Assignment: Logbook Exercise 2

Financial Forecasting
(Due Date: 18th May 2022)

Ms. Foloko's Frozen Mangoes Limited has been supplying frozen Mangoes for the past two years
in some towns in Zambia. This project is expected to run for the next three years, and Ms Foloko
would like to project the possible sales in up to the end of 2023 and whether the project will be
profitable at the end of three years after the recovery of working capital would amount to K700,000
and will be recovered at the end of the product’s life.

The sales and the other factors affected the sales for each quarter for 2020 and 2021 were as
follows: Year City Quarter Q (Sales) Price Advert Populution
1 26000 550 10 2300
2 25000 600 7.5 2300
2020
3 24000 575 10 2250
4 25000 575 5 2250
Kitwe
1 27500 525 10 2200
2 22500 500 7.5 2200
2021
3 25000 525 7.5 2150
4 22500 600 5 2150
1 27500 600 5 1700
2 25000 600 5 1750
2020
3 25500 525 10 1700
4 25000 550 5 1700
Chingola
1 22500 600 7 1750
2 22500 550 5 1800
2021
3 22500 625 5 1800
4 22500 600 7.5 1850
1 31500 600 5 7200
2 32500 550 15 7150
2020
3 27500 600 5 7100
4 22500 600 10 7150
Lusaka
1 30000 550 5 7200
2 30000 575 15 7250
2021
3 25000 600 5 7100
4 27500 575 5 7050
1 34000 500 15 1600
2 32500 575 10 1650
2020
3 32500 550 7.5 1600
4 30000 600 12.5 1550
Choma
1 27500 550 5 1550
2 25000 600 5 1500
2021
3 27500 575 10 1450
4 30000 550 10 1450
1 17500 600 2.5 515
2 17500 625 2.5 520
2020
3 15000 600 5 510
4 17500 575 2.5 510
Ketauka
1 15000 625 2.5 500
2 17500 575 2.5 490
2021
3 15000 575 5 490
4 17500 575 2.5 480
1 27000 625 5 1650
2 27500 625 12.5 1600
2020
3 27500 625 5 1500
4 25000 625 5 1550
Kabwe
1 30000 550 7.5 1350
2 30000 575 12.5 1100
2021
3 27500 600 12.5 1050
4 25000 575 10 1025

Table 1: Sales Volumes for 2020 and 2021

The variable cost for each box of Mangoes is K285 and a company also has a fixed cost for each
year of K276,000. However, it now also requires the following labour need to help handle the
added workload to ensure that the works are done as required and these are paid according to their
participation on the project on a monthly basis using the following rates;
Type of Labour Rate per Hour Availability
Skilled K35 25%
Casual K15 100%
Table 2: Hourly Rates for each Grade and the Corresponding Participation

Each of these are required to work a total of 8 hours per day and 22 days per month if working at
100%. The only deduction made for each of these workers is Napsa at 5% of the monthly pay only
if an employee gets more than K3300. All these costs are also expected to increase by 10% pa in
the subsequent years due to inflation. Tax is charged at the rate of 22% on profits and is paid at
the end of each year. The company requires a rate of return of 10% per annum for all projects of
this nature.
The Company’s Board of directors requires that company:
• Maximises Days in Accounts Receivables.
• Minimise the Direct Cost.
• Maximise the Gross Profit Margin

REQUIRED:
Produce a Model in MS Excel containing a control worksheet and as many worksheets as required
using Absolute and Relative Referencing that fulfils the following;
a) In one worksheet Using Time Series with Seasonality produce the following
i. Produce a time series plot based on the sales volumes for the years 2020 and 2021
(2 mark)
ii. Using the Exponential Smoothing Tool and the Smoothing Constant of 0.3,
Determine the possible Sales values for the years 2022 and 2023. (3 marks)
iii. Using the Average Method with both the Quarterly sales seasonal factors, determine
the possible Quarterly Sales for 2022 and 2023. (3 marks)
iv. Using Multiple Regression with dumping factors for both the Monthly Sales for the
years 2020 and 2021.
A. Perform a Regression Analysis using the Excel Data Analysis Tool and
Calculate the projected Monthly Sales for 2022 and 2023. (8 marks)
 B. Provide a Quarter Report for the Sales in 2022 and 2023 comparing the
projections done using the Exponential Smoothing and Regression Analysis
in the previous question. (2 marks)
b) In another worksheet, create a mini payroll for the addition labour resource. The company
is expected to employ Three (3) Skilled labour and Five (5) Casual Labour;
i. Using the Text and Row function, model the Employee No prefixed by the text
“T1” and the first employee number in the series should be “T120”. (2 marks)
ii. Using Data Validation and the IF function, allow the user to select the Grade for
each employee and the model should calculate the monthly pay as the Basic Pay
for that employee using the information provided in Table 2. (3 marks)
iii. With the reference to the information in Table 2 and using BOTH the IF and
VloopUp Calculate the Napsa amounts for each employee. (3 marks)
iv. Calculate the Net Pay for each employee and the Total amount the company will
spend on these additional labour resources on a monthly and annual basis.
(2 marks)
c) Create a worksheet and calculate the Cash Flow Projections for the Years 2022 and 2023.
(8 marks)
(Total: 40 marks)