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FinancialStatements and Projections
(3-5 pages) – Develop projected financial statements for the first year of business. You may use the Business Plan Financials Template to prepare this section (see Appendix B) or you may create your own template.
Revenue and Cost Estimate
This is the first part of the profit and loss statement. You will estimate the revenue (sales) and expenses for the first 12 months of your business.
Forecasted Profit and Loss Statement
(Month by month for 1st 12 months)– Here you will consider the sales forecast, the operating expenses, and the profits. Take the month-by-month revenue estimates of sales and expenses from the revenue and cost estimate (F1) and include interest expense to obtain a profit projection for your first year of operations. It will reveal net profit (obtained from subtracting the interest expense from the profit before interest). The profit before interest is calculated by subtracting total expenses from total revenue.
Salary expenses
Payroll expenses
General and administrative
Repairs and maintenance
Marketing and Advertising
Accounting and legal
Utilities
Insurance
Taxes (real estate, etc.)
Selling Expenses
Other expenses (specify)
Examples of expenses may include:
Forecasted Balance Sheet
This statement deals with cash and income and also with assets, liabilities, and capital. The balance should result in the debit and credit balances ending up equal.
Financial Projections
(1-2 pages)- Summarize the financial projections and the assumption used in estimating the projections in section F.
Breakeven Point-
Include an estimate of income and expenses. It determines whether or not your business will bring in enough money to meet its costs.
This method is used to determine the exact point at which the business makes neither takes a loss nor makes a profit. It is calculated at a point where sales have grown at a greater rate than costs and the two lines cross.
Financial Position:
Include the estimated financial position of the company at the end of the first year and the estimated capital/investment needs. Make sure to include any assumptions you used in estimating this information.
Capital/Investment Needs:
Estimate the capital and investment needs for your company. Be sure to discuss any equity contributions your company will need along with other start up costs required.
Financial Statements and Projections
Financial Assumptions
Revenue and Cost Estimate
As it would take at least 6 months to market our first app so we have forecasted revenue for the last 6 months of the first year only. Below is the forecasting:
page 1
Forecasted Profit and Loss Statement
Financial Projections
Summarize the financial projections and the assumption used in estimating the projections in section F
Break Even Analysis
Financial Position
Capital Needs
Income Statements:
Total
Revenue & ExpensesJanuary FebruaryMarchAprilMay JuneJuly AugustSeptemberOctober November December
REVENUE (Sales):$0$0$0$0$0$0$10,960$16,440$19,180$21,920$27,400$27,400$123,300
Coins Purchase$0$0$0$0$0$0$2,740$4,110$4,795$5,480$6,850$6,850$30,825
Advertising$500$1,000$1,500$2,500$3,500$5,000$14,000
Subscription Fee$150$350$500$750$1,000$1,150$3,900
Total Revenue$0$0$0$0$0$0$14,350$21,900$25,975$30,650$38,750$40,400$172,025
OPERATING EXPENSES:
Salary Expenses350003500035000350003500035000350003500035000350003500035000420000
Maintenance Expenses2000200020002000200020002000200020002000200022000
