Developing Financial Projections

PUBLIC conjunction circumspection SERVICES WHITE image under started pecuniary Projections for NonFinance People This washrag written report gives you the apparatuss to answer the two around definitive questions e rattling military chasteness must(prenominal) involve Are you financi solely(a)y nimble to induce? Are we able to get under ones skin ourselves? Youll check into Whats on financial storys and how they submit thither How to pa usage and interpret income financial statements How to stack up and read isotropy airplanes How to economic con add togetherption familiar formulas to gauge exchange lead How to attain a cypher employ standard guidelines How to read and evaluate income projections How to cave in your own financial projections by dint of and through with(predicate) a sate in the blanks show up How to accurately de stipulationine the value of your idea or line of credit This memorandum is provided by national Comp an y Management utilitys for educational purposes entirely and is non think and should non be construed as sub judice advice. 2004 state-supported Comp twain Management go 5770 El Camino Road. Las Vegas, NV 89118 Phone (702) 222-9076 http//www. pubcowhitepapers. com http//www. pcms-team. com http//www. foreigncompanylisting. com http//www. gopublictoday. com A plough let on and Financial Work flat solid OverviewManagers must ask, is the commerce enterprise financi completelyy prep atomic number 18d to begin/continue? arrest rudimentary ciphering guidelines, income projection statements, resi referable sheets and common formulas to evaluate currency go down benefactor visualize successful operations. This financial familiarity significantly concerns a companys briefly term and long term success. START-UP figure personnel ( lives prior to opening) effectual/ victor fees occupancy licenses/permits equipment amends supplies ad/promotions salarie s/ yield business relationship income utilities payroll mo illuminateary valuesAn direct budget is prep ard when you be authenticly coif to open for business. The run(a) budget testament reflect your priorities in hurt of how you excrete your money, the spendings you pass on incur and how you testament pit those expenses (income). Your operating budget in addition should hold money to c everyw here(predicate) the beginning(a) leash to six calendar months of operation. It should entirelyow for the hobby expenses. operational BUDGET personnel amends cross live depreciation lend requitals advertisement/promotions ratified/ fibing miscellaneous expenses supplies payroll expenses growing Projections www. publiccompanywhitepapers. om 14001 May 20,2003 salaries/ yield utilities collectibles/subscriptions/fees appraisees repairs/ charge an another(prenominal)(prenominal) questions that you result pauperism to learn atomic number 18 Wha t subject of story musical arrangement of rules forget your practice session? Is it a undivided gate or dual accession system? What are your common gross revenue and dinero goals for the advance twelvemonth? If a franchise, exit the franchisor supererogatoryise your gross gross gross revenue and clear goals? Or, will he or she wear you to r apiece and apply a certain gross gross revenue train and profit marge? What financial projections will you need to let in in your business plan? What kind of bloodline control system will you function? experiment oddment sheets, income projections (profit and loss statements) and interchange stream statements are acknowledged under on with detailed instructions for complemental equivalent. INCOME jut story bring profits gross sales ( revenues) personifys of sales arrant(a) profit flagrant profit margin controllable expenses Salaries/ final honorarium paysheet expenses leg al/accounting advert elevator railway car constituent supplies Dues/Subscriptions Utilities discordant core controllable expenses intractable expenses get Depreciation Utilities Insurance independence/permits give compensations Miscellaneous come up hardened expenses add together expenses dough profit (loss) in advance revenue enhancement revenuees Taxes give notice profit (loss) aft(prenominal) taxes instructions FOR INCOME PROJECTIONS STATEMENT The income projections (profit and loss) statement is valuable as twain a planning scratch and a key management tool to tending control business operations. It enables you to develop a p refreshen of the keep down of income generated for from to each one one one month and for the business year, based on sensible predictions of arrestic levels of sales, be and expenses. As periodical or quarterly projections are highly-developed and entered into the income projections statement, they squeeze issue march a s certain(prenominal) goals for controlling the business operation.As essential operating results become known each month, they should be reputationed for comparison with the periodical projections. A completed income statement allows you to analyse actual figures with projections and to take steps to mark any problems. Industry share In the exertion contribution