up.
ACCT331
Business Plan Forecasting
Budgeting - Year 1 & Year 2 (if needed)


Focus on ALL of the cost that will be incurred as you start up your business.

Provide as much detail as you can. You can summarize latter.

Make every attempt to use a contribution margin approach

           Sales = Unit Price X Quantity Sold
less       COGS = Unit Cost X Quantity Sold
equals     Contribution Margin = CM per unit X Quantity Sold
less       Fixed Operating Expenses:
            Depreciation
            Other
equals     Operating Income


You would be surprised at the different types of businesses that can use CM.
          It's not just for manufacturers.

Step 1: Determine the cost of 1 unit of product or service or the relationship between
          variable costs and revenues.


Step 2: Identify your fixed expenses, including start-up costs.
          I suggest a zero-based budget approach for year 1 and year 2 if needed.
          Just because costs are fixed does not mean that they will not change.

Suggested Subheadings:
         Payroll & Related Expenses            There is no magic to these subheading, group them as you see fit.
         Facility Costs
         Outside Services
         Supplies & Misc
         Travel & Entertainment
         Other operating expenses




Payroll and Related Expenses               1          2          3          4           5         6
          Managers Number                  1          1          1          1           1         1
                    Annual            30,000     30,000     30,000     30,000      30,000    30,000
                    Monthly            2,500      2,500      2,500      2,500       2,500     2,500

                     Number
           Supervisors                     1          1          1          1           1         1
                     Annual           25,000     25,000     25,000     25,000      25,000    25,000
                      Monthly         2,083       2,083        2,083      2,083      2,083      2,083

          Staff       Number              1           1           2           2          2          3
                      Annual         20,800      20,800      20,800      20,800     20,800     20,800
                      Monthly         1,733       1,733       3,467       3,467      3,467      5,200

          Total # of Employees               3        3            4          4          4            5
          Benefit Employees                  2        2            2          2          2            2

          Normal Gross Payroll        6,317       6,317        8,050      8,050      8,050      9,783
          Internal Commissions
          Incentive (Bonus)
          Gross Payroll               6,317       6,317        8,050      8,050      8,050      9,783
          Payroll Related:
          ER Taxes       10.5%          663         663          845        845        845      1,027
          Insurance         750       1,500       1,500        1,500      1,500      1,500      1,500
          EE Portion       25%         (375)       (375)        (375)      (375)      (375)      (375)
          401K              2%          126         126          161        161        161        196
          Total Payroll Related       1,915       1,915        2,131      2,131      2,131      2,348
             % of Gross                30.3%      30.3%        26.5%      26.5%       26.5%        24.0%
Total Payroll & Related               8,231       8,231      10,181      10,181     10,181     12,131

          Payroll related expenses will vary based on the benefits provided. The following is a summary of the items that

          Employer Payroll Taxes: (FICA, FUTA, SUTA & Workers' Comp) - roughly 10.5% of gross payroll.

          Insurance
                      Medical Insurance                    These vary based on the extent of coverage, marital status (family
                      Disability Insurance                  and the extent to which employees participate in the premiums.
                      Term Life Insurance                   covered employee (high side) with 25% paid by employee.

          Retirement/Profit Sharing/401K Matching          Varies - I have used 2% of gross pay.

Other Operating Costs: This is by no means a comprehensive listing

Facility Costs
           Rent
           Utilities
             Gas/Electric/Water & Sewage/Internet
           Phone
           Maintenance
           Security
Outside Services
           Legal
           Accounting
           Computer
           Consultants
           Commissioned Agents (Rent-a-Rep) - (variable)
           Advertising
           Promotions (may be variable)
Supplies & Misc.
           Office supplies
           Production supplies
           Maintenance supplies
           Uniforms/Clothing
           Equipment rental
Travel & Entertainment
           Automobile expenses
           Car rental
           Air travel
           Lodging
           Travel meals
           Other meals
Other Costs
           Emlpoyee welfare
           Insurance
             Property & Casualty
             Transportation
             Business Interupt.
             Key Emp. Life
           Freight - In/Out
           Postage
           Non-Income Taxes
             B&O/Franchise
             Property
             Sales/Use
           Licenses & Permits
           Education & Training
           Dues & Subscriptions
oup them as you see fit.