Marketing Expenses1500$1,435$2,190$2,598$3,065$3,875$4,040$17,203
Legal Expenses150030004500
Administrative Expenses5001000100010001000100035003500350035003500350026500
Utilities3003003003003003003003003003003003003600
Transaction Cost (Payment)$431$657$779$920$1,163$1,212$5,161
2014
Sheet1
Income Statements:
2014 Total
Revenue & Expenses January February March April May June July August September October November December
REVENUE (Sales): $0 $0 $0 $0 $0 $0 $10,960 $16,440 $19,180 $21,920 $27,400 $27,400 $123,300
Coins Purchase $0 $0 $0 $0 $0 $0 $2,740 $4,110 $4,795 $5,480 $6,850 $6,850 $30,825
Advertising $500 $1,000 $1,500 $2,500 $3,500 $5,000 $14,000
Subscription Fee $150 $350 $500 $750 $1,000 $1,150 $3,900
Total Revenue $0 $0 $0 $0 $0 $0 $14,350 $21,900 $25,975 $30,650 $38,750 $40,400 $172,025
OPERATING EXPENSES:
Salary Expenses 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 420000
Maintenance Expenses 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 22000
Marketing Expenses 1500 $1,435 $2,190 $2,598 $3,065 $3,875 $4,040 $17,203
Legal Expenses 1500 3000 4500
Administrative Expenses 500 1000 1000 1000 1000 1000 3500 3500 3500 3500 3500 3500 26500
Utilities 300 300 300 300 300 300 300 300 300 300 300 300 3600
Transaction Cost (Payment) $431 $657 $779 $920 $1,163 $1,212 $5,161
Total Expenses 37300 41300 38300 38300 38300 39800 42665.5 43647 44176.75 44784.5 45837.5 46052 498963.25
Earnings Before Interest and Tax ($37,300) ($41,300) ($38,300) ($38,300) ($38,300) ($39,800) ($28,316) ($21,747) ($18,202) ($14,135) ($7,088) ($5,652) ($326,938)
Interest Expense 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Earnings Before Tax ($39,300) ($43,300) ($40,300) ($40,300) ($40,300) ($41,800) ($30,316) ($23,747) ($20,202) ($16,135) ($9,088) ($7,652) ($350,938)
Tax Expense ($11,790) ($12,990) ($12,090) ($12,090) ($12,090) ($12,540) ($9,095) ($7,124) ($6,061) ($4,840) ($2,726) ($2,296) ($105,281)
Net Income ($27,510) ($30,310) ($28,210) ($28,210) ($28,210) ($29,260) ($21,221) ($16,623) ($14,141) ($11,294) ($6,361) ($5,356) ($245,657)
ParticularsAmount
ASSETS:
Current Assets:
Cash($245,657)
Other Current Assets$100,000
Long Term Assets:
Office Equipments$500,000
Total Assets
$354,343
LIABILITIES:
Current Liabilities:
Salaries Payables
Long Term Liabilities:
Loans$200,000.00
Total Liabilities $200,000.00
Owner’s Equity
Equity Investment$400,000.00
Retain Earnings($245,657)
Total Liabilities and
Owner’s Equity
$354,343
Balance Sheet: For the year ended, 2014
Sheet1
Balance Sheet: For the year ended, 2014
Particulars Amount
ASSETS:
Current Assets:
Cash ($245,657)
Other Current Assets $100,000
Long Term Assets:
Office Equipments $500,000
Total Assets $354,343
LIABILITIES:
Current Liabilities:
Salaries Payables
Long Term Liabilities:
Loans $200,000.00
Total Liabilities $200,000.00
Owner’s Equity
Equity Investment $400,000.00
Retain Earnings ($245,657)
Total Liabilities and Owner’s Equity $354,343
Fixed Cost$500,000
Price (Average)$2.74
Variable Cost$1,308,557
Sales Average1,452,500
VC per APP$0.90
Break-Even Unit271,872
Break-Even Analysis
Sheet1
Break-Even Analysis
Fixed Cost $500,000
Price (Average) $2.74
Variable Cost $1,308,557
Sales Average 1,452,500
VC per APP $0.90
Break-Even Unit 271,872
Equity Capital$400,000
Debt Capital (Loan @ 12%)$200,000
Total Investments$600,000
Capital Requirements
Sheet1
Capital Requirements
Equity Capital $400,000
Debt Capital (Loan @ 12%) $200,000
Total Investments $600,000
