Business Plan Financial Projections

Example Income Statements The income statement (profit and loss statement) shows the revenue, expenses, and net income (or net loss) for a period of time. Net income is the amount by which total revenue exceeds total expenses. The resulting profit is added to the retained earnings account (accumulated earnings of a company since its inception less dividends). A net loss reduces the retained earnings account. The projected income statements demonstrate that your business has the ability to earn profits over time.
	Year 1	Year 2	Year 3	Year 4	Year 5
Revenues	$1,976,000	$2,074,800	$2,178,540	$2,287,467	$2,401,840
Cost of Sales	1,213,659	1,274,342	1,338,059	1,404,962	1,475,210
Gross Profit	762,341	800,458	840,481	882,505	926,630

Accounting	6,000	6,300	6,615	6,946	7,293
Advertising & Promotion	15,000	12,360	12,731	13,113	13,506
Bank Charges	41,496	43,571	45,749	48,037	50,439
Compensation & Benefits	246,643	254,042	261,663	269,513	277,598
Consulting Fees	2,400	0	0	0	0
Insurance	1,000	1,050	1,103	1,158	1,216
Lease – Facilities	336,000	336,000	336,000	336,000	336,000
Legal & Professional	500	500	500	500	500
Licenses & Fees	500	510	520	531	541
Maintenance	600	612	624	637	649
Miscellaneous	1,800	1,836	1,873	1,910	1,948
Office Supplies	2,700	2,754	2,809	2,865	2,923
Security	720	742	764	787	810
Telephone	1,800	1,836	1,873	1,910	1,948
Utilities	4,200	4,410	4,631	4,862	5,105
Website	1,800	1,800	1,800	1,800	1,800
Total Sales, General & Admin Expense	663,159	668,322	679,254	690,568	702,277
Earnings Before Interest, Depr. & Tax	99,182	132,136	161,227	191,937	224,353
Depreciation Expense	4,916	4,916	4,916	4,916	4,916
Operating Profit	94,266	127,220	156,311	187,021	219,437
Interest Expense	43,199	40,274	37,059	33,524	29,639
Earnings Before Taxes	51,068	86,946	119,252	153,497	189,798
Income Taxes	17,873	30,431	41,738	53,724	66,429
Net Income	$33,194	$56,515	$77,514	$99,773	$123,369

Example Balance Sheets The balance sheet is a statement of financial position that shows total assets = total liabilities + owners' equity. Financial position refers to the amount of resources (i.e., assets) and the liabilities of the business on a specific date. Owners' equity is the residual interest, or the amount of the assets to which the owners have claim because creditor claims (liabilities) legally come first. Owners' equity in a business derives from two sources: (1) paid-in capital, which is the investment of cash or other assets in the business by the owner or owners; and (2) retained earnings, which are the accumulated profits of the business less the losses and withdrawals. The purpose of the balance sheet is to report the financial position of a business at a particular point in time.
	Begin	Year 1	Year 2	Year 3	Year 4	Year 5
Cash	$33,150	$110,697	$210,697	$243,259	$293,834	$363,370
Inventories	425,000	425,000	424,781	446,020	468,321	491,737
Prepaid Leases	28,000	28,000	28,000	28,000	28,000	28,000
Total Current Assets	$486,150	$563,697	$663,478	$717,279	$790,154	$883,107

Prop., Plant & Equip	33,850	33,850	33,850	33,850	33,850	33,850
Less: Accum. Depreciation	0	4,916	9,831	14,747	19,663	24,579
Net Property, Plant & Equip.	33,850	28,934	24,019	19,103	14,187	9,271
Total Assets	$520,000	$592,631	$687,496	$736,382	$804,341	$892,378

Accounts Payable	0	68,908	139,654	146,637	153,968	161,667
L-T Debt	468,000	438,529	406,133	370,522	331,377	288,346
Total Liabilities	468,000	507,437	545,787	517,159	485,345	450,013

Owners’ Equity
Paid-in Capital	52,000	52,000	52,000	52,000	52,000	52,000
Retained Earnings	0	33,194	89,709	167,223	266,996	390,365
Total Liabilities & Equity	$520,000	$592,631	$687,496	$736,382	$804,341	$892,378

Example Cash Flow Statements Revenue does not necessarily mean receipt of cash, and expense does not automatically imply a cash payment. Net income and net cash flow (cash receipts less cash payments) are different. For example, taking out a bank loan generates cash, but this cash is not revenue since no merchandise has been sold and no services have been provided. Loan repayments consume cash, but do not reduce income - they are recorded as a reduction to liabilities. In our income statement example (above), although net income for Year 1 was $33,194, cash flow was $77, 547. The beginning cash balance in Year 1 was $33,150. Cash flow in Year 1 was $77,547. Add the two, and the ending cash balance in Year 1 becomes $110,697. Your statements "tie together." This is a simple check potential investors or lenders will perform.
	Year 1	Year 2	Year 3	Year 4	Year 5
Operating Profit	$94,266	$127,220	$156,311	$187,021	$219,437
Depreciation Add Back	4,916	4,916	4,916	4,916	4,916
	99,182	132,136	161,227	191,937	224,353
Increm Working Capital Investment	-68,908	-70,965	14,256	14,969	15,718
Cash From Ops Bef Interest/Taxes	168,090	203,101	146,970	176,968	208,635
Interest Expense	43,199	40,274	37,059	33,524	29,639
Income Taxes	17,874	30,431	41,738	53,724	66,429
Net Cash Flow Before Debt Payment	107,018	132,396	68,173	89,720	112,567
Debt Payment	29,471	32,396	35,611	39,145	43,031
Change in Cash	77,547	100,000	32,562	50,574	69,536
Your business plan is the heart and soul of your operation and the most important set of documents you will provide a lending institution or potential investor. The Business Plan Store will prepare detailed financial projections for your business or your business plan that express your vision in terms of dollars and units of time, and in a format that is easily understandable to all people in the lending industries.

The Business Plan Store
201 Alderfer Road
Suite 300
Harleysville, PA 19438
Call Us: 215-256-0663
FAX: Please Call For Number
Email: Please Use the Form

Business Plan Writer?

Business Plans Must Include Financial Forecasting!

Business Plan Financial Projections

Example Income Statements

Example Cash Flow Statements