FINANCIAL ASPECT OF
BUSINESS PLAN
SALES PROJECTIONS
A sales forecast is an estimate of what a
company will sell in a week, month, quarter
or year. It's used to predict future revenue,
accounting for the number of units an
individual, team or company is likely to sell
over a set period.
(Note: In sales projections, from the word itself
projections, meaning, you are just anticipating
possible sales or income for 5 years. You can do
this by the help of information gathered from
other competitors offering the same products.)
Notes:
*Qty./month means Quantity per Month.
*For year 1 computation of qty.:
Qty per month multiply 12 (no. of months in 1 year)
=150 x 12 = 1800
X 12
=
Formula used:
(Qty for Year 1 multiply the given percentage) plus
Qty. for Year 1 = Qty. for Year 2
= (1800 x .10) +1800
=180 + 1800
= 1980 Qty. for Year 2
*The increase of qty. per year from years 2-5, is 10%
X .10=180
+180
=
*For peso computation:
Qty. for Year = Qty. multiply by reseller price
=1800 x 31
=55,800 Price for year 1
*Do the same steps for Quantity Year 3-5.
X 31
=
FINANCIAL PLAN
A. START UP SUMMARY
START UP SUMMARY
includes the description of your products and
services, the structure of your business, your
target market, marketing strategy, funding
requirements, financial projections, and
licensing requirements, among others. It
serves as a roadmap for your business.
Notes:
*Total quantity per month is based from the
sales projection.
Notes:
*Add all the salaries of the employees to
get the Labor cost.
500 + 6,850 = 7,350
Labor Cost
Formula used:
*Cost/pc multiply to the total qty. per month
*Since every 1 yard of neoprene fabric can
make 10 masks, total qty. per month divide 10
is equal to 69. (685/10=68.5 round off)
=85 x 69
=5,865
X 69 =
For year 1:
*Total qty. per month multiply by 12 (except
for permits and license; and sewing machine
because they are not consumable)
=5,865 x 12
= 70,380
Do the same process to the succeeding data.
X 12 =
FINANCIAL PROJECTION
is a forecast of your company's future
financial performance. It should include line
items for each type of asset and liability, as
well as a total at the end.
INCOME STATEMENT
is a financial statement that shows you how
profitable your business will be within a
given period.
Note:
*Revenues from total sales projection table -
Year 1 Sales in Peso
Note:
*COST OF GOODS SOLD (from start-up summary
table), all the materials cost needed in production of
goods like fabric and labor.
70,380 + 88,200 = 158,500
Note:
*GROSS PROFIT is equal to Revenues less Cost of
Goods Sold.
REVENUE – COGS = GROSS PROFIT
290,280 – 158,580 = 131,700
Note:
*EXPENSES include all the expenses that are
not included in cost of goods sold like utilities,
miscellaneous expense and permit and licenses.
24,000 + 15,420 + 3, 000 = 42,420
Note:
*INCOME BEFORE INTEREST AND TAXES =
Gross profit - expenses.
GROSS PROFIT – EXPENSES = INCOME B4 INT AND TAX
131,700 – 42, 420 = 89, 280
Note:
*Tax = 32% (tax rate) of Income before Interest and
Taxes
Income before Interest and Taxes X 0.32 = TAX
89,280 X 0.32 = 28, 569. 6 (round-off)
28, 570
Note:
*NET INCOME = Income before Interest and
Tax less Tax
INCOME B4 INT AND TAX – TAX = NET
INCOME
89,280 – 58, 570 = 60, 710
To compute for years 2-5:
*Do the same procedure.
Note:
*Cost of goods sold and expenses multiply to the
desired percentage you want. In that projection, 10%
increase per year is used to get the amount for years
2-5 (except for permit and licenses).
PROJECTED CASH FLOW
is best defined as a listing of expected cash
inflows and outflows for an upcoming period
(usually a year). Anticipated cash
transactions are entered for the sub-period
they are expected to occur.
Note:
*CASH FLOW – this financial statement shows the
flow of cash (inflow and outflow).
*BEGINNING BALANCE for the year 1 is based
on start-up summary total qty, per month.
For the years 2-5, the ending cash balance of the
preceding year will be the beginning balance for the
current year.
Note:
*CASH SALES are based on the sales
projection table from the total sales in peso
per year.
Note:
*TOTAL CASH INFLOWS = Beginning
balance + cash sales plus + cash inflows
27,000 + 290,280 = 317,280
Note:
*Owner’s Withdrawal is projected amount only.
Note:
*Total Cash Outflows.
Materials 70,380
Machine 7,500
Labor 88,200
Utilities 24,000
Miscellaneous 15,420
Permit and License 3,000
Owner’s Withdrawal 28,570
Total 237,070
Note:
*ENDING CASH BALANCE = Total Cash
Inflows - Total Cash Outflows. E.g. in Year 1
=317,280 – 237,070
=80,210
BALANCED SHEET
the financial statement that reports a
company’s assets, liabilities, and owner’s
equity within a given period.
*Always remember that in Balanced Sheet the
Total Assets must be equal to Total Liabilities
and Equity.
Note:
*ASSETS AND LIABILITIES consist of
current and non-current.
*CURRENT ASSETS are cash and other assets
converted to cash within a year while NON-
CURRENT ASSETS are cash and other assets
that will not be realized or converted within a
year.
Note:
.*CURRENT LIABILITIES are liabilities
or short-term financial obligations that are
due within a year while NON-CURRENT
LIABILITIES are long-term financial
obligations that the due is more than a year.
Note:
*Cash at hand is based on Net Income.
*Income tax payable= 32% (tax rate) of Income before
interest and taxes.
*Capital is based on the cost per month in start-up
summary table.
*Drawings – total drawings for the period.
Note:
*NET CAPITAL = Capital Beginning +
Net Profit – Drawings
Note:
*TOTAL LIABILITIES AND EQUITY =
Total Liabilities + Net Capital
