Practice Venture Worksheet FINANCIAL PLANNING AND FORECASTING TEMPLATE

Context

• Three students start a Mentor Connect company. It is an AI powered ecosystem connect app , and all interactions happen
online through its mobile app.
• The basic starting cost is the website design and development cost and the cost of office computers. We have considered a
fixed deposit of 6 months rentals as is the norm for office space. The cost of company registration is taken into account along
with professional consultation fees.
• The total startup investment is INR 1,000,000. Half of the amount is invested by founders and the other half is interest-
free loan from friends and family.
• The products being sold are ' One Hour of Mentoring 'for now. These are one on one sessions that are purchased in advance
and paid for by the Entrepreneur mentee, The standard size is a 10hr pack . Mentors pay a listing fee for being on the app ,
additional revenues by way of in-line app advertising and mentor connect event sponsorhips can be factored in at later stages .
For simplicity of understanding only revenues accruing from Mentoring pack sales is considered.

• COGS is INR 700. This includes the cost of INR 400 per hour being paid to the Mentor for the engagement.
• The selling price is at INR 10000. The major expenses are online marketing costs, digital support services , founder’s
salary, and early employees' salaries, and server costs.
• The founders work all by themselves till month 4, then they start adding employees. The total employee count at the end of the
year is 5. Not including the founders.

© 2018 Wadhwani Foundation

 Mentorapp C
Startup Costs INR
Business Registration fees 15000
Product Development 95000
Website Design and Development 75000
Computer Systems 150000

Total 335,000.00

Revenues (for 30 days)

Number of customers 150
Units per purchased 1
Price per unit (selling price) 10000
Purchase frequency 1
Total sales in units 150
Total sales revenue (INR) 1,500,000.00
 Mentorapp Company Example
Salary per No. of
Fixed Costs (for a month) INR employee employees
Salary 60000 20000 3
Advertising & Promotion 20000
Utilities (Electricity), Office supply 15000
Rent
Digital Marketing & Cust Services 30000
Total 125,000.00

Customers (per day) No. of days

5 30
Variable Costs (per unit) Cost Unit Rate (INR)
Driver Fee 1500 10 400
Server Charges 2000 10 200
Coordination Expenses 800 10 80
Miscellanous 200 10 20

Total 4500

SUMMARY
Revenue INR
Sales 1,500,000.00
Other Revenue Sources

Total 1500000

Profit 700,000.00
Breakeven 23
Pay back period
(months) 0.48
Contribution 5500
Practice Venture Worksheet START-UP COSTS

Starting Costs

Startup Cost ₱ 335,000.00

Business Registration fees ₱ 15,000.00

Product Development ₱ 95,000.00
Website Design and Development ₱ 75,000.00
global.org:
Computer Systems ₱ 150,000.00 This amount is
0 ₱ - budgeted for future
requirement to
Capital Work in Progress ( Fixed Asset ) ₱ 250,000.00 purchase additional
workstations
Additional Workstation ₱ 250,000.00

Starting Operations ( Budgeted )

₱ 415,000.00

Salary ₱ 360,000.00
Advertising & Promotion ₱ 120,000.00
Utilities (Electricity), Office supply &Misc ₱ 90,000.00
Rent ₱ -
Digital Marketing & Cust Services ₱ 180,000.00

Start-up capital
₱ 1,000,000.00

Share Captial (by Team) ₱ 500,000.00

Loans (from Bank or Others) ₱ 500,000.00

© 2018 Wadhwani Foundation

Practice Venture Worksheet PROFIT LOSS FORECAST

Profit & Loss Account ( Income Statement)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Sales
Cash Sales ₱ 480,000.00 ₱ 640,000.00 ₱ 760,000.00 ₱ 960,000.00 ₱ 1,530,000.00 ₱ 1,710,000.00 ₱ 3,000,000.00 ₱ 4,000,000.00 ₱ 5,500,000.00 ₱ 7,000,000.00 ₱ 8,000,000.00 ₱ 10,000,000.00 ₱ 43,580,000.00
No. of Units Sold 600 800 950 1200 1700 1900 3000 4000 5500 7000 8000 10000 44650
Price Per Unit ₱ 800.00 ₱ 800.00 ₱ 800.00 ₱ 800.00 ₱ 900.00 ₱ 900.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00 ₱ 976.04
Total Sales ₱ 480,000.00 ₱ 640,000.00 ₱ 760,000.00 ₱ 960,000.00 ₱ 1,530,000.00 ₱ 1,710,000.00 ₱ 3,000,000.00 ₱ 4,000,000.00 ₱ 5,500,000.00 ₱ 7,000,000.00 ₱ 8,000,000.00 ₱ 10,000,000.00 ₱ 43,580,000.00