                     7          8        9       10       11       12
                     1          1        1        1        1        1
                30,000     30,000   30,000   30,000   30,000   30,000
                 2,500      2,500    2,500    2,500    2,500    2,500

                     1          1        1        1        1        1
                25,000     25,000   25,000   25,000   25,000   25,000
                 2,083      2,083     2,083      2,083        2,083     2,083

                    3           3         4          4            4         4
               20,800      20,800    20,800     20,800       20,800    20,800
                5,200       5,200     6,933      6,933        6,933     6,933

                       5        5          6         6            6         6
                       2        2          2         2            2         2

                 9,783      9,783    11,517     11,517       11,517    11,517


                 9,783      9,783    11,517     11,517       11,517    11,517

                 1,027      1,027     1,209      1,209        1,209     1,209
                 1,500      1,500     1,500      1,500        1,500     1,500
                  (375)      (375)     (375)      (375)        (375)     (375)
                   196        196       230        230          230       230
                 2,348      2,348     2,565      2,565        2,565     2,565
                 24.0%      24.0%      22.3%      22.3%       22.3%     22.3%
               12,131      12,131    14,081     14,081       14,081    14,081

ng is a summary of the items that are normally considered.

5% of gross payroll.


 of coverage, marital status (family coverage versus single)
yees participate in the premiums. I have used $750 per month per
with 25% paid by employee.
ACCT331                                        Let your assumptions drive the forecast.
Financial Forecast                             Then test the results for reasonableness and sensitivity
                                               Items in Bold are input required cells. Everything else is computed.

Critical Assumptions:               Year 1        Year 2      Year 3      Year 4      Year 5      Year 6
Income Statement:
Volume Change                                      10.0%       10.0%       10.0%       10.0%       10.0%
Price Change                                        5.0%        5.0%        5.0%        5.0%        5.0%
Variable Cost Change                                2.5%        2.5%        2.5%        2.5%        2.5%
Inflation Change (Fixed costs)                      2.0%        2.0%        2.0%        2.0%        2.0%
 Incremental "Step" (Fixed cost)                  10,000         -        10,000         -           -
Effective Tax Rate                    40.0%        40.0%       40.0%       40.0%       40.0%       40.0%

Balance Sheet/Cash Flow:
Ending Sales Days in A/R                45            45          45          45          45          45
Ending Inventory Days Supply            60            60          60          60          60          60
Days to Pay Payables                    30            30          30          30          30          30
Percentage of Taxes Unpaid             25%           25%         25%         25%         25%         25%
PP&E Additions                     100,000           -           -           -           -           -
Paid In Capital                    150,000           -           -           -           -           -
Dividend Cash in Excess of:        100,000       100,000     100,000     100,000     100,000     100,000


Unit Volume                          1,000         1,100       1,210       1,331       1,464       1,611
Unit Price                          100.00        105.00      110.25      115.76      121.55      127.63
Variable Unit Cost                   50.00         51.25       52.53       53.84       55.19       56.57


Income Statement                    Year 1        Year 2      Year 3      Year 4      Year 5      Year 6
Sales                              100,000       115,500     133,403     154,080     177,962     205,546
Variable Costs                     (50,000)      (56,375)    (63,563)    (71,667)    (80,805)    (91,107)
Fixed Costs
  Depreciation                      (10,000)      (10,000)   (10,000)    (10,000)    (10,000)    (10,000)
  Other                             (40,000)      (50,800)   (51,816)    (62,852)    (64,109)    (65,392)
Operating Income                        -          (1,675)     8,024       9,560      23,048      39,048
Interest Expense
Pretax Profit                           -          (1,675)      8,024      9,560      23,048      39,048
Income Taxes                            -             670      (3,209)    (3,824)     (9,219)    (15,619)
Net Income (Loss)                       -          (1,005)      4,814      5,736      13,829      23,429




Cash Flows                          Year 1        Year 2      Year 3      Year 4      Year 5      Year 6
Operating Cash Flow
 Net Income                            -          (1,005)      4,814       5,736      13,829      23,429
 Add depreciation expense           10,000        10,000      10,000      10,000      10,000      10,000
 Add interest expense
 Change in Operating Assets         (12,639)       (2,342)    (1,771)     (2,174)     (2,279)     (2,584)
Operating Cash Flows                 (2,639)        6,653     13,043      13,562      21,550      30,845