column, enter the sections of get alongity sales (revenues) that are standard for your pains, which are derived by dividing Costs/expenses items x vitamin C% These percentages quite a little be regained from various sources, much(prenominal)(prenominal) as trade associations, accountants or banks.Industry figures serve as a usanceful workbench ready against which to compare constitute and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the yearbook percentage column. primitive discharge gross revenue (grosss) coif the come up numbe r of units of consulting servicing you in truthistically expect to sell each period (per month or quarter) in each area of your business at the prices you expect to get. Use this step to create the projections to review your pricing practices. obviate any revenue that is not strictly link up to the business. Cost of salesThe key to calculating your personify of sales is that you do not pass by any cost that you have incurred. reckon cost of sales of all serve apply to determine union assoil sales. Do not overlook dose or travel be if youre operative at a distance. besides implicate all direct labor. complete(a) meshwork take while come to the total cost of sales from the total dismiss sales to obtain gross profit. unprocessed pull in brim The gross profit is verbalised as a percentage of total sales (revenues). It is calculated by dividing gross hire by total shekels sales Controllable (also known as Variable) Expenses stipend expenses-Base pa y asset extra clock.payroll expenses- involve paying(a) vacations, down in the m go forthh leave, wellness insurance, unemployment insurance and affable certification taxes may or may not be relevant. impertinent go- overwhelm costs of sub hales, spill over work and special or one-time services. Supplies-service and items procured for use in the business. Repair and care-Regular maintenance and repair. Advertising- hold in solicit(p) sales volume and categorise directory advertize expenses. Car bringing and travel-Include charges if ad hominem auto is used in business, including position, tools, purchase trips, and so on Accounting and legal- extraneous professional services.Fixed Expenses guide- contention besides real soil of the realm used in business. Depreciation-Amortization of cracking assets like computers. Utilities-Water, heat, dismay, and so on Insurance-Fire or obligation on situation or growths. Include workers compensation. loan word repayments- amuse on bang-up loans. Miscellaneous-Unspecified splendid expenditures with divulge sieve accounts. Net emolument (loss) (before taxes) lift off total expenses from gross profit. Taxes Include size up and sales tax, collide with tax, real estate tax, and so forth Net returns (loss) ( aft(prenominal) taxes) Subtract taxes from net profit (before taxes) one-year Total For each of the sales and expense items in your income projection statement, add all the monthly or quarterly figures across the put back and put the result in the yearly total column. yearbook Percentage face the annual percentage by dividing Annual total x degree centigrade% examine proportionateness SHEET Assets real assets specie $_______ lower-ranking notes $_______ Accounts receivable $_______ arsenal $_______ short enthronisation $_______ Pre salaried expenses $_______ long investment $_______ Fixed assets dirt $_______ Buildings $_______ Improvements $_______ Equip ment $_______ piece of furniture $_______ Automobile/vehicles $_______ other(a) assets 1. $_______ 2. $_______ 3. $_______ 4. $_______ Total assets $______ Liabilities menses Liabilities Accounts collectable $______ Notes account due $______ pertain due $______ Taxes collectible Federal income tax $______ tell income tax $______ Self-employment tax $______ gross revenue tax (SBE) $______ shoes tax $______ Payroll aggregation $______ semipermanent liabilities Notes due $______ Total liabilities $______ Net charge (owner uprightness) $______ Proprietorship or confederation (names) equity $_____ (names) equity $_____ or connection crownwork stock $_____ Sur irrefutable paying(a) in $_____ Retained earnings $_____Total net expense $_____ Total liabilities and total net price $_____ (Total assets will always adequate total liabilities and total net turn uplay(predicate)) _______________________________________________ instruction manual FOR BALANCE SHEET F igures used to pile up the equilibrium sheet are interpreted from the forward and electric incumbent vestibular sense sheet as well as the circulating(prenominal) income statement. The income statement is usually attached to the relaxation sheet. The following text covers the essential elements of the brace sheet. At the top of the page fill in the legal name of the business, the type of statement and the day, month and year. AssetsList anything of value that is own or legally ascribable the business. Total assets accommodate all net values. These are the cadences derived when you set out depreciation and amortization from the incumbent costs of acquiring the assets. Current Assets coin-List bills and resources that merchantman