COGS
Cost of Services ₱ 40,000.00 ₱ 47,500.00 ₱ 55,000.00 ₱ 65,000.00 ₱ 70,000.00 ₱ 89,000.00 ₱ 98,000.00 ₱ 110,000.00 ₱ 120,000.00 ₱ 130,000.00 ₱ 150,000.00 ₱ 170,000.00 ₱ 1,144,500.00
Cost Per Unit ₱ 600.00 ₱ 600.00 ₱ 600.00 ₱ 600.00 ₱ 700.00 ₱ 700.00 ₱ 700.00 ₱ 800.00 ₱ 800.00 ₱ 800.00 ₱ 800.00 ₱ 800.00 ₱ 25.63
Gross profit ₱ 440,000.00 ₱ 592,500.00 ₱ 705,000.00 ₱ 895,000.00 ₱ 1,460,000.00 ₱ 1,621,000.00 ₱ 2,902,000.00 ₱ 3,890,000.00 ₱ 5,380,000.00 ₱ 6,870,000.00 ₱ 7,850,000.00 ₱ 9,830,000.00 ₱ 42,435,500.00

Fixed Expenses
Salary ₱ 20,100.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 40,000.00 ₱ 40,000.00 ₱ 50,000.00 ₱ 41,000.00 ₱ 60,000.00 ₱ 70,000.00 ₱ 80,000.00 ₱ 150,000.00 ₱ 641,100.00
Advertising & Promotion ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 240,000.00
Utilities (Electricity), Office supply & ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 180,000.00
Rent ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ - ₱ -
Digital Marketing & Cust Services ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 30,000.00 ₱ 360,000.00
Total Expenses ₱ 85,100.00 ₱ 95,000.00 ₱ 95,000.00 ₱ 95,000.00 ₱ 105,000.00 ₱ 105,000.00 ₱ 115,000.00 ₱ 106,000.00 ₱ 125,000.00 ₱ 135,000.00 ₱ 145,000.00 ₱ 215,000.00 ₱ 1,421,100.00

Result
Net Profit/Loss ₱ 354,900.00 ₱ 497,500.00 ₱ 610,000.00 ₱ 800,000.00 ₱ 1,355,000.00 ₱ 1,516,000.00 ₱ 2,787,000.00 ₱ 3,784,000.00 ₱ 5,255,000.00 ₱ 6,735,000.00 ₱ 7,705,000.00 ₱ 9,615,000.00 ₱ 41,014,400.00
Gross Profit Margin 92% 93% 93% 93% 95% 95% 97% 97% 98% 98% 98% 98% 97%
Net Profit Margin 74% 78% 80% 83% 89% 89% 93% 95% 96% 96% 96% 96% 94%

© 2018 Wadhwani Foundation

Sales Forecast
Jan Feb Mar Apr May
Product category
Monthly increase in
production/subscription 100 50 50 100
1 month Subscription 50 150 200 250 350
Revenue 40,000.00 120,000.00 160,000.00 200,000.00 315,000.00
Price Per Unit 800 800 800 800 900
COGS 30,000.00 90,000.00 120,000.00 150,000.00 245,000.00
Cost Per Unit 600 600 600 600 700
Jun Jul Aug Sep Oct Nov

200 100 500 800 200 500

550 650 1150 1950 2150 2650
495,000.00 650,000.00 1,150,000.00 1,950,000.00 2,150,000.00 2,650,000.00
900 1,000 1,000 1,000 1,000 1,000
385,000.00 520,000.00 9,200,000.00 1,560,000.00 1,720,000.00 2,120,000.00
700 800 8,000 800 800 800
Dec Total

1000
3650 13750
3,650,000.00 13,530,000.00
1,000 984
2,920,000.00 19,060,000.00
800 4,500
Practice Venture Worksheet CASH FLOW FORECAST

Cash flow forecast

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Starting Cash Position 665,000.00 1,029,900.00 1,484,900.00 2,029,900.00 2,744,900.00 3,874,900.00 5,094,900.00 7,409,900.00 2,103,900.00 5,818,900.00 10,963,900.00 16,648,900.00
Cash Inflows
Total Sales 480,000.00 640,000.00 760,000.00 960,000.00 1,530,000.00 1,710,000.00 3,000,000.00 4,000,000.00 5,500,000.00 7,000,000.00 8,000,000.00 10,000,000.00
Cash Outflows
Cost Of Goods Sold 30,000.00 90,000.00 120,000.00 150,000.00 245,000.00 385,000.00 520,000.00 9,200,000.00 1,560,000.00 1,720,000.00 2,120,000.00 2,920,000.00
Operating Expenses 85,100.00 95,000.00 95,000.00 95,000.00 105,000.00 105,000.00 115,000.00 106,000.00 125,000.00 135,000.00 145,000.00 215,000.00
New Fixed Assets Purchased 50,000.00 50,000.00 100,000.00 50,000.00
Loan Payments
Total 115,100.00 185,000.00 215,000.00 245,000.00 400,000.00 490,000.00 685,000.00 9,306,000.00 1,785,000.00 1,855,000.00 2,315,000.00 3,135,000.00
Result
Change during month 364,900.00 455,000.00 545,000.00 715,000.00 1,130,000.00 1,220,000.00 2,315,000.00 - 5,306,000.00 3,715,000.00 5,145,000.00 5,685,000.00 6,865,000.00
Closing cash position 1,029,900.00 1,484,900.00 2,029,900.00 2,744,900.00 3,874,900.00 5,094,900.00 7,409,900.00 2,103,900.00 5,818,900.00 10,963,900.00 16,648,900.00 23,513,900.00

© 2018 Wadhwani Foundation

Practice Venture Worksheet BALANCE SHEET

Balance sheet forecast

The numbers reflected on this Balance Sheet are computed as of: As of Dec 31st

Assets ₱ 24,098,900.00
Current assets ₱ 23,513,900.00
Cash in hand ₱ 23,513,900.00
Petty cash ( cash lying in office )
Accounts Receivable ( Debtors )
Stock on hand (Inventory)
Other Assets
Fixed assets ₱ 250,000.00
Equipment for Quality Control ₱ 250,000.00
Furniture
Capital Investment ( Startup Capital ) ₱ 335,000.00

Liabilities ₱ 42,014,400.00
Current liabilities ₱ -
Accounts payable ( Creditors )
Interest payable
Any Other Amounts Owed
Long-term liabilities ₱ 500,000.00
Loans from Bank ₱ 500,000.00
Loans from Friends and Family

Networth of the Promoters ₱ 41,514,400.00

Reserves & Surplus ( Retained Earnings) ₱ 41,014,400.00
Equity Share Capital ₱ 500,000.00

© 2018 Wadhwani Foundation

Practice Venture Worksheet

Salaries

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Employee Salaries
Founder 1 ₱ 100 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 20,000
Founder 2 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 20,000
Founder 3 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 20,000
Employee 1 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 1,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 25,000
Employee 2 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 20,000
Employee 3 ₱ 10,000 ₱ 10,000 ₱ 10,000 ₱ 15,000
Employee 4 ₱ 10,000 ₱ 10,000 ₱ 15,000
Employee 5 ₱ 10,000 ₱ 15,000
Total Salaries ₱ 20,100 ₱ 30,000 ₱ 30,000 ₱ 30,000 ₱ 40,000 ₱ 40,000 ₱ 50,000 ₱ 41,000 ₱ 60,000 ₱ 70,000 ₱ 80,000 ₱ 150,000

© 2018 Wadhwani Foundation

 Year 1 Year 2 Year 3 Year 4
Number of sales 44650 53586 64303 77168
Value of each sale (Contribution) ₹ 950 ₹ 950 ₹ 1,142 ₹ 1,142
Average Price per unit ₹ 976 ₹ 976 ₹ 1,171 ₹ 1,171
Average Cost per unit ₹ 26 ₹ 26 ₹ 29 ₹ 29
Total revenue ₱ 43,580,000 ₱ 52,301,856 ₱ 75,314,673 ₱ 90,382,293
Gross Profit ₱ 42,435,500 ₱ 50,928,302 ₱ 73,430,871 ₱ 88,121,613

Capital costs
Land and building N.A. N.A. N.A. N.A.
Equipment ₱ 250,000 ₱ 1,000,000 ₱ 1,800,000
Product development costs ₱ 95,000 ₱ 500,000 ₱ 700,000
Others ₱ 335,000
Total ₱ 680,000 ₱ 1,500,000 ₱ 700,000 ₱ 1,800,000

