City of Melbourne Financial Projections Template

Summary Projected Profit & Loss, Cashflow and Balance Sheets

Projected Profit & Loss Statements

Year 1 Year 2

Total Sales
Gross Profit

Fixed Expenses
Net Profit Before Tax
Net Profit After Tax

Projected Cashflow Statements

Year 1 Year 2

Total Cash Receipts

Total Cash Payments
Net Cashflow
Bank Balance (s)
Bank Balance (e)

Projected Balance Sheets (at end of year)

Year 1 Year 2
Total Current Assets
Total Operating Assets
Total Assets

Total Current Liabilities

Total Non Current Liabilities
Total Liabilities

Net Assets

Paid Up Capital
Retained Earnings

Return On Investment*
Average ROI

* Formula for ROI = Net Profit Before Tax divided by total investment.
City of Melbourne Financial Projections Template 1. The Profit & Loss Statement Measures the performance of your business. It
estimates your revenue (from the sale of your goods and or services), and
Projected Profit & Loss Statement (1) deducts expenses (those costs you incur in running your business that you use
up in the year that you have projected).
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2. Cost of Goods Sold is used by businesses that sell products. It includes
such things as raw materials, wages of staff that make the product, and cost of
Revenue stock purchased for sale etc.
Product / Service
Total Revenue
3. Direct Costs is used by businesses that
4. Gross Profit Percentage is calculated by dividing the gross profit
provide services and includes such things as the
into sales. The outcome provides a benchmark that can be checked
Less: Cost of Goods Sold (2) wages and salaries of the staff that directly
against other similar businesses in your industry. If your result is way
(COGS)/ Direct Costs (3) provide the service.
above or below your industry benchmark you will need to reconsider
Total COGS / Direct Costs your assumptions or justify your result -
Gross Profit
Gross Profit Percentage (4)

Selling Expenses
Advertising
Communications
Marketing
5. Depreciation represents an attempt to write-off the use of an asset over its estimated useful life. For example, a motor vehicle
Motor Vehicle Expenses
may be expected to last 5 years so would be depreciated over this time period (20% per annum). The depreciation is included in
Depreciation (5) the projected profit & loss statement as an expense and also in the balance sheet deducted against the asset. It is a non cash
Salaries expense so does not get included in your projected cashflow statement.
On Costs (15%) (6)
Sales Commissions
- - - - - - - - - - - - -
-
6. Oncosts relate to additional costs involved in employing
Administration and other Fixed Expenses (7) staff. They include items such as superannuation, work
Accounting Fees cover insurance, and payroll tax. 15% is an acceptable
Amortisation of Exclusive Licence benchmark.
Legal Fees
Stationery & Postage
Communications
7. Fixed Expenses are those expenses that don't directly
Salaries relate to the sale of the product or service but are incurred
On Costs (15%) in running the business. They can be categorised as
shown in the template. We have provided various
examples that may or may not be relevent for your
Operational Expenses business.
Utilities (electricity,gas,water)
Rent
Rates
Repairs & Maintenance

Finance Expenses
Bank Charges 8. Net Profit Before and After Tax Percentages
Interest - Loan are calculated by dividing the gross / net profit
Interest - Bank Overdraft into sales. The outcome provides a benchmark
that can be checked against other similar
Insurance
businesses in your industry. If your result is way
above or below your industry benchmark you
will need to reconsider your assumptions or
Total Operating Expenses justify your result.

Net Profit Before Tax

Net Profit Before Tax Percentage (8)
Tax @ 30% (company tax rate)

Net Profit After Tax

Net Profit After Tax Percentage (8)

This spreadsheet has been prepared for the City of Melbourne illustration for educational purposes only. The author makes no representations as to its accuracy, correctness or completeness
City of Melbourne Financial Projections Template