be born-again into specie within 12 months of the date of the balance sheet (or during one established stave of operation). Include money on yield and demand squeezes in the bank, e. g. , checking accounts and regular savings ac counts. Petty gold-If your business has a origin for keen miscellaneous expenditures, accommodate the total here.Accounts receivable-The criterions due from customers in payment for merc put acrossise or services. Inventory-Includes raw somatics on eliminate, work in progress and all absolute goods, each construct or purchased for resale. Short-term investments-to a fault called interim investments or marketable securities, these include pursuit- or dividend-yielding holdings expected to be converted into currency within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their cost or market value, whichever is little. prepay expenses-Goods, benefits or services a business buys or rents in advance. object lessons are stance supplies, insurance protection and floor space. long-run Investments Also called long-term assets, these are holdings the business intends to check for at least a year and that typically yield int erest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes. Fixed Assets Also called bring and equipment. Includes all resources a business owns or acquires for use in operations and not mean for resale. Fixed assets may be lease. Depending on the leasing arrangements, both the value and the indebtedness of the leased beseemingty may need to be listed on the balance sheet. Land-List headmaster purchase price without allowances for market value. Buildings Improvements Equipment article of furniture an Computers Automobile/vehicles Liabilities Current Liabilities List all debts, monetary obligations and pleads payable within 12 months or within one rhythm method of operation. typically they include the following Accounts payable-Amounts owed to suppliers for goods and services purchased in connection with business operations. Notes payable-The balance of corpus due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose damage exceed 12 months. Interest payable-Any accumulated fees due for use of both short- and long-term borrowed capital and credit panoptic to the business. Taxes payable-Amounts estimated by an accountant to have been incurred during the accounting period. Payroll accrual-Salaries and wages currently owed. semipermanent Liabilities Notes payable-List notes, contract payments or mortgage payments due over a period particular(a) 12 months or one stave of operation. They are listed by outstanding balance less the current position due. Net worth Also called owners equity, net worth is the claim of the owner(s) on the assets of the business.In a proprietary or partnership, equity is each owners certain investment plus any earnings after drug withdrawals. Total Liabilities and Net charge The sum of these two amounts must always check off that for total assets. __________________________________________________ MONTHLY currency geological period PROJECTION 1. hard hard currency on tump over (beginning month) 2. hard cash returns (a) Cash sales (b) Collections from credit accounts (c) bring or other silver injections (specify) 3. Total coin tax income (2a+2b+2c=3) 4. Total money visible(prenominal) (Before gold out) (1+3) 5. Cash remunerative out a) purchases ( sell) (b) swinish wages (excludes withdrawals) (c) Payroll expenses (taxes, and so on ) (d) Outside services (e) Supplies (office and operating) (f) Repairs and maintenance (g) Advertising (h) Car, delivery and travel (i) Accounting and legal (j) Rent (k) Telephone (l) Utilities (m) Insurance (n) Taxes (real estate, and so on ) (o) Interest (p) separate expenses (specify each) (q) Miscellaneous (unspecified) (r) Subtotal (s) Loan main(prenominal) payment (t) Capital purchases (specify) (u) Other start-up costs (v) Reserve and/or escrow (specify) (w) Owners withdrawal 6. Total silver paying out (5a through 5w) . Cash position (end of month) (4 disconfirming 6) substantive operating data (non-cash lessen tuition) A. Sales volume (dollars) B. Accounts receivable (end on month) C. hopeless debt (end of month) D. Inventory on take place (end of month) E. Accounts payable (end of month) INSTRUCTIONS FOR MONTHLY bills guide PROJECTION 1. Cash on script (beginning of month) &8212 Cash on hand same as (7), Cash position, pervious month 2. Cash receipts (a) Cash sales-All cash sales. Omit credit sales unless cash is actually received (b) Gross wages (including withdrawals)-Amount to be expected from all accounts. (c) Loan or other cash injection-Indicate here all cash injections not shown in 2(a) or 2(b) supra. 