Advertising Earnings Growth25%
Subscription growth15%
Marketing Expense10%
Transaction Cost3%
Tax Rate30%
Interest Rate12%
Interest Expense$24,000
Financial Assumptions
Sheet1
Financial Assumptions
Advertising Earnings Growth 25%
Subscription growth 15%
Marketing Expense 10%
Transaction Cost 3%
Tax Rate 30%
Interest Rate 12%
Interest Expense $24,000
Total
Sales projectionJanuary FebruaryMarchAprilMay JuneJuly AugustSeptemberOctober November December
Sales Unit4,0006,0007,0008,00010,00010,00045,000
Regular Version (75%)3,0004,5005,2506,0007,5007,50033,750
Premium Version (25%)1,0001,5001,7502,0002,5002,50011,250
Regular Price $1.995,9708,95510,44811,94014,92514,92567,163
Premium Price $4.994,9907,4858,7339,98012,47512,47556,138
Total Revenue From Sales10,96016,44019,18021,92027,40027,400123,300
2014
Sheet1
2014 Total
Sales projection January February March April May June July August September October November December
Sales Unit 4,000 6,000 7,000 8,000 10,000 10,000 45,000
Regular Version (75%) 3,000 4,500 5,250 6,000 7,500 7,500 33,750
Premium Version (25%) 1,000 1,500 1,750 2,000 2,500 2,500 11,250
Regular Price $1.99 5,970 8,955 10,448 11,940 14,925 14,925 67,163
Premium Price $4.99 4,990 7,485 8,733 9,980 12,475 12,475 56,138
Total Revenue From Sales 10,960 16,440 19,180 21,920 27,400 27,400 123,300
Coins Purchase 2,740.00 4,110.00 4,795.00 5,480.00 6,850.00 6,850.00 30,825.00
Sales Forecasting
| 2 | 0 | Total | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue & Expenses | January | February | March | April | May | June | July | August | September | October | November | December | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales Unit | 4,000 | 6,000 | 7,000 | 8,000 | 10,000 | 45,000 | 380,000 | 1,425,000 | 2,250,000 | 3,16 | 2, | 500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regular Version (75%) | 3,000 | 4,500 | 5,250 | 7,500 | 33,750 | 285,000 | 1,068,750 | 1,687,500 | 2,371,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premium Version ( | 25% | 1,000 | 1,500 | 1,750 | 2,000 | 11,250 | 95,000 | 356,250 | 562,500 | 790,625 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Regular Price $1.99 | 5,970 | 8,955 | 10,448 | 11,940 | 14,925 | 67,163 | 567,150 | 2,126,813 | 3,358,125 | 4,720,031 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premium Price $4.99 | 4,990 | 7,485 | 8,733 | 9,980 | 12,475 | 56,138 | 474,050 | 1,777,688 | 2,806,875 | 3,945,219 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | 10,960 | 16,440 | 19,180 | 21,920 | 27,400 | 123, | 300 | 1,041,200 | 3,904,500 | 6,165,000 | 8,665,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Coins Purchase | 2,740.0 | 4,110.0 | 4,795.0 | 5,480.0 | 6,850.0 | 30,825.0 | 260,300.0 | 976,125.0 | 1,541,250.0 | 2,166,312.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assumptions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subscription growth | 15% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marketing Expense | 10% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction Cost | 3% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax Rate | 30% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate | 12% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Expense | $24,000 |
Revenue and Expenses
| REVENUE (Sales): | $0 | $10,960 | $16,440 | $19,180 | $21,920 | $27,400 | $123,300 | $1,041,200 | $3,904,500 | $6,165,000 | $8,665,250 | ||||||||||||||||||||||||||||||||||||||