Expenses (Annual)
Salaries ₱ 641,100 ₱ 705,210 ₱ 775,731 ₱ 853,304
Marketing and Promotion ₱ 240,000 ₱ 264,000 ₱ 290,400 ₱ 319,440
Digital Marketing & Customer Services ₱ 180,000 ₱ 198,000 ₱ 217,800 ₱ 239,580
Utilities (electricity etc.) ₱ - ₱ - ₱ - ₱ -
Office Supplies ₱ 360,000 ₱ 396,000 ₱ 435,600 ₱ 479,160
Rent ₱ - ₱ - ₱ - ₱ -
Total ₱ 1,421,100 ₱ 1,563,210 ₱ 1,719,531 ₱ 1,891,484

Earnings (EBITDA) ₱ 41,014,400 ₱ 49,365,092 ₱ 71,711,340 ₱ 86,230,129

Year 5
92561
₹ 5,000
₹ 1,269
₹ 29
₱ 117,442,613
₱ 462,807,040

N.A.

₱ 1,000,000

₱ 1,000,000

₱ 938,635
₱ 351,384
₱ 263,538
₱ -
₱ 527,076
₱ -
₱ 2,080,633

₱ 460,726,407
Activity
Update the Financial Planning and Forecasting Template
Accounts payable (AP) is an accounting entry that represents a company's obligation to pay off a short-term debt to its creditors or suppliers. For
Accounts Payable
example, when you purchase raw materials from your suppliers but pay after a month on receiving the invoice.

When customers buy your products or services on credit and pay after a certain amount of time, after receiving the invoice, it is called accounts
receivable. For example, think of your Internet or mobile bills. You use the services, mostly for a month, and then pay the money after you receive the
invoice.
Accounts
Receivable
Accounts receivable refers to the outstanding invoices a company has or the money clients owe the company. The phrase refers to accounts a business
has a right to receive because it has delivered a product or service. Accounts receivable or receivables represent a line of credit extended by a company
and normally have terms that require payments due within a relatively short time period, ranging from a few days to a fiscal or calendar year.

A company's balance sheet statement consists of its assets, liabilities, and shareholders' equity. Assets are what your venture owns, including cash,
equipment, and money receivable from customers (accounts receivables). For a cash-based business (a coffee shop, food delivery service), there won’t
be receivables because you collect money before or as soon as the product or service is delivered.

But for businesses that involve invoicing a customer (for example, you build websites and the customer will pay after you deliver the website and they are
happy with it). When you have sent out invoices and you are waiting for customers to pay you, then they are called receivables.
Assets
Assets are divided into current assets (those which can be converted to cash in one year or less) and long-term assets, which will take you longer than
one year to convert into cash.

A fixed asset is bought by a business for production or supply of goods or services. Examples of fixed assets can be equipment or a delivery truck that a
business has bought for itself. The term "fixed" means that these assets will not be used up or sold within the accounting year. A fixed asset typically has
a physical form and is reported on the balance sheet as property, plant, and equipment (PP&E).

A balance sheet reports your venture’s assets, liabilities, and shareholders' equity at a specific point in time. It is a financial statement that provides a
snapshot of what your venture owns and owes as well as the amount invested by your shareholders.
Balance Sheet
It is a snapshot, representing the state of your venture's finances at a moment in time. The balance sheet is based on the fundamental equation: Assets
= Liabilities + Equity

When entrepreneurs start their businesses, even before they start selling any of their products or services, they will have certain expenses. These are
fixed costs (like rent, electricity, salaries, etc.). Their first focus will be to at least sell enough to cover such expenses. Then, thay can focus on how to sell
more to make profits.

A break-even analysis is a useful tool to find out at what point your venture, or a new product or service you are thinking of introducing, will be profitable.
Break-Even It’s a financial calculation used to calculate the number of units you need to sell to at least cover your costs. When you break even, you are neither losing
Analysis money nor making money but all your costs have been covered.

You can use the break-even analysis to also assess the viability of a new business idea. Performing such a break-even calculation can give your team a
general sense of whether the idea is worth pursuing. If your analysis suggests that you would have to sell 8,000 t-shirts before you can make a profit and
it will require an investment of $10,000 to get going, you can make a more informed decision regarding whether that is possible (can you sell that many t-
shirts or can you raise $10,000 from investors etc.). It helps evaluate different business ideas and pick the one that you are comfortable with.