Projected Cashflow Statement Year One

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Cash Receipts
Sales Receipts
Investment 1. This cashflow statement measures projected cash inflows and outflows of your business and results in a projected bank balance for
your business on a monthly basis. It measures when cash is actually received from sales made as well as other cash inflows such as
Net GST from Tax Dept
investments, or loans received. Cash outflows relate to actual cash payments made for expenses or such things as the purchase of
Loan Funds fixed assets, stock purchases, payments of loans and taxes etc.
Total Cash Receipts
(This month-by-month spreadsheet is to record the actual month in which the Income is expected, and the expenses paid, and not
Less: taking the forecasted annual figures, and divide by twelve. Some examples of this would be:
Cash Payments - Annual Rates - these are paid either as one payment in the month of February, or in quarterly instalments.
Selling Expenses - Insurance (various forms) - this is normally paid as an annual amount, not divided by 12 and recorded as an identical amount each
month.
Administration and other Fixed Expenses (7)
- Car Registration - this too is payable in only one month each year, and the annual amount involved should not be divided by twelve
Operational Expenses and shown in 12 equal amounts
Finance Expenses - Office General Expenses - this should not be some Annual forecast, and merely divided by 12 as seldom would amounts spent every
Stock Purchases month.
Net GST paid to Tax Dept. - PAYG & BAS - for small businesses this is payable Quarterly, and should not be shown as monthly figures.
Fixed Asset Purchases - Advertising - this is seldom spread evenly over the 12 separate months.
Tax Paid - Gas & Electricity- these are usually two-monthly or quarterly payments, again not the anticipated annual amount divided by 12.

Total Cash Payments

Net Cash Flow

Bank Balance (s)
Bank Balance (e)

This spreadsheet has been prepared for the City of Melbourne as an illustration for educational purposes only. The author makes no representations as to its accuracy, correctness or completeness.
City of Melbourne Financial Projections Template

Projected Balance Sheet Year One (1)

Current Assets(2)
Cash At Bank
Stock (at cost)
Debtors
Total Current Assets
Non Current Assets (3)
Intangible Assets
Less: Accumulated Amortisation
Written Down Value
Fixed Assets
less: Accummulated Depreciation
Written Down Value
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2. Current Assets are those
assets that the business
expects to be turned into
cash within the next 12
months
3. Fixed Assets are those
assets that the business does
not expect to turn into cash
within the next 12 months.
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1. The balance sheet represents the statement of financial position of a
business. It adds up all the assets of a business (those things purchased by a
business that will last longer than 12 months that directly or indirectly assist in
the creation of revenue). It then subtracts all liabilities of a business (those
amounts of money the business owes) to arrive at the term "Net Assets." Net
assets is a measure of the value of a business as it establishes what is left
over after all assets are sold and all liabilities are paid. The value of net assets
should equal to the value of the equity section of the balance sheet (hence the
term balance sheet). The equity section of the balance sheet adds the
investments made into the business (paid up capital) to the monthly retained
earnings (profit) taken from the profit and loss statement.

Total Fixed Assets 4. Current Liabilities are

those liabilities that the
Total Assets business expects to pay
within the next 12 months.

Current Liabilities (4)

Bank Overdraft
Trade Creditors
5. Non Current Liabilities are
Tax
those liabilities that the
Total Current Liabilities business does not expect to
pay within the next 12 months.

Non Current Liabilities (5)

Loan
Total Non Current Liabilities

Total Liabilities

Net Assets (Total Assets minus Total Liabilities)

Equity
Paid Up Capital
Retained Earnings (s)
Monthly Retained Earnings

This spreadsheet has been prepared for the City of Melbourne as an illustration for educational purposes only. The author makes no representations as to its accuracy, correctness or completeness.
Assumptions
1. Provide details of the major assumptions adopted for your financial projections. The research and
effort you put into your assumptions, particularly your sales assumptions has a big impact on the
quality and realism of your financial projections. We have provided examples of the more significant
assumptions you will need to make. Every business is different. Yours may include all of these. It
will also include many others. Ask yourself what are the most important drivers of your business? If
it is important it needs to be documented here.

EXAMPLES
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Product Sales
Sales Volumes
Price Per Unit
Total Sales Per Month
* Consider Seasonal / timing influences on your sales - they are rarely the same every month.

Service and Consultancy Fees

No. of hours / days / Volumes
Charge per hour / day / session

Debtor Days
- How long does it take for your customers to pay you?

Creditor Days
- How long does it take you to pay your creditors ie. What are your credit terms?

Salaries and Wages

Full-time staff - Number / annual rates
Part-time and casual staff - Number / hours of work / hourly rates
Oncosts (superannuation, long service leave, workcover)

Capital Expenditure
List proposed items and cost
Finance/ Funding
Capital injection
Bank Overdraft (amount, interest rate and repayment terms)
Credit Facility (amount, interest rate and repayment terms)
Loan (amount, interest rate and repayment terms)
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