Preparing Your Financial Projections

Robert J. Rutledge, Chartered Accountant Preparing Your Financial Projections Instructions

The template is organized in six steps: Step 1 - Company information Step 2 - Costs and Financing, and a loan schedule (Step 2A). Step 3 - Sales Step 4 - Cost of Sales Step 5 - Salaries and wages Step 6 - Operating costs

Once you have completed all the steps, you can move to:

Projected Income Statement Projected Balance Sheet Projected Statement of Cash Flows Proceed now to Step 1 - Company Information.

Financial Projections Template Worksheet Step One - Company Information

Enter your company name by typing over the line.

________________________________

Change the year end dates to those of your company, by typing over the dates below. Year end date - Year 1 Year end date - Year 2 Year end date - Year 3 December 31, 2013 December 31, 2014 December 31, 2015

Now proceed to Step 2 - Costs and Financing

Financial Projections Template Worksheet Step Two - Start-up Costs and Financing

1)

The first, and possibly the most difficult step to preparing financial projections is to determine your start-up costs and how these costs will be financed. Start-up costs In the spaces below, under the dollar sign, enter the dollar amount of your company's opening assets. Enter dollar amounts only, no cents. In most cases this will be the assets you are trying to purchase in order to start your business. Depreciation rates for fixed assets will be calculated automatically.

2)

$ Current assets Opening cash Opening inventory Other Property and equipment Land Building Equipment Furniture and fixtures Leasehold improvements Computer equipment Automotive equipment Other____________________ -

Total assets

Financial Projections Template Worksheet Step Two - Start-up Costs and Financing
3) Financing In the spaces below enter how the above opening assets are going to be financed. The total financing must agree to the total assets above.

$ Long-term liabilities Long-term loan Owner's equity Cash Contributed asset value Total
(must agreed to total assets) (See instructions)

- This value must be entered

in step 2A.

Once you are in balance, proceed to Step 2A - Loan Schedule.

Financial Projections Template Worksheet Step Three - Sales Forecasts

1)

For each product or service you will be selling, enter your sales forecasts by month for the next three years. Try to consider any seasonal fluctuations which may apply to your business. Enter dollar amounts only. Enter the actual month, and the product or service name.

2) 3) 4)

Sales Forecast - Year One Product #1 Product #2 Product #3 ________ ________ ________ Total -

Month 1 2 3 4 5 6 7 8 9 10 11 12 Total

Financial Projections Template Worksheet Step Three - Sales Forecasts

Sales Forecast - Year Two Product #1 Product #2 Product #3 ________ ________ ________ Total Total -

Month 1 2 3 4 5 6 7 8 9 10 11 12

Sales Forecast - Year Three Product #1 Product #2 Product #3 ________ ________ ________ Total Total -

Month 1 2 3 4 5 6 7 8 9 10 11 12

Financial Projections Template Worksheet Step Four - Cost of Sales

1)

If you are a manufacturing company you will need to enter your projected Cost of Sales. If you are a service company, or a company that does not have specific "Costs of Sales," leave this section blank and proceed to Step 5. Cost of Sales can be determined as a "percentage of sales," or by "specific costs." You will have to decide which method applies best to your business. Complete the Cost of Sales schedule below for each year, by entering the Cost of Sales percentage, or specific Cost of Sales expenses. Obtaining the correct Gross Margin on sales is a very important aspect of being a successful business. Cost of sales also vary by industry. You should take time to ensure that your Cost of Sales projections are as accurate as possible.

2)

3)

4)

Cost of Sales Forecast - Year One Product #1 Product #2 Product #3 ________ ________ ________ Sales
(from step 3)

Total

Cost of Sales Enter %

or enter specific expenses and amounts.

50%

Purchases Labour Overhead Other Other Total Cost of Sales Gross Margin

Financial Projections Template Worksheet Step Four - Cost of Sales

Cost of Sales Forecast - Year Two Product #1 Product #2 Product #3 ________ ________ ________ Sales
(from step 3)

Total

Cost of Sales Enter %

or enter specific expenses and amounts.

50%

Purchases Labour Overhead Other Other Total Cost of Sales Gross Margin

Financial Projections Template Worksheet Step Four - Cost of Sales

Cost of Sales Forecast - Year Three Product #1 Product #2 Product #3 ________ ________ ________ Sales
(from step 3)

Total

Cost of Sales Enter %

or enter specific expenses and amounts.

50%

Purchases Labour Overhead Other Other Total Cost of Sales Gross Margin

Financial Projections Template Worksheet Step Five - Salaries & Wages

1)

Salary costs can be one of your major expenses and should be carefully planned out. Enter your estimated salary expenses, by individual if possible, for the next three years. Also, at this time, enter your management salaries. In most cases this will be what you want to pay yourself.

2)

Annual Salary: Year One Year Two Year Three General salaries and benefits: Position: Name:

Estimated benefits (10%) Total salaries and benefits

Year One Management salaries Position: Name:

Annual Salary: Year Two Year Three

Estimated benefits (7%) Total management salaries Total salaries

Proceed to Step 6 where to enter your remaining operating costs.

Financial Projections Template Worksheet Step Six - Operating Costs

1)

Enter your estimated operating expenses for the next three years.

Year One $ Advertising Automotive Bank charges Business taxes Casual wages Dues, licenses and fees Insurance Misellaneous expenses Office costs Postage Professional fees Property taxes Repairs and maintenance Rent Telephone Utilities Other_____________________ Other_____________________ Other_____________________ Other_____________________ -

Year Two $

Year Three $

________________________________ Projected Income Statement For For First Three Years of Operations

12/31/2013 $ SALES COST OF SALES GROSS MARGIN OPERATING COSTS -

12/31/2014 $ -

12/31/2015 $ -

Advertising Automotive Bank charges Business taxes Casual wages Depreciation Dues, licenses and fees Insurance Interest on long-term debt Management salaries Misellaneous expenses Office costs Postage Professional fees Property taxes Repairs and maintenance Rent Salaries and benefits Telephone Utilities Other_____________________ Other_____________________ Other_____________________ Other_____________________

INCOME BEFORE TAXES INCOME TAXES NET INCOME

________________________________ PROJECTED BALANCE SHEET For the Three Years Ending

Opening $ ASSETS CURRENT Cash Accounts receivable Inventory Other assets

12/31/2013 $

12/31/2014 $

12/31/2015 $

#REF! #REF!

#REF! #REF!

#REF! #REF!

CAPITAL ASSETS Land Building Equipment Furniture and fixtures Leasehold improvements Computer equipment Automotive equipment Other Accumulated depreciation

#REF!

#REF!

#REF!

LIABILITIES CURRENT Accounts payable Income taxes payable Current portion of long-term debt

LONG-TERM DEBT Long-term loan Less current portion

OWNER'S EQUITY Cash Contributed asset value Accumulated earnings