Investing Cash Flows               (100,000)          -           -          -           -           -
Financing Cash Flows:
  Paid In Capital                  150,000        -          -          -          -          -
  Dividends paid                       -          -          -          -          -       (2,170)
  Interest Expense
  Debt Incurred (repaid)                          -          -          -          -          -
Net Cash Flows                      47,361      6,653     13,043     13,562     21,550     28,675
Beginning Cash                         -       47,361     54,014     67,057     80,620    102,170
Ending Cash                         47,361     54,014     67,057     80,620    102,170    130,845


Operating Assets/Liabilities        Year 1     Year 2     Year 3     Year 4     Year 5     Year 6

 Accounts Receivable                12,500     14,438     16,675     19,260     22,245     25,693
 Inventory (Variable costs only)     8,333      9,396     10,594     11,945     13,467     15,185
 Accounts Payable                   (8,194)    (9,020)    (9,715)   (11,323)   (12,203)   (13,185)
 Income Taxes Payable                  -          167       (802)      (956)    (2,305)    (3,905)
Net Operating Assets                12,639     14,981     16,752     18,926     21,205     23,788




Balance Sheet:                      Year 1     Year 2     Year 3     Year 4     Year 5     Year 6
Assets
 Cash                               47,361     54,014     67,057     80,620    102,170    130,845
 Accounts Receivable                12,500     14,438     16,675     19,260     22,245     25,693
 Inventory                           8,333      9,396     10,594     11,945     13,467     15,185
 Fixed Assets                      100,000    100,000    100,000    100,000    100,000    100,000
 Less Accumulated Depr.            (10,000)   (20,000)   (30,000)   (40,000)   (50,000)   (60,000)
Total Assets                       158,194    157,847    164,326    171,824    187,882    211,723

Liabilities:
 Accounts Payable                    8,194      9,020      9,715     11,323     12,203     13,185
 Income Taxes Payable                  -         (167)       802        956      2,305      3,905
 Long-Term Debt                        -          -          -          -          -          -
Total Liabilities                    8,194      8,852     10,517     12,279     14,508     17,089

Owners Equity
 Paid-In Capital                   150,000    150,000    150,000    150,000    150,000    150,000
 Retained Earnings                     -       (1,005)     3,809      9,546     23,374     44,633
Total Owners Equity                150,000    148,995    153,809    159,546    173,374    194,633

Liabilities Plus Equity            158,194    157,847    164,326    171,824    187,882    211,723
 check                                 -          -          -          -          -          -


Financial Statement Summary and Ratio Analysis
                                    Year 1     Year 2     Year 3     Year 4     Year 5     Year 6
Sales                              100,000    115,500    133,403    154,080    177,962    205,546
 Sales Growth                                   15.5%      15.5%      15.5%      15.5%      15.5%

Contribution Margin                 50,000     59,125     69,840     82,413     97,158    114,439
 % of Sales                          50.0%      51.2%      52.4%      53.5%      54.6%      55.7%
EBITDA                             10,000         8,325       18,024      19,560      33,048       49,048
 % of Sales                         10.0%          7.2%        13.5%       12.7%       18.6%        23.9%
 EBITDA Growth                                   -16.7%       116.5%        8.5%       69.0%        48.4%

Net Income                            -          (1,005)       4,814       5,736      13,829       23,429
 % of Sales                          0.0%         -0.9%         3.6%        3.7%        7.8%        11.4%
 Net Income Growth                             #DIV/0!       -579.0%       19.2%      141.1%        69.4%

Operating Cash Flows                (2,639)       6,653       13,043      13,562      21,550       30,845
 Growth in Op. Cash Flow                        -352.1%        96.1%        4.0%       58.9%        43.1%

Current Assets                     68,194        77,847       94,326     111,824     137,882      171,723
Current Liabilities                 8,194         8,852       10,517      12,279      14,508       17,089
 Current Ratio                       8.32          8.79         8.97        9.11        9.50        10.05

Total Assets                      158,194       157,847      164,326     171,824     187,882      211,723
Total Liabilities                   8,194         8,852       10,517      12,279      14,508       17,089
Total Equity                      150,000       148,995      153,809     159,546     173,374      194,633
  Debt to Assets                     5.2%          5.6%         6.4%        7.1%        7.7%         8.1%
  Debt to Equity                     5.5%          5.9%         6.8%        7.7%        8.4%         8.8%