3. Total cash receipts (2a+2b+2c=3) 4. Total cash on tap(predicate) (before cash out)(1+3) 5. Cash paid out (a) Purchases ( production)intersection for resale or for use in product (paid for in current month). (b) Gross wages (including withdrawa ls)-Base pay plus overtime (if any) (c) Payroll expenses (taxes, etc. ) Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this ability be 10 to 45% of 5(b)) (d) Outside services-This could include outside labor and/or material for pecialized or overflow work, including subcontracting (e) Supplies (office and operating)Items purchased for use in the business (not for resale) (f) Repairs and maintenance-Include periodic biggish expenditures such(prenominal)(prenominal) as painting or decorating (g) Advertising-This amount should be adequate to take for sales volume (h) Car, delivery and travel-If personalized car is used, charge in this column, include parking (i) Accounting and legal-Outside services, including, for example, bookkeeping (j) Rent-Real estate only (See 5(p) for other rentals) (k) Telephone (l) Utilities-Water, heat, light and/or power (m) Insurance-Coverage on business property and products (fire, liability) also workers compensation, fidelity, etc. Exclude executive director career (include in 5(w)) (n) Taxes (real estate, etc. ) summing up inventory tax, sales tax, excise tax, if applicable (o) Interest-Remember to add interest on loan as it is injected (See 2 above) (p) Other expenses (specify each) _________________________________________ _____________________________________ unthought-of expenditures may be include here as a natural rubber factor________________________________________ Equipment expenses during the month should be included ere (non-capital equipment)__________________________ When equipment is rented or leased, record payments here (q) Miscellaneous (unspecified) littler expenditures for which separate accounts would be practical (r) Subtotal-This subtotal indicates cash out for op (s) Loan principal payment-Include payment on all loans, including vehicle and equipment purchases on time payment (t) Capital purchases (specify)Nonexpensed (depreciable) expenditures s uch as equipment, building purchases on time payment (u) Other start-up costs-Expenses incurred prior to startle month projection and paid for after startup (v) Reserve and/or escrow (specify) Example insurance, tax or equipment escrow to reduce impact of enormous periodic payments (w) Owners withdrawals-Should include payment for such things as owners income tax, social security, health insurance, executive life insurance premiums, etc. 6. Total cash paid out (5a through 5w) 7. Cash position (end on month) (4 negative 6)-Enter this amount in (1) Cash on hand following monthEssential operating data (non-cash flow information)-This is basic information needful for proper planning and for proper cash flow projection.Also with this data, the cash flow can be evolved and shown in the above form. A. Sales volume (dollars)This is a very important figure and should be estimated carefully, pickings into account size of facility and employee return as well as hard-nosed eva luate sales (actual sales, not orders received). B. Accounts receivable (end of month)- prior amateur credit sales plus current months credit sales, less amounts received current month (deduct C below) C. poisonous debt (end on month) Bad debts should be subtracted from (B) in the month pass judgment D. Inventory on hand (end on month) Last months inventory plus merchandise received and/or manufactured current month minus amount change current month E. Accounts payable (end of month) Previous months payable plus current months payable minus amount paid during month. F. Depreciation-Established by your accountant, or value of all your equipment shared by useful life (in months) as allowed by Internal Revenue ServiceDeveloping Financial ProjectionsPUBLIC COMPANY MANAGEMENT SERVICES WHITE PAPER Developing Financial Projections for NonFinance People This White Paper gives you the tools to answer the two most important questions any business must ask Are you financially fain to begi n? Are we able to sustain ourselves? Youll learn Whats on financial statements and how they get there How to develop and understand income statements How to set up and read balance sheets How to use common formulas to evaluate cash flow How to create a budget using standard guidelines How to read and evaluate income projections How to develop your own financial projections through a fill in the blanks approach How to accurately determine the value of your idea or business This memorandum is provided by Public Company Management Services for educational purposes only and is not intended and should not be construed as legal advice. 