| $2,740 | $4,110 | $4,795 | $5,480 | $6,850 | $30,825 | $260,300 | $976,125 | $1,541,250 | $2,166,313 | ||||||||||||||||||||||||||||||||||||||||
| $500 | $1,000 | $1,500 | $2,500 | $3,500 | $5,000 | $14,000 | $17,500 | $21,875 | $27,344 | $34,180 | |||||||||||||||||||||||||||||||||||||||
| Subscription Fee | $150 | $350 | $750 | $1,150 | $3,900 | $4,485 | $5,158 | $5,931 | $6,821 | ||||||||||||||||||||||||||||||||||||||||
| $14,350 | $21,900 | $25,975 | $30,650 | $38,750 | $40,400 | $172,025 | $1,323,485 | $4,907,658 | $7,739,525 | $10,872,563 | |||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Salary Expenses | 3500 | 5000 | 4 | 2000 | 50000 | 550000 | 65000 | 800000 | |||||||||||||||||||||||||||||||||||||||||
| Maitenance Expenses | 22000 | 2 | 4000 | 24000 | |||||||||||||||||||||||||||||||||||||||||||||
| Marketing Expenses | 1500 | $1,435 | $2,190 | $2,598 | $3,065 | $3,875 | $4,040 | $17,203 | $132,349 | $490,766 | $773,953 | $1,087,256 | |||||||||||||||||||||||||||||||||||||
| Legal Expenses | 3000 | 4500 | |||||||||||||||||||||||||||||||||||||||||||||||
| Adminstrative Expenses | 1000 | 26500 | 42000 | 45000 | |||||||||||||||||||||||||||||||||||||||||||||
| Utilities | 3600 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction Cost (Payment) | $431 | $657 | $779 | $920 | $1,163 | $1,212 | $5,161 | $39,705 | $147,230 | $232,186 | $326,177 | ||||||||||||||||||||||||||||||||||||||
| Total Expenses | 37300 | 41300 | 38300 | 39800 | 42665.5 | 43647 | 44176.75 | 44784.5 | 45837.5 | 46052 | 498963.25 | 741653.05 | 1260595.5075 | 1734138.271125 | 2307433.23054375 | ||||||||||||||||||||||||||||||||||
| Earnings Before Interest and Tax | -$37,300 | -$41,300 | -$38,300 | -$39,800 | -$28,316 | -$21,747 | -$18,202 | -$14,135 | -$7,088 | -$5,652 | -$326,938 | $581,832 | $3,647,062 | $6,005,387 | $8,565,130 | ||||||||||||||||||||||||||||||||||
| Earnings Before Tax | -$39,300 | -$43,300 | -$40,300 | -$41,800 | -$30,316 | -$23,747 | -$20,202 | -$16,135 | -$9,088 | -$7,652 | -$350,938 | $557,832 | $3,623,062 | $5,981,387 | $8,541,130 | ||||||||||||||||||||||||||||||||||
| Tax Expense | -$11,790 | -$12,990 | -$12,090 | -$12,540 | -$9,095 | -$7,124 | -$6,061 | -$4,840 | -$2,726 | -$2,296 | -$105,281 | $167,350 | $1,086,919 | $1,794,416 | $2,562,339 | ||||||||||||||||||||||||||||||||||
| Net Income | -$27,510 | -$30,310 | -$28,210 | -$29,260 | -$21,221 | -$16,623 | -$14,141 | -$11,294 | -$6,361 | -$5,356 | -$245,657 | $390,482 | $2,536,144 | $4,186,971 | $5,978,791 |
Forecasted Balance Sheet
| ASSETS: | ||||||||||
| Current Assets: | ||||||||||
| Cash | $ (245,657) | $ 290,482 | $ 2,036,144 | $ 2,986,971 | $ 3,478,791 | |||||
| Office Equipment | $ | 100,000 | $ 90,000 | $ 75,000 | $ 65,000 | $ 60,000 | ||||
| Long Term Assets: | ||||||||||
| Application Value | $ | 500,000 | $ 510,000 | $ 525,000 | $ 535,000 | $ 540,000 | ||||
| Total Assets | $ 354,343 | $ 890,482 | $ 2,636,144 | $ 3,586,971 | $ 4,078,791 | |||||
| LIABILITIES: | ||||||||||
| Current Liabilties: | ||||||||||
| Salaries Payables | ||||||||||
| Long Term Liabilities: | ||||||||||
| Loans | $ 200,000.00 | |||||||||
| Total Liabilities | ||||||||||
| Owner’s Equity | ||||||||||
| Equity Investment | $ 400,000.00 | |||||||||
| Retain Earnings | $290,482 | $2,036,144 | $2,986,971 | $3,478,791 | ||||||
| Total Liabilities and | ||||||||||
| Statement of Retain Earnings | ||||||||||
| Beginning Reatin Earnings | ||||||||||
| Dividends | 1,200,000 | 2,500,000 | ||||||||
| Ending Retain Earnings |
