cash flow (pro forma statement)

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Cash Flow (Pro Forma statement). Financial Planning. Financial statement. Cash flow pro forma statement Income statement Balance sheet. Usually prepare for 3 years projection. Project Implementation cost. - PowerPoint PPT Presentation

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  • Financial Planning

  • Cash flow pro forma statementIncome statementBalance sheet Usually prepare for 3 years projection

  • Involve all type of cost to enable company to start the operation (whether short term or long term)Purpose: to estimate total budget required in order to start with the businessShort term costworking capital required until business able to gain salesworking capital depends on how long business able to get profit from the salesLong term cost Involve capital investment i.e. machine, plant and equipment

  • Capital InvestmentLandBuy or own list in project costLease- a part of deposit

    BuildingBuy or own current cost of the buildingLease list in deposit

    Renovation

    Machine and EquipmentRent list in depositHire purchase current cost

    Furniture and office equipment

    VehiclesRent list in deposit

  • Expenses for :Legal feeCompany registrationLicense feeExpertise servicesFeasibility studiesInsuranceetc

  • Allocation for financing the daily operation such asBuy raw materialInventoryAdministrative expensesFactory overheadOther expenses involve companys operation

    Working capital is usually prepared for 1 to 3 months depending on how long the company able to gain its first sales

  • To overcome increases in material priceMiscalculation during preparing the project implementation costUsually 5 10% from project cost

  • SalaryFeeAccountingBank chargeMaintenance and repairElectric, water and telephoneInsuranceRentalLegal feesPost & stampPrinting & stationaryStaff trainingtravelling

  • Promotion1% of total salesExample: Sales projection = 283,880Promotion expenditure = 2840DeliveryFluctuate from year to yearEstimate from previous year average rateVehicle expenditureSemi fluctuateFixed componentRoad taxInsurance of vehicleFluctuate componentEstimation of 0.3% from sales

  • ADMINISTRATIVE EXPENDITUREMARKETING EXPENDITUREOPERATIONS EXPENDITUREFixed AssetsRMFixed AssetsRMFixed AssetsRMLand & Building 50,000 Furnitures 9,000 Signboard 5,000 Machinary and Equipment 100,000 Computer 5,000 van 70,000 Lorry 80,000 Renovation 30,000 Forklif 130,000 Equipment 7,000 Working CapitalWorking CapitalWorking CapitalSalary, EPF & SOCSO 10,000 advertisement and promotion 1,000 Raw Materials & Packaging 39,000 Travelling allowance 100 Carriage Inward & Dutypetrol/diesel 250 Salaries, EPF & SOCSO 3,363 Salary,EPF & SOCSO 900 petrol/diesel 500 Other ExpenditureOther ExpenditureOther ExpenditureOther Expenditure200Other Expenditure300Other Expenditure400Pre-OperationPre-OperationPre-OperationDeposit (rent, utilities, etc.) 7,200 Deposit (rent, utilities, etc.)Deposit (rent, utilities, etc.)Business Registration & Licences 300 Business Registration & LicencesBusiness Registration & LicencesInsurance & Road Tax for Motor VehicleInsurance & Road Tax for Motor Vehicle 2,000 Insurance & Road Tax for Motor Vehicle 1,000 Other Expenditure 100 Other Expenditure 2,200 Other Expenditure 1,350 TOTAL 118,800 TOTAL 81,750 TOTAL 355,613

  • depreciationTotal = RM672408

    ABC Construction PROJECT IMPLEMENTATION COST & SOURCES OF FINANCEProject Implementation Cost Sources of FinanceRequirementsCostLoanHire-PurchaseOwn ContributionFixed Assets Cash Existing F. AssetsLand & Building50,000 40,000 10,000 Furnitures9,000 600 5,400 3,000 Computer5,000 1,000 4,000 Renovation30,000 24,400 5,600 Equipment7,000 5,000 2,000 Signboard5,000 3,500 1,500 van70,000 45,000 21,000 4,000 Machinary and Equipment100,000 34,000 58,000 8,000 Lorry80,000 50,000 25,000 5,000 Forklif130,000 105,000 23,000 2,000 Working Capital2months Administrative20,004 15,004 5,000 Marketing4,500 3,300 1,200 Operations85,726 75,726 10,000 Pre-Operations & Other Expenditure15,050 9,050 6,000 Contingencies10%61,128 58,128 3,000 TOTAL672,408 469,708 132,400 70,300

  • For every fixed assets excluding landMethods:Straight line methodsDeclining balance

  • FIXED ASSETSEcon. Life (yrs)FIXED ASSETSEcon. Life (yrs) Furnitures 55 Computer 55 Renovation 5Machinary and Equipment5 Equipment 5Lorry5 Signboard 5Forklif5 van 55