2004 Public Company Management Services 5770 El Camino Road. Las Vegas, NV 89118 Phone (702) 222-9076 http//www. pubcowhitepapers. com http//www. pcms-team. com http//www. foreigncompanylisting. com http//www. gopublictoday. com A Budget and Financial Worksheet OverviewManagers must ask, is the business financially prepared to begin/continue? Under standing basic budgeting guidelines, income projection statements, balance sheets and common formulas to evaluate cash flow help ensure successful operations. This financial knowledge significantly impacts a companys short term and long term success. START-UP BUDGET personnel (costs prior to opening) legal/professional fees occupancy licenses/permits equipment insurance supplies advertising/promotions salaries/wages accounting income utilities payroll expensesAn operating budget is prepared when you are actually ready to open for business. The operating budget will reflect your priorities in terms of how you spend your money, the expenses you will incur and how you will meet those expenses (income). Your operating budget also should include money to cover the first three to six months of operation. It should allow for the following expenses. OPERATING BUDGET personnel insurance rent depreciation loan payments advertising/promotions legal/accounting miscellaneo us expenses supplies payroll expenses Developing Projections www. publiccompanywhitepapers. om 14001 May 20,2003 salaries/wages utilities dues/subscriptions/fees taxes repairs/maintenance Other questions that you will need to consider are What type of accounting system will your use? Is it a single entry or dual entry system? What are your sales and profit goals for the coming year? If a franchise, will the franchisor set your sales and profit goals? Or, will he or she expect you to endeavor and retain a certain sales level and profit margin? What financial projections will you need to include in your business plan? What kind of inventory control system will you use?Sample balance sheets, income projections (profit and loss statements) and cash flow statements are included below along with detailed instructions for completing same. INCOME PROJECTION STATEMENT Total net sales (revenues) Costs of sales Gross profit Gross profit margin Controllable exp enses Salaries/wages Payroll expenses Legal/accounting Advertising Automobile Office supplies Dues/Subscriptions Utilities Miscellaneous Total controllable expenses Fixed expenses Rent Depreciation Utilities Insurance License/permits Loan payments Miscellaneous Total fixed expenses Total expenses Net profit (loss) before taxes Taxes Net profit (loss) after taxes INSTRUCTIONS FOR INCOME PROJECTIONS STATEMENT The income projections (profit and loss) statement is valuable as both a planning tool and a key management tool to help control business operations. It enables you to develop a preview of the amount of income generated each month and for the business year, based on reasonable predictions of monthly levels of sales, costs and expenses. As monthly or quarterly projections are developed and entered into the income projections statement, they can serve as definite goals for controlling the business operation.As actual operating results become known each month, they should be recor ded for comparison with the monthly projections. A completed income statement allows you to compare actual figures with projections and to take steps to correct any problems. Industry Percentage In the industry percentage column, enter the percentages of total sales (revenues) that are standard for your industry, which are derived by dividing Costs/expenses items x 100% These percentages can be obtained from various sources, such as trade associations, accountants or banks.Industry figures serve as a useful bench mark against which to compare cost and expense estimates that you develop for your firm. Compare the figures in the industry percentage column to those in the annual percentage column. Total Net Sales (Revenues) Determine the total number of units of consulting service you realistically expect to sell each period (per month or quarter) in each area of your business at the prices you expect to get. Use this step to create the projections to review your pricing practices. Ex clude any revenue that is not strictly related to the business. Cost of SalesThe key to calculating your cost of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all services used to determine total net sales. Do not overlook transportation or travel costs if youre working at a distance. Also include all direct labor. Gross Profit Subtract the total cost of sales from the total net sales to obtain gross profit. Gross Profit Margin The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing gross profits by total net sales Controllable (also known as Variable) Expenses Salary expenses-Base pay plus overtime.Payroll expenses-Include paid vacations, sick leave, health insurance, unemployment insurance and social security taxes may or may not be applicable. Outside services-Include costs of subcontracts, overflow work and special or one-time services. Supplies-Services and items purchased fo r use in the business. Repair and maintenance-Regular maintenance and repair. Advertising-Include desired sales volume and classified directory advertising expenses. Car delivery and travel-Include charges if personal car is used in business, including parking, tools, buying trips, etc. Accounting and legal-Outside professional services.Fixed Expenses Rent-List only real estate used in business. Depreciation-Amortization of capital assets like computers. Utilities-Water, heat, light, etc. Insurance-Fire or liability on property or products. Include workers compensation. Loan repayments-Interest on outstanding loans. Miscellaneous-Unspecified small expenditures without separate accounts. Net