Answer To: NotesDeco Frost Financial Pro Forma StatementNotes - Outline all assumptions driving the...
Prince answered on Mar 26 2023
Notes
Deco Frost Financial Pro Forma Statement
Notes - Outline all assumptions driving the financial proforma on this sheet
Suggested Method:
1. Start with the income statement. Figure out the revenue, COGS and GM
2. Estimate your operating expenses and get your EBITDA
3. Subtract any depreciation if you have planned on capital purchases (that will be reflected on the balance sheet and cash flow statements ONLY)
4. Subtract any interest expenses from the EBIT from 3 above to get your EBT.
5. If your net income is positive, subtract taxes from your EBT to get your Net Income.
6. Complete the Cash Flow projections by reconciling your Net Income from the Income Statement. Do not duplicate your expenses on the Cash Flow Statement!
7. Put your financing into the flow statement, whether investments or debt. These must be sufficient to remain cash flow positive at the end of each month.
8. Itemize any capital expenses in the investment section.
ALL NOTES GO HERE. No comments in the spreadsheet!
Business description: Selling T-shirts
Development Plan: Set up the Manufacturing Plant
Marketing Plan:
Sales Plan: direct or through channels? Channel
what channels? Middleman
trade discounts by channel? 2.50%
IP plans? TM
Patent upgrades? Yes, cost $20000
License Yes
COGS
reference for similar gross margins for similar equipment 50% - COGS in 1st Year
changes in COGS over the three years with Economies of scale, 49% in 2nd Years and 48% in 3rd year
Sales Price:
changes in price over the three years Price will increase by 5% in year 2 and $2.5 in year 3
Sales volume growth exoectations 10% increase month-on-month
Hires: Hires should make sense for your revenue level. Justify your salary levels.
Marketing 2250 per month
sales
engineering 2250 per month
administrative
AP plans
What are your inventory levels? How quickly will you ship? I will ship the very next day. Since Change in Inventory is not given in Cash Flow statement, I have taken this at 0
How quickly will you pay for inventory? 80% in month of purchase, 20% in next month
manufacturing plans
contract
premium on cogs
in-house
assembly people 2
production space on Rent
equipment -fixed assets? Capital expenditures? 150000 in first year and then 10000 every year
expenses
insurance 300 per month
rent 500 per month
general maintenance 400 per month
office supplies
communications - internet, phone
marketing expenses 1425 per month
AR Plans
when do you get paid by customers or channels? 80% in month of sale, 20% in next month
tax rate
remember taxes are only paid on positive income Yes
where are you located and what do they charge? 25%
How does your accounting get done? Full Time Accountant
bookeeping by admin
accounting services
full time accountant
Income Statement
Deco Frost Income Statement
Year 1 Year 2 Year 3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 3
Sales Volume $1,000.00 $1,050.00 $1,103.00 $1,158.00 $1,216.00 $1,277.00 $1,341.00 $1,408.00 $1,478.00 $1,552.00 $1,630.00 $1,712.00 $15,925.00 $1,798.00 $1,888.00 $1,982.00 $2,081.00 $2,185.00 $2,294.00 $2,409.00 $2,529.00 $2,655.00 $2,788.00 $2,927.00 $3,073.00 $28,609.00 $3,227.00 $3,388.00 $3,557.00 $3,735.00 $3,922.00 $4,118.00 $4,324.00 $4,540.00 $4,767.00 $5,005.00 $5,255.00 $5,518.00 $51,356.00
Price $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $27.50 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00
Revenue $25,000.00 $26,250.00 $27,575.00 $28,950.00 $30,400.00 $31,925.00 $33,525.00 $35,200.00 $36,950.00 $38,800.00 $40,750.00 $42,800.00 $398,125.00 $49,445.00 $51,920.00 $54,505.00 $57,227.50 $60,087.50 $63,085.00 $66,247.50 $69,547.50 $73,012.50 $76,670.00 $80,492.50 $84,507.50 $786,747.50 $96,810.00 $101,640.00 $106,710.00 $112,050.00 $117,660.00 $123,540.00 $129,720.00 $136,200.00 $143,010.00 $150,150.00 $157,650.00 $165,540.00 $1,540,680.00
Trade discounts
Graef, Ted: Graef, Ted:
This is the discount you have to give to retailer like amazon or best buy. If sellin in more than one outlet, put a line for each with specific discount for that retailer. $625.00 $656.25 $689.38 $723.75 $760.00 $798.13 $838.13 $880.00 $923.75 $970.00 $1,018.75 $1,070.00 $9,953.13 $1,236.13 $1,298.00 $1,362.63 $1,430.69 $1,502.19 $1,577.13 $1,656.19 $1,738.69 $1,825.31 $1,916.75 $2,012.31 $2,112.69 $19,668.69 $2,420.25 $2,541.00 $2,667.75 $2,801.25 $2,941.50 $3,088.50 $3,243.00 $3,405.00 $3,575.25 $3,753.75 $3,941.25 $4,138.50 $38,517.00
COGS $12,500.00 $13,125.00 $13,787.50 $14,475.00 $15,200.00 $15,962.50 $16,762.50 $17,600.00 $18,475.00 $19,400.00 $20,375.00 $21,400.00 $159,250.00 $24,228.05 $25,440.80 $26,707.45 $28,041.48 $29,442.88 $30,911.65 $32,461.28 $34,078.28 $35,776.13 $37,568.30 $39,441.33 $41,408.68 $306,831.53 $46,468.80 $48,787.20 $51,220.80 $53,784.00 $56,476.80 $59,299.20 $62,265.60 $65,376.00 $68,644.80 $72,072.00 $75,672.00 $79,459.20 $585,458.40
Credit card charges $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $1,200.00
Shipping $500.00 $525.00 $551.50 $579.00 $608.00 $638.50 $670.50 $704.00 $739.00 $776.00 $815.00 $856.00 $7,962.50 $988.90 $1,038.40 $1,090.10 $1,144.55 $1,201.75 $1,261.70 $1,324.95 $1,390.95 $1,460.25 $1,533.40 $1,609.85 $1,690.15 $15,734.95 $1,936.20 $2,032.80 $2,134.20 $2,241.00 $2,353.20 $2,470.80 $2,594.40 $2,724.00 $2,860.20 $3,003.00 $3,153.00 $3,310.80 $30,813.60
Gross Margin $11,275.00 $11,843.75 $12,446.63 $13,072.25 $13,732.00 $14,425.88 $15,153.88 $15,916.00 $16,712.25 $17,554.00 $18,441.25 $19,374.00 $219,759.38 $22,891.93 $24,042.80 $25,244.83 $26,510.79 $27,840.69 $29,234.53 $30,705.09 $32,239.59 $33,850.81 $35,551.55 $37,329.01 $39,195.99 $443,312.34 $45,884.75 $48,179.00 $50,587.25 $53,123.75 $55,788.50 $58,581.50 $61,517.00 $64,595.00 $67,829.75 $71,221.25 $74,783.75 $78,531.50 $884,691.00
Expenses
Salaries (Itemize with line per hire)
Owner 1 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $3,750.00 $45,000.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $4,125.00 $49,500.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $60,000.00
Employee 1 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $27,000.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $29,700.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $33,600.00
Employee 2 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $2,250.00 $27,000.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $2,475.00 $29,700.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $2,800.00 $33,600.00
R&D...