profit-loss account 34

May 13th, 2015
Studypool Tutor
Abraham Lincoln University
Price: $25 USD

Tutor description

profit and loss statement describe PROFIT FORECASTING

Word Count: 1561
Showing Page: 1/7
PROFIT FORECASTINGForecasting, particularly on a short-term basis (one year to three years), is essential to planning for business success. This process, estimating future business performance based on the actual results from prior periods, enables the business owner/manager to modify the operation of the business on a timely basis. This allows the business to avoid losses or major financial problems should some future results from operations not conform with reasonable expectations. Forecasts - or Pro Forma Income Statements and Cash Flow Statements as they are usually called - also provide the most persuasive management tools to apply for loans or attract investor money. As a business expands, there will inevitably be a need for more money than can be internally generated from profits.Profit forecast is the amount of profit a company expects to make at the end of the period. The monthly profit and loss forecast will consist of the following:Sales Cost of sales Gross Profit Overheads Total Overheads Miscellaneous income Net Profit FACTORS AFFECTING PROFIT FORECASTINGPreparation of Forecasts (Pro Forma Statements) requires assembling a wide array of pertinent, verifiable facts affecting your business and its past performance. These include:Data from prior financial statements, particularly:1. Previous sales levels and trends 2. Past gross percentages 3. Average past general, administrative, and selling expenses necessary to generate your former sale

Review from student

Studypool Student
" Thanks, good work "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1830 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors