Financial Projections Cash Flow Basics & How to Think About Numbers

What are Financial Projections? Looking at the future and estimating financial transactions Financial statements are a standard representation of your financial picture. The statements consist of: 1. Balance Sheet 2. Income Statement aka P&L 3. Statement of Cash Flows 4. Footnotes

Cash flow builds your Financial Statements Income: Sales by product/service Related expense (COGS) Expense: Fixed Cost Rent, Insurance, Equipment Lease, Dues Variable Cost Payroll and related taxes Advertising, Maintenance, Travel

Financial Projections Cash Flow Basics & How to Think About Numbers  Looking at the future and estimating financial transactions  Considering Income and Expenses  Accuracy in reporting

Worksheet for Financial Projections

First YearSum2-5 YearsSum MonthlyAnnualQuarterlyAnnual Operating Expenses: Payroll Payroll Taxes Rent Utilities Cam Charges Office Supplies Linen Cleaning and maintenance Professional fees Decorations Software

Worksheet for Financial Projections First YearSum2-5 YearsSum MonthlyAnnualQuarterlyAnnual Depreciation Bank loan Interest Website Telephone Dues Training Travel Meals Conferences Total operating expenses

Worksheet for Financial Projections First YearSum2-5 YearsSum MonthlyAnnualQuarterlyAnnual Operating Profit (Loss) Income tax Net Profit Cash Flow Adjustments: Inflow: Owners’ Contribution Access Line of Credit Bank Loan Depreciation – (what again!)

Worksheet for Financial Projections First YearSum2-5 YearsSum MonthlyAnnualQuarterlyAnnual Outflow: Repayment of Line of Credit Repayment of bank loan Reimburse Owner Inventory purchases Fixed Asset purchases Periodic cash flow Cumulative Cash Flow

Financial Projections Cash Flow Basics & How to Think About Numbers  Estimate Income and Expenses  To determine the cumulative cash flow

What do the numbers mean?  Financial data an accountant – CPA can provide  Restrictions  What are the banks looking for?  Why did the lender ask for certain documents?  Why are your numbers important now and in the future?

Who are the professionals working for you? Business, Family, Fun Accountant Attorney Lender Marketing Advertising Vendors Customers

Resources Dutchess County Regional Chamber of Commerce x1000 Small Business Development Center – John Moriarty x1014 AICPA.org * NYSSCPA.org * go.NCCPAP.org Tompkins Mahopac Bank - Tim Every X30768 Community Capital New York - Simone Obermaier SCORE Nancy Kappler-Foster – x1021 Poughkeepsie Library - poklib.org For federal tax rates - IRS.gov For New York State - Tax.NYS.gov New York State license professional - op.nysed.gov/prof

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