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Projected Financial Statements
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Once you have your forecasts and estimations, you can actually create projections that take the format of your financial statements.
Projected Income Statement
An example of a projected Income Statement is shown below:
Sunnyside Incorporated - Income statement for the first six months
|
Key |
|
Month one |
Month two |
Month three |
Month four |
Month five |
Month six |
Total |
|
A |
Sales |
- |
20 000 |
- |
40 000 |
- |
50 000 |
110 000 |
|
B |
Less: Cost of Sales |
- |
13 591 |
- |
27 183 |
- |
33 979 |
74 753 |
|
C |
Gross Profit |
- |
6 409 |
- |
12 187 |
- |
16 021 |
35247 |
|
|
|
|
|
|
|
|
|
|
|
D |
Less: Operating Costs |
|
|
|
|
|
|
|
|
E |
Employee costs |
54 278 |
55 400 |
55 400 |
62 045 |
62 045 |
64 715 |
353 883 |
|
F |
Other expenditure |
12 500 |
33 814 |
25 255 |
17 268 |
16 596 |
18 796 |
124 229 |
|
G |
Total operating costs |
66 778 |
89 214 |
80 655 |
79 313 |
78 641 |
83 511 |
478 112 |
|
|
|
|
|
|
|
|
|
|
|
H |
Net profit (loss) before interest and tax |
(66 778) |
(82 805) |
(80 655) |
(79 313) |
(78 641) |
(67 490) |
(442 865) |
|
I |
Interest and/ or tax |
6 678 |
8 921 |
8 066 |
7 931 |
7 864 |
8 351 |
47 811 |
|
J |
Net profit (loss) |
(73 456) |
(91 726) |
(88 721) |
(74 427) |
(86 505) |
(75 841) |
(490 676) |
Source: Adapted from Stutley R. 2007. The Definitive Guide to Business Finance. 2nd Edition. Prentice Hall. Pg 219
|
Key |
|
|
A |
Sales are your sales forecasts as discussed in sections 4.2.1 and 4.2.2 |
|
B |
Cost of sales needs to be calculated. (For example) Opening stock + Purchases – Closing stock. The cost of sales is calculated based on your sales forecasts. |
|
C |
Gross profit projections are your Sales Forecasts less your related Cost of Sales |
|
D |
Operating costs include employee and non-employee costs as discussed in sections 4.3.2 and 4.3.3 |
|
E |
Employee costs would be calculated by using total cost per employee as per current headcount, as well as adding total costs for any additional employees that you project you will need based on your sales forecasts. |
|
F |
Other expenditures would include all non-employee costs. You would need to list and add all these to get a total figure. Your list would include things like marketing expenses, travel expenses, depreciation, communication expenses etc. You could list each item separately on your projections or have one total figure as in this example. All of these costs are estimates based on your sales forecasts. |
|
G |
Total operating costs are the total of employee and non-employee costs. |
|
H |
Net profit or loss before interest and tax is Gross Profit less Total Operating Costs |
|
I |
Interest and tax would be calculated based on forecasts and knowledge of the amount of interest earned/owed and tax that needs to be paid. In this example it is shown in one row for the sake of simplicity, however, the interest, and tax would be on separate lines. |
|
J |
The Net Profit or Loss projections can now be calculated. |
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