Twelve Month Pro Forma Budgeted Income Statement

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kbknatvr123

Business Finance

Description

Considering your Cloud Ware Company, compare the November ending Profit and Loss Statement with the end of December Profit and Loss statement. This work should be done in Excel.

Compare the November Balance Sheet with the balance sheet as of December 31st. After analyzing the statements, answer the following questions:

  • What is the financial situation of the company as of November 30?
  • Did the financial situation improve, remain the same, or start to decline through the month of December?
  • What areas of strength exist in the company? What are the company's weaknesses?
  • What are some areas where the company has opportunities for growth for the company's financial situation?
  • To help you justify the above answers, financial ratios should be calculated. At minimum, the following ratios should be calculated and used to support your arguments:
    • Debt to Equity Ratio (Total Liabilities/Equity) This ratio provides a look at how much the creditors have put into the company compared to how much the owners have put into the company.
    • Current Ratio (Current Assets/Current Liabilities) This provides a look at whether the business has enough current assets to pay their current liabilities.
    • Profit Margin (Net Income/Sales) This provides a measure of how much profit is earned on each dollar of sales.

You have decided to request a bank loan to expand your Cloud Ware business and the lender has asked for a one-year projection of revenue and expenses. To request the loan, you will need to create a Pro Forma one year budgeted income statement broken down over 12 months. You will need to look at the actual ending financial statements for October, November, and December and use this data to help create the forecast for the next fiscal year of business.

Using financial ratios will be critical in supporting your argument for the loan and be aware that most bankers or lenders will not even consider a loan prospect without addressing, for example, the impact of additional debt on your debt to equity ratio.

Note: Excel must be used for creating the analysis and budget and must include formulas for all mathematical calculations including adding, subtracting and sums of columns or groups of cells.

Save your assignment as a Microsoft Excel document.

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Explanation & Answer

Attached.

QB Cloud_Angela Montelpare
Income Statement
As of Dec. 1, 2018

As of Dec. 31, 2018

Total
Income
401 Sales
Total Income
Cost of Goods Sold
501 Cost of Goods Sold
Total Cost of Goods Sold
Gross Profit
Expenses
601 Advertising
603 Bank Charges
605 Subscription
619 Meals and Entertainment
621 Office Supplies
625 Repair & Maintenance
627 Shipping and delivery expsense
629 Stationery and Printing
633 Telephone Expense
635 Utilities
Total Expenses
Net Operating Income
Net Income

$

24,330.00
24,330.00

$
$

9,165.00
9,165.00
15,165.00

$
$
$

Total

Percentage
change (increase)

$

31,140.00
31,140.00

28%

$
$

12,570.00
12,570.00
18,570.00

37%
37%
22%

530.00
40.00
150.00
229.70
460.42
140.00
253.45
553.18
398.77
163.32
2,918.84 $
12,246.16 $
12,246.16 $

705.00
60.00
275.00
282.51
538.78
290.00
300.45
669.00
557.09
248.65
3,926.48
14,643.52
14,643.52

33%
50%
83%
23%
17%
107%
19%
21%
40%
52%
35%
20%
20%

Comparing the profit and loss account for November and December, the has been an increasing trend for all th
The Total income increased by 28% and the net income increased by 20%.
The decrease in the percentage change of total income with respect to net income was as a result of high expen
The increase in total expenses for the between the two periods was 35%. Higher than the total income.
In addition, the total cost of goods sold increased more than the total income, a contributing factor for the sma

Projections

28%
37%
37%
22%
22%
20%
28%
23%
17%
25%
19%
21%
10%
25%
35%
20%
20%
an increasing trend for all the items in the statement.

was as a result of high expenses.
an the total income.
ntributing factor for the small percentage change in net income.

...


Anonymous
Just what I needed…Fantastic!

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