Forecast pro forma financial statements (balance sheet, income statement, cash flow statement) for a new company based on the background information I will provide to you about the company. Year 1 should be broken out by months, while Year 2 and 3 can be forecasted by Quarter (4 quarters total). All the financial statements should be created on excel, and apart from the pro forma financial statements should also include tabs that contain the Cost of Goods Sold, schedule of Fixed Assets, & Operating expenses.
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– Balance Sheet
– Income statement
– Cash Flow Statement
– Fixed Asset Schedule with depcriation
– Head Count Schedule (Title, salary, hire date, payroll amount needs to be reasonable)
Print as landscape presentation, identifiers on all columns,
My Name
Name of business
3 financial statements
– Balance Sheet
– Income Statement
– Cash flow statement (either direct method [receipts/dispersements] or indirect method [is broken up into operating cash flows, investment cash flows and financing cash flows]
o Should have totals
o Either one should how a reconciliation at bottom showing cash at beginning and cash at the end
2 supplementary schedules
3 years of financial statements
– Year 1 by month
– Year 2 & 3 by quarter
– IS & CF should have totals
– First year = 13 columns
– Second and thir year = 10 columns
– Balance sheet starts at first month of operations
– Can have equity at year 0 before any transactions are made
– Cant have retained earnings
– Schedule of fixed assets
o What we need to make business operational
o Straight line depreciation
o Asset lives
§ Computers = 3 years
§ Furniture + leases = 5 years
§ Buildings = 39 years
· Operating lease = rentà no asset and no depreciation
· Lease hold improvement? If you need to make any changes to the building to make it usable
– Business needs to start with equity
Operating Expenses:
– Wages and Salaries
– Payroll tax = 8% of payroll on top of payroll (paid same time you pay payroll)
– Commissions paid to employee are subject to payroll tax
– Commissions paid to sales reps are not subject to this tax
– Bonuses:
o Health insurance- cost about $1,200 per month per employee (inclusive of family)
§ Can be more if you are making them do something dangerous: driving, machine labor
– Insurance:
o Workers compensation: $100 per employee per month
o Fire
o Business insurance
– Marketing
o Advertising
o Promotion
o Trade Shows
o Samples
o Market Research
– Utilities
o Electricity, heat, power
– Office supplies
– Training
– Prepaid expenses (asset on BS)- amortize it 1/12th per month (but no cash changes throughout year until you run out)
– Repairs & Maintenance
– Travel Expenses
– Entertainment- meals
– Rent
– Telecom- phone, internet, cable
– Trash removal
– Cleaning
– Legal & Professional fees
– Licenses
– Research + Development
– Depreciation + Amortization
– Car Expense
– Freight/postage
– Dues/Subscriptions (Microsoft office)
– Donations
NOTES:
– If you have product, you need cost of sales
– Cant have cost of sales for inventory you havent accounted for or tracked
– Need to have a list of operating expenses
– Loans + interest
– US Taxes
o Profit- takes percentage of EBT
o Loss before profit- will receive a tax credit of percentage of loss (No cash received).
o Account for tax credit by being a negative current liability (taxes payable) or being a deferred tax asset. Cumulative.
– Tax credits will accumulate
– Retained Earnings will accumulate
– An increase in a current asset & decrease in a liabilityà Inflow of cash