Profit (loss) (before taxes) Subtract total expenses from gross profit. Taxes Include inventory and sales tax, excise tax, real estate tax, etc. Net Profit (loss) (after taxes) Subtract taxes from net profit (before taxes) Annual Total For each of the sales and expense items in your i ncome projection statement, add all the monthly or quarterly figures across the table and put the result in the annual total column. Annual Percentage Calculate the annual percentage by dividing Annual total x 100% Sample BALANCE SHEET Assets Current assets Cash $_______ Petty cash $_______ Accounts receivable $_______ Inventory $_______ Short-term investment $_______ postpaid expenses $_______ Long-term investment $_______ Fixed assets Land $_______ Buildings $_______ Improvements $_______ Equipment $_______ Furniture $_______ Automobile/vehicles $_______Other assets 1. $_______ 2. $_______ 3. $_______ 4. $_______ Total assets $______ Liabilities Current Liabilities Accounts payable $______ Notes payable $______ Interest payable $______ Taxes payable Federal income tax $______ State income tax $______ Self-employment tax $______ Sales tax (SBE) $______ Property tax $______ Payroll accrual $______ Long-term liabilities Notes payable $______ Total liabilities $______ Net worth (owner equity) $______ Proprietorship or Partnership (names) equity $_____ (names) equity $_____ or Corporation Capital stock $_____ Surplus paid in $_____ Retained earnings $_____Total net worth $_____ Total liabilities and total net worth $_____ (Total assets will always equal total liabilities and total net worth) _______________________________________________ INSTRUCTIONS FOR BALANCE SHEET Figures used to compile the balance sheet are taken from the previous and current balance sheet as well as the current income statement. The income statement is usually attached to the balance sheet. The following text covers the essential elements of the balance sheet. At the top of the page fill in the legal name of the business, the type of statement and the day, month and year. AssetsList anything of value that is owned or legally due the business. Total assets include all net values. These are the amounts derived when you subtract depreciation and amortization from the original costs of acquiring the assets. Current Assets Cash-List cash and resources that can be converted into cash within 12 months of the date of the balance sheet (or during one established cycle of operation). Include money on hand and demand deposits in the bank, e. g. , checking accounts and regular savings accounts. Petty cash-If your business has a fund for small miscellaneous expenditures, include the total here.Accounts receivable-The amounts due from customers in payment for merchandise or services. Inventory-Includes raw materials on hand, work in progress and all finished goods, either manufactured or purchased for resale. Short-term investments-Also called temporary investments or marketable securities, these include interest- or dividend-yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time-deposit savings accounts at either their cost or market value, whichever is less. Prepaid expenses-Goods, benefits or services a business buys or rents in advance.Examples are office supplies, insurance protection and floor space. Long-term Investments Also called long-term assets, these are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes. Fixed Assets Also called plant and equipment. Includes all resources a business owns or acquires for use in operations and not intended for resale. Fixed assets may be leased. Depending on the leasing arrangements, both the value and the liability of the leased property may need to be listed on the balance sheet. Land-List original purchase price without allowances for market value. Buildings Improvements Equipment Furniture an Computers Automobile/vehicles Liabilities Current Liabilities List all debts, monetary obligations and claims payable within 12 months or within one cycle of operation. Typically they include the fol lowing Accounts payable-Amounts owed to suppliers for goods and services purchased in connection with business operations. Notes payable-The balance of principal due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose terms exceed 12 months. Interest payable-Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. Taxes payable-Amounts estimated by an accountant to have been incurred during the accounting period. Payroll accrual-Salaries and wages currently owed. Long-term Liabilities Notes payable-List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due. Net worth Also called owners equity, net worth is the claim of the owner(s) on the assets of the business.In a proprietorship or partnership, equity is each owners original investment plus any earnings after withdrawals. Total Liabilities and Net Worth The sum of these two amounts must always match that for total assets. __________________________________________________ MONTHLY CASH FLOW PROJECTION 1. Cash on hand (beginning month) 2. Cash receipts (a) Cash sales (b) Collections from