Moyou financial projection Essay Example | Topics and Well Written Essays - 750 words

Moyou financial projection - Essay ExampleThe information is based on forecasts. Forecasting is used in estimating future performance of the business (Shim and Siegel 2007). It is multipurpose in the financial planning process which entails assessing future financial needs. Investors use forecasting to value a company and determine its security. Pro forma statements show forecasts for periods ranging from 1-5 years. This reveal will assess the financial viability of MoYou by carrying out financial projections. The projections are based on the data obtained from the entrepreneur of the organization during an interview. According to the entrepreneur, one-year sales add up to ?1 million. The Cost structure is as follows The average cost is 3-5 USD per bundle unit. plate - 1$, nail polish 0.9$ Moyou is paying manufactures for sedulousness according to their supply as mentioned above variable- delivery and jaunt cost varies according to speed of delivery, and its range is from 0.3- 0.7 USD per unit. Service cost- Moyou customer service is based in Brent cross fixed cost- ?900 per month, variable cost- ?150 per month, staff wages- ?2750 per month. Media and Public relations costExhibitions cost- ?750 annual and cost Marketing and brand development cost- ?2150 annual cost Income statement projections In the income statement forecast as shown in appendix 1 we assume Sales grow at 10% annually Variable costs vary with the number of units sold All units produced are assumed to be sold Fixed costs remain constant end-to-end except the marketing, and product development costs Tax rate of 24% is to remain constant Marginal costing method has been used in intercommunicate the income statement. Appendix INCOME STATEMENT FORECAST 2013 2014 2015 2016 2017 Number of units sold 100,000 110,000 121,000 133,100 146,410 sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100 Less variable costs Variable service costs 1,800 1,980 2,178 2,396 2,635 variable delivery & d ispatch costs 50,000 55,000 60,500 66,550 73,205 Direct labor costs Plate 90,000 99,000 108,900 119,790 131,769 Nail 100,000 110,000 121,000 133,100 146,410 sum Variable costs 241,800 265,980 292,578 321,836 354,019 Less overheads costs Fixed service costs 10,800 10,800 10,800 10,800 10,800 provide wages 33,000 33,000 33,000 33,000 33,000 Media and Public relations Exhibitions costs 9,000 9,000 9,000 9,000 9,000 Marketing and brand development 25,800 28,380 31,218 34,340 37,774 78,600 81,180 84,018 87,140 90,574 Net Profit Before Tax 679,600 752,840 833,404 922,024 1,019,507 Tax 24% (163,104) (180,682) (200,017) (221,286) (244,682) Operating income 516,496 572,158 633,387 700,739 774,825 The operational income is a projection of financing the company needs. Projected balance sheet BALANCE SHEET FORECAST Fixed Assets 2013 2014 2015 2016 2017 Property, plant & Equipment 1,200,000 1,080,000 972,000 874,800 787,320 Current Assets Inventories 300,500 301,500 301,500 301,500 301,500 Cash 500,000 730,658 600,000 650,000 730,000 Accounts receivables 215,996 150,000 450,887 524,439 557,905 Total Assets 2,216,496 2,262,158 2,324,387