During the day-to-day operations of your venture, cash comes in (when customers pay you) and goes out (when you pay others such as vendors or
suppliers). Cash flow is the amount of cash that your venture receives or pays out by the way of payment(s) to creditors. Successful entrepreneurs
always keep an eye on their cash flows. Looking at how much money is coming in or going out, also called the cash flow analysis, is a good tool to
analyze the liquidity position of your venture. It gives a snapshot of the amount of cash coming into the business, from where, and the amount flowing
Cash Flow out.

Cash Flow Statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. It measures
how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating
expenses and the growth of the company.

© 2018 Wadhwani Foundation

 Financi

Turnover Ratios

Sales Turnover Avg Sales/Net Sales

Avg Inventory/Net
Inventory Turnover
Sales

Avg Receivable/Net
Receivable Turnover
Sales

Profitability Ratios
Gross Margin Gross Profit/Net Sales

Net Margin Net Income / Net Sales

Net Income/Total
ROI
Assets

Liquidity Ratios
Current Assets/
Current Ratio
Current Liabilities

(Current Assets -
Quick Ratio Inventory)/Current
Liabilities

Solvency Ratio
Total Liabilities/Net
Debt : Equity Ratio
worth

Coverage Ratio

EBIT + / Interest
Debt Service Coverage Ratio
Outstanding
Financial Ratios

Financial ratios are measurements that help entrepreneurs understand the relationship between t
elements of their financial plan.

Sales Turnover - This is an indicator of the total revenue generated by your company in one yea
compare the Sales Turnover Ratio of one year with the other years of your business to identify an
the revenues generated.

Inventory Turnover - This is an indicator of the number of times your company's inventory is repl
year. A high inventory turnover ratio is an indicator that a company is producing and selling its pro
services quickly.

Receivable Turnover - This is a measurement of how efficiently your company uses its assets. It
well your company is collecting its debts and extending credits.

Gross Margin - This is the difference between revenue and cost of goods sold divided by revenu
is expressed in percentage.

Net Margin - Net margin is the percentage of revenue remaining after all operating expenses, inte
have been deducted from a company's total revenue.

Return on Investment (ROI) - This is a profitability ratio. The most commonly used method of de
divide net profit by total assets. ROI indicates the money you invest in the company and the return
that money based on the net profit of the business.

Current Ratio - This is a liquidity ratio measuring whether or not your company has enough resou
short-term obligations.

Quick Ratio - This is another liquidity ratio that indicates your company’s financial position to inst
liquid assets) to get rid of its current liabilities

Debt-to-Equity Ratio - This indicates the proportion of the company's assets that are being finan
debt. This ratio is indicative of the long-term solvency of your company.

Debt Service Coverage Ratio - It is the ratio of cash available for debt servicing to interest, princ
payments. It is a popular benchmark used in the measurement of an entity's ability to produce eno
cover its debt payments.
nd the relationship between the different

by your company in one year. You can

of your business to identify any changes in

ur company's inventory is replaced in the

s producing and selling its products or

ur company uses its assets. It indicates how

goods sold divided by revenue. Gross margin

er all operating expenses, interest, and taxes

commonly used method of deriving ROI is to

in the company and the return you realize on

ur company has enough resources to meet its

any’s financial position to instantly use its

y's assets that are being financed through

ny.

ebt servicing to interest, principal and lease

entity's ability to produce enough cash to
Feedback Entrepreneur
# Liked the app 87
# Found the app laggy 25
# Content useful and engaging 74
# Easy to connect 98
# People who initiated chats 64
# Easy to conduct online meetings 76
NPS 40

Entrepreneur
NPS 40

# Easy to conduct online meetings 76

# People who initiated chats 64

# Easy to connect 98

# Content useful and engaging 74

# Found the app laggy 25

# Liked the app 87

0 20 40 60 80 100 120
 Feedback Mentor
# Liked the app 43
# Found the app laggy 16
# Content useful and engaging 29
# Easy to connect 46
# People who initiated chats 12
# Easy to conduct online meetings 38
NPS 45

Mentor
NPS 45

# Easy to conduct online meetings 38

# People who initiated chats 12

# Easy to connect 46

# Content useful and engaging 29

# Found the app laggy 16

# Liked the app 43

00 120 0 5 10 15 20 25 30 35 40 45 50
 45

38

46

43

35 40 45 50