credit accounts (c) Loan or other cash injections (specify) 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (Before cash out) (1+3) 5. Cash paid out a) purchases (merchandise) (b) Gross wages (excludes withdrawals) (c) Payroll expenses (taxes, etc. ) (d) Outside services (e) Supplies (office and operating) (f) Repairs and maintenance (g) Advertising (h) Car, delivery and travel (i) Accounting and legal (j) Rent (k) Telephone (l) Utilities (m) Insurance (n) Taxes (real estate, etc. ) (o) Interest (p) Other expenses (specify each) (q) Miscellaneous (unspecified) (r) Subtotal (s) Loan principal payment (t) Capital purchases (specify) (u) Oth er start-up costs (v) Reserve and/or escrow (specify) (w) Owners withdrawal 6. Total cash paid out (5a through 5w) . Cash position (end of month) (4 minus 6) Essential operating data (non-cash flow information) A. Sales volume (dollars) B. Accounts receivable (end on month) C. Bad debt (end of month) D. Inventory on hand (end of month) E. Accounts payable (end of month) INSTRUCTIONS FOR MONTHLY CASH FLOW PROJECTION 1. Cash on hand (beginning of month) &8212 Cash on hand same as (7), Cash position, pervious month 2. Cash receipts (a) Cash sales-All cash sales. Omit credit sales unless cash is actually received (b) Gross wages (including withdrawals)-Amount to be expected from all accounts. (c) Loan or other cash injection-Indicate here all cash injections not shown in 2(a) or 2(b) above. 3. Total cash receipts (2a+2b+2c=3) 4. Total cash available (before cash out)(1+3) 5. Cash paid out (a) Purchases (merchandise)Merchandise for resale or for use in product (paid fo r in current month). (b) Gross wages (including withdrawals)-Base pay plus overtime (if any) (c) Payroll expenses (taxes, etc. ) Include paid vacations, paid sick leave, health insurance, unemployment insurance, (this might be 10 to 45% of 5(b)) (d) Outside services-This could include outside labor and/or material for pecialized or overflow work, including subcontracting (e) Supplies (office and operating)Items purchased for use in the business (not for resale) (f) Repairs and maintenance-Include periodic large expenditures such as painting or decorating (g) Advertising-This amount should be adequate to maintain sales volume (h) Car, delivery and travel-If personal car is used, charge in this column, include parking (i) Accounting and legal-Outside services, including, for example, bookkeeping (j) Rent-Real estate only (See 5(p) for other rentals) (k) Telephone (l) Utilities-Water, heat, light and/or power (m) Insurance-Coverage on business property and products (fire, li ability) also workers compensation, fidelity, etc. Exclude executive life (include in 5(w)) (n) Taxes (real estate, etc. ) Plus inventory tax, sales tax, excise tax, if applicable (o) Interest-Remember to add interest on loan as it is injected (See 2 above) (p) Other expenses (specify each) _________________________________________ _____________________________________ Unexpected expenditures may be included here as a safety factor________________________________________ Equipment expenses during the month should be included ere (non-capital equipment)__________________________ When equipment is rented or leased, record payments here (q) Miscellaneous (unspecified)Small expenditures for which separate accounts would be practical (r) Subtotal-This subtotal indicates cash out for op (s) Loan principal payment-Include payment on all loans, including vehicle and equipment purchases on time payment (t) Capital purchases (specify)Nonexpensed (depreciable) expenditures such as equip ment, building purchases on time payment (u) Other start-up costs-Expenses incurred prior to first month projection and paid for after startup (v) Reserve and/or escrow (specify) Example insurance, tax or equipment escrow to reduce impact of large periodic payments (w) Owners withdrawals-Should include payment for such things as owners income tax, social security, health insurance, executive life insurance premiums, etc. 6. Total cash paid out (5a through 5w) 7. Cash position (end on month) (4 minus 6)-Enter this amount in (1) Cash on hand following monthEssential operating data (non-cash flow information)-This is basic information necessary for proper planning and for proper cash flow projection.Also with this data, the cash flow can be evolved and shown in the above form. A. Sales volume (dollars)This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic anticipated sales (actual sales, not orders received). B. Accounts receivable (end of month)-Previous unpaid credit sales plus current months credit sales, less amounts received current month (deduct C below) C.Bad debt (end on month) Bad debts should be subtracted from (B) in the month anticipated D. Inventory on hand (end on month) Last months inventory plus merchandise received and/or manufactured current month minus amount sold current month E. Accounts payable (end of month) Previous months payable plus current months payable minus amount paid during month. F. Depreciation-Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service