This document discusses various techniques for financial forecasting and projections. It provides an overview of preparing pro forma income statements and balance sheets using percentage of sales and budgeted expense methods. An example pro forma income statement and assumptions are presented. Key points covered are sales forecasting techniques, calculating external funding requirements for growth, and preparing other supporting financial projections like cash budgets and operating budgets.
9. Proforma Income Statement Actual figures for Quarter 31-3-2006 Assumptions Proforma for the qr ended 30-6-2006 1.No.of units sold 2.Net Sales 3.Cost of Goods sold: 4.Labour 5. Materials 6.Distribution cost 7. Overhead 8. Total 9. Ratio of CGS to Sales. 10. Gross Profit 11. GP Margin 14000 140000 100% 22960 25256 4592 61992 114800 82.0% 25200 18% Sales decline 30% due to low demand. No change in Product mix. 20% of Cost of good 22% of COG 4% of COG 54% of COG Increase by 1.5% 9800 98000 100% 16366 18002.6 3273.2 44188.2 81830 83.5% 16170 16.5%
10. Contd. Actuals Assumption Proforma 12. Expenses: 13. Selling Expenses 14. Admin. Expense 15. Others 16.Total 17. Operating Profit 18. Interest 19. Depreciation 20.PBT 21. Tax @ 30% 22.Net Income 23.Dividends 24.Retained earnings. 25. Cash flow after dividends. 8250 4450 Nil 12700 12500 2500 2000 7000 2100 4900 900 4000 6000 A drop of Rs. 750 . A drop of Rs. 850 Rs.2000 only No dividends Carried to B/s. Retained earning + Depreciation 7500 3600 Nil 11100 5070 2000 2000 1070 321 749 0 749 2749
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19. External funding Requirement (EFR) is calculated as follows : EFR= A/S ( Δ S) –L/S ( Δ S) – m S1(1-d) Where, EFR= external funds requirement A/S = Current Assets and Fixed Assets as proportion of Sales L/S= CL and Provisions (spontaneous liabilities) as a proportion of Sales. Δ S= Expected increase in sales. M = Net profit Margin S1= Projected sales for next year d = dividend payout ratio
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