Access over 20 million homework & study documents

search

We are Right and You Need Us

Content type
User Generated
Rating
Showing Page:
1/5
Surname 1
Surname
Tutor
Course
Date
We are Right and You Need Us
Financial Model
We are Right and You Need Us
Current
Forecast
Financial Statements
Year 1
year 2
Year 3
Year 4
Year 6
Income Statement
Revenue
$
1,800,000.00
$
1,980,000.00
$
2,160,000.00
$
2,700,000.00
$
3,420,000.00
Cost of Service
Trips
$
225,000.00
$
291,500.00
$
336,000.00
$
390,000.00
$
44,100.00
New Computer and
Software
$
15,000.00
$
16,500.00
$
18,000.00
$
19,500.00
$
22,000.00
Gross Profit
$
1,560,000.00
$
1,672,000.00
$
1,806,000.00
$
2,290,500.00
$
3,353,900.00
Expenses
Salaries and Benefits for
employees
$
216,000.00
$
216,000.00
$
234,000.00
$
270,000.00
$
288,000.00
Rent and Overheads
$
72,000.00
$
72,000.00
$
78,000.00
$
11,400.00
$
12,000.00
Electricity
$
6,000.00
$
6,800.00
$
7,500.00
$
8,400.00
$
9,000.00
Fuel
$
5,000.00
$
5,000.00
$
5,500.00
$
7,000.00
7500

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/5
Surname 2
Total Expenses
$
299,000.00
$
299,800.00
$
325,000.00
$
296,800.00
$
316,500.00
Earnings Before Tax
$
1,261,000.00
$
1,372,200.00
$
1,481,000.00
$
1,993,700.00
$
3,037,400.00
Share of profit for
each partner (A, B, C)
$ 420,333
$ 457,400
$ 493,667
$ 664,567
$ 1,012,467
The financial model for “We are Right and You Need Us” partnership aims at forecasting
the business profits over a period of five years. Some assumptions have been made of what is
expected to happen in the oncoming five years in order to establish a realistic financial model. In
particular, the partners are expected to have acquired more customers. Similarly, the businesses
expenses are expected to increase during this period.
Year 1
In year 1, the business has sales of $150,000 per month, which results in a revenue of
$180,000 annually. The three business partners average 30 trips a year at a cost of $2,500 per
trip. Therefore, the annual cost of the trips is $225,000. Additionally, each partner purchases a
computer at $5000 in the year, which translates to $15000 for all the partners. Therefore, the
gross profit for the partnership is $1,560,000.
In year 1, the salaries and benefits expense for employees are $216,000. The annual rent,
electricity, and fuel expenses for the business is $72,000, $6,000, and $5,000 respectively.
Therefore, the total expense for the business is $299,000 per annum. The earnings before tax for
all partners in the year are $ 1,261,000.00. Since all partners have an equal contribution in the
partnership, they each receive an earnings before tax income of $ 420,333.
Year 2

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/5

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 5 pages?
Access Now
Unformatted Attachment Preview
Surname 1 Surname Tutor Course Date We are Right and You Need Us Financial Model We are Right and You Need Us Current Forecast Year 1 year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ $ $ 1,800,000.00 1,980,000.00 2,160,000.00 2,700,000.00 3,240,000.00 3,420,000.00 $ $ $ $ $ $ 225,000.00 291,500.00 336,000.00 390,000.00 405,000.00 44,100.00 New Computer and $ $ $ $ $ $ Software 15,000.00 16,500.00 18,000.00 19,500.00 21,000.00 22,000.00 Gross Profit $ $ $ $ $ $ 1,560,000.00 1,672,000.00 1,806,000.00 2,290,500.00 2,814,000.00 3,353,900.00 Salaries and Benefits for $ $ $ $ $ $ employees 216,000.00 216,000.00 234,000.00 270,000.00 270,000.00 288,000.00 Rent and Overheads $ $ $ $ $ $ 72,000.00 72,000.00 78,000.00 11,400.00 11,400.00 12,000.00 $ $ $ $ $ $ 6,000.00 6,800.00 7,500.00 8,400.00 8,400.00 9,000.00 $ $ $ $ $ 7500 5,000.00 5,000.00 5,500.00 7,000.00 7,000.00 Financial Statements Income Statement Revenue Cost of Service Trips Expenses Electricity Fuel Surname 2 Total Expenses Earnings Before Tax Share of profit for $ $ $ $ $ $ 299,000.00 299,800.00 325,000.00 296,800.00 296,800.00 316,500.00 $ $ $ $ $ $ 1,261,000.00 1,372,200.00 1,481,000.00 1,993,700.00 2,517,200.00 3,037,400.00 $ 420,333 $ 457,400 $ 493,667 $ 664,567 $ 839,067 $ 1,012,467 each partner (A, B, C) The financial model for “We are Right and You Need Us” partnership ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Really helped me to better understand my coursework. Super recommended.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4