Return on Average Assets                          -0.6%         3.0%        3.4%        7.7%        11.7%
Return on Average Equity                          -0.7%         3.2%        3.7%        8.3%        12.7%

Investor Cash Flow (Pretax)       (150,000)         -             -           -           -          2,170
   Cumulative                     (150,000)    (150,000)     (150,000)   (150,000)   (150,000)    (147,830)
  Internal Rate of Return            8.09%
  Payback Period                              (HARD CODE)


Estimated Market Value           #DIV/0!      581,921         92,209     809,267     959,963     1,136,142
 Net Income X Projected Growth (next years growth rate)



Depreciation Schedule
                                        1                2          3           4           5            6
Capital Additions                 100,000
Estimated Life                         10
Annual Depreciation                10,000

Depreciation
 Additions in Year 1               10,000        10,000       10,000      10,000      10,000       10,000
 Additions in Year 2
 Additions in Year 3
 Additions in Year 4
 Additions in Year 5
 Additions in Year 6


Total Depreciation                 10,000        10,000       10,000      10,000      10,000       10,000
ng else is computed.

               Year 7     Year 8      Year 9     Year 10     Year 11

                10.0%       10.0%       10.0%       10.0%       10.0%
                 5.0%        5.0%        5.0%        5.0%        5.0%
                 2.5%        2.5%        2.5%        2.5%        2.5%
                 2.0%        2.0%        2.0%        2.0%        2.0%
                  -           -           -           -           -
                40.0%       40.0%       40.0%       40.0%       40.0%


                   45         45          45          45          45
                   60         60          60          60          60
                   30         30          30          30          30
                  25%        25%         25%         25%         25%
                  -          -           -           -           -
                  -          -           -           -           -
              100,000    100,000     100,000     100,000     100,000


                1,772      1,949       2,144       2,358       2,594
               134.01     140.71      147.75      155.13      162.89
                57.98      59.43       60.92       62.44       64.00


               Year 7      Year 8      Year 9     Year 10     Year 11
              237,406     274,204     316,706     365,795     422,493
             (102,723)   (115,821)   (130,588)   (147,238)   (166,010)

              (10,000)    (10,000)   (10,000)    (10,000)        -
              (66,699)    (68,033)   (69,394)    (70,782)    (72,198)
               57,983      80,350    106,724     137,775     184,285

               57,983      80,350    106,724     137,775     184,285
              (23,193)    (32,140)   (42,690)    (55,110)    (73,714)
               34,790      48,210     64,034      82,665     110,571




               Year 7     Year 8      Year 9     Year 10     Year 11

               34,790     48,210      64,034      82,665     110,571
               10,000     10,000      10,000      10,000         -

               (2,930)    (3,323)     (3,769)     (4,277)     (3,853)
               41,860     54,887      70,265      88,389     106,718

                  -           -           -           -           -
    -          -          -           -           -
(30,845)   (41,860)   (54,887)    (70,265)    (88,389)

    -          -          -          -           -
 11,015     13,027     15,378     18,124      18,329
130,845    141,860    154,887    170,265     188,389
141,860    154,887    170,265    188,389     206,718


 Year 7     Year 8     Year 9    Year 10     Year 11

 29,676     34,276     39,588      45,724      52,812
 17,121     19,303     21,765      24,540      27,668
(14,280)   (15,503)   (16,870)    (18,400)    (20,111)
 (5,798)    (8,035)   (10,672)    (13,778)    (18,429)
 26,718     30,041     33,810      38,087      41,940




 Year 7     Year 8     Year 9    Year 10     Year 11

141,860    154,887    170,265     188,389     206,718
 29,676     34,276     39,588      45,724      52,812
 17,121     19,303     21,765      24,540      27,668
100,000    100,000    100,000     100,000     100,000
(70,000)   (80,000)   (90,000)   (100,000)   (100,000)
218,657    228,466    241,618     258,653     287,198



 14,280     15,503     16,870     18,400      20,111
  5,798      8,035     10,672     13,778      18,429
    -          -          -          -           -
 20,078     23,538     27,543     32,177      38,540


150,000    150,000    150,000    150,000     150,000
 48,578     54,928     64,075     76,475      98,658
198,578    204,928    214,075    226,475     248,658

218,657    228,466    241,618    258,653     287,198
    -          -          -          -           -