  • Depreciation value per year = (Original Price Scrap Value)/Economy Life=(9000 0)/5=RM 1800/ year

    Scrap value = estimation of asset value at its last year of economy life

    Fixed AssetFurnituresCost (RM)9,000MethodStraight LineEconomic Life (yrs)5 AnnualAccumulated YearDepreciationDepreciationBook Value - - 9,000 1 1,800 1,800 7,200 2 1,800 3,600 5,400 3 1,800 5,400 3,600 4 1,800 7,200 1,800 5 1,800 9,000 - 6 0 0 - 7 0 0 - 8 0 0 - 9 0 0 - 10 0 0 -

  • LOAN (if required)Interest rate10%Loan duration5Interest payment method*2* Method: 1 = flat rate 2 = annual rest

  • HIRE-PURCHASE (if required)Interest rate5%Hire-purchase duration8

  • LoanHire Purchase

    ABC Construction PROJECT IMPLEMENTATION COST & SOURCES OF FINANCEProject Implementation Cost Sources of FinanceRequirementsCostLoanHire-PurchaseOwn ContributionFixed Assets Cash Existing F. AssetsLand & Building50,000 35,000 15,000 Furnitures9,000 600 5,400 3,000 Computer5,000 1,000 4,000 Renovation30,000 24,400 5,600 Equipment7,000 5,000 2,000 Signboard5,000 3,500 1,500 van70,000 45,000 21,000 4,000 Machinary and Equipment100,000 34,000 58,000 8,000 Lorry80,000 50,000 25,000 5,000 Forklif130,000 105,000 23,000 2,000 Working Capital2months Administrative20,000 15,000 5,000 Marketing4,500 3,300 1,200 Operations85,726 75,726 10,000 Pre-Operations & Other Expenditure15,050 9,050 6,000 Contingencies10%61,128 58,128 3,000 TOTAL672,404 464,704 132,400 75,300

  • RM4647045 years464704 x 10%92941+46470464704-92941

    ABC ConstructionLOAN & HIRE-PURCHASE AMMORTISATION SCHEDULES

    LOAN REPAYMENT SCHEDULEHIRE-PURCHASE REPAYMENT SCHEDULEAmount464,704Amount132,400Interest Rate10%Interest Rate5%Duration (yrs)5Duration (yrs)8MethodBaki Tahunan YearPrincipalInterestTotal PaymentPrincipal BalanceYearPrincipalInterestTotal PaymentPrincipal Balance - - 464,704 - - 132,400 1 92,941 46,470 139,411 371,763 1 16,550 6,620 23,170 115,850 2 92,941 37,176 130,117 278,822 2 16,550 6,620 23,170 99,300 3 92,941 27,882 120,823 185,881 3 16,550 6,620 23,170 82,750 4 92,941 18,588 111,529 92,941 4 16,550 6,620 23,170 66,200 5 92,941 9,294 102,235 - 5 16,550 6,620 23,170 49,650 6 0 0 - - 6 16,550 6,620 23,170 33,100 7 0 0 - - 7 16,550 6,620 23,170 16,550 8 0 0 - - 8 16,550 6,620 23,170 - 9 0 0 - - 9 0 0 - - 10 0 0 - 10 0 0 - -

  • Cash inflow and cash outflow for operation cost or buying fixed assetCash inflowCash sales, capital(in cash), loan, account receivableCash outflowRaw material, administrative expenditure, factory overhead etcBalance of cash at certain period of timeUsually prepared for 3 years of operation1st year is in monthly basisPrior to pro forma statement, sales forecasting must be prepared first (from marketing planning)

  • SALES PROJECTIONMonth 1 3,600 Month 2 4,000 Month 3 4,800 Month 4 4,800 Month 5 4,800 Month 6 6,000 Month 7 6,000 Month 8 6,400 Month 9 6,400 Month 10 6,000 Month 11 6,000 Month 12 6,000 Total Year 1 64,800 ToTal Year 2 74,520 Total Year 3 89,424

  • OPERATIONS EXPENDITUREFixed AssetsRMMachinary and Equipment 100,000 Lorry 80,000 Forklif 130,000 Working CapitalRaw Materials & Packaging 9,000 Carriage Inward & DutySalaries, EPF & SOCSO 3,363 petrol/diesel 500 Other ExpenditureOther Expenditure400Pra-OperasiDeposit (rent, utilities, etc.)Business Registration & LicencesInsurance & Road Tax for Motor Vehicle 1,000 Other Expenditure 1,350 TOTAL 325,613

    PURCHASE PROJECTIONMonth 1 9,000 Month 2 10,000 Mo