 Year 7     Year 8     Year 9    Year 10     Year 11
237,406    274,204    316,706    365,795     422,493
  15.5%      15.5%      15.5%      15.5%       15.5%

134,683    158,383    186,118    218,557     256,483
  56.7%      57.8%      58.8%      59.7%       60.7%
  67,983       90,350      116,724      147,775    184,285
   28.6%        32.9%        36.9%        40.4%      43.6%
   38.6%        32.9%        29.2%        26.6%      24.7%

  34,790       48,210       64,034       82,665    110,571
   14.7%        17.6%        20.2%        22.6%      26.2%
   48.5%        38.6%        32.8%        29.1%      33.8%

  41,860       54,887       70,265       88,389    106,718
   35.7%        31.1%        28.0%        25.8%      20.7%

 188,657      208,466      231,618      258,653    287,198
  20,078       23,538       27,543       32,177     38,540
    9.40         8.86         8.41         8.04       7.45

 218,657      228,466      241,618      258,653    287,198
  20,078       23,538       27,543       32,177     38,540
 198,578      204,928      214,075      226,475    248,658
    9.2%        10.3%        11.4%        12.4%      13.4%
   10.1%        11.5%        12.9%        14.2%      15.5%

   16.2%        21.6%        27.2%        33.0%     40.5%
   17.7%        23.9%        30.6%        37.5%     46.5%

   30,845       41,860       54,887      70,265     88,389
 (116,985)     (75,125)     (20,238)     50,027    138,416




1,342,004    1,582,430    1,863,094    2,790,588




        7            8            9          10        11




  10,000       10,000       10,000       10,000        -




  10,000       10,000       10,000       10,000        -
ACCT331                                         KISS
Business Plan Project                           Say only what you have to and want to say and be prepared for questio
Presentation                                    Everything on the screen is a possible distraction



Big Picture 1 (or maybe 2)
                                        Year 1 Year 2 Year 3 Year 4 Year 5
     Sales
     Gross Profit/Contribution Margin           The number of years shown depends on
     Operating Income                           how long it will take you to have good numbers
           EBIT                                 on every item on this page.
           EBITDA
     Net Income                                 Round to thousands?

     Operating Cash Flows                       NO PENNIES

     Free Cash Flow (maybe)
     Some balance sheet (debt) indicator

     Investors Cash Flow
           IRR
           Payback period

Big Picture 2 (or maybe 1)
      Critical Assumptions              Good explaination of the critical assumptions will keep
             As needed                   people away from the detail.




Appendix A to booklet: - Be sure to include a narrative summary of your critical assumptions.
          Remember that the reader will not be able to see cell formula's.
          Therefore Level 1 should be close to GAAP/Standard format.

Level 1 Income Statement - Annual
                                        Year 1 Year 2 Year 3 Year 4 Year 5        THRUYear 10
     Net Sales
     COGS
     Gross profit/contribution margin
     Operating expenses
           Depreciation
           Payroll
           etc.
     Income from Operations
     Other Income (expense)
     Pretax Income
     Net Income

     Horizontal & Vertical Analysis


Level 2 Income Statement - Annual
                                        Year 1 Year 2 Year 3 Year 4 Year 5        THRUYear 10
     Critical Assumptions
     Detail for Sales

     Detail for COGS

     Detail for Operating Expenses


Level 1 Cash Flows - Annual
                                     Year 1 Year 2 Year 3 Year 4 Year 5   THRUYear 10




Level 1 Balance Sheet - Annual
                                     Year 1 Year 2 Year 3 Year 4 Year 5   THRUYear 10
 to say and be prepared for questions
le distraction




cal assumptions.       Appendix B to Booklet - This is probably too much data.



                       Level 1 Income Statement - Monthly
                                                          Month 1   Month 2   Month 3   ect.
                       Net Sales
                       COGS
                       Gross profit/contribution margin
                       Operating expenses
                             Depreciation
                             Payroll
                             etc.
                       Income from Operations
                       Other Income (expense)
                       Pretax Income
                       Net Income




                       Level 1 Income Statement - Monthly
                                                          Month 1   Month 2   Month 3   ect.
                       Critical Assumptions
Detail for Sales

Detail for COGS

Detail for Operating Expenses


Level 1 Cash Flows - Monthly
                                Month 1   Month 2   Month 3   ect.

				
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