Budge&ng

 &  Forecas&ng  
Predic'ng  the  outcome  
Author:  Eva  Hukshorn,  partner  EFactor  

1  
  
 
 
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It’s  not  about  connec&ons  -­‐  it’s  about  the  right  ones…  
2  
The  purpose  of  Financial  Planning  

1.  To-­‐do  list  

2.  Task  overview  
3.  Empowerment  
4.  Evalua&on  
5.  Control  
6.  Communica&on  

Financial  Planning  is  a  tool  forcing  you  to  think  about  every  liVle  detail  
on  a  period-­‐by-­‐period  basis  and  relate  financial  consequences  to  it   3  
Some  terminology  

1.  Milestone  Overview  

2.  Financial  Planning  
3.  Targets  
4.  Budget  
5.  Master  Budget  
6.  Forecasts  

4  
 A  summary  of  your  vision  and  strategy:  Your  Milestone  Overview  
2012   2013   2014   2015   2016  

M
M
V

Business Product Beta test

Going to Get Product Going to Promotion
Plan
develop market US
work
development market
campaign

ment Product space
Prod. B

Prod. A
develop Alpha Break- Expand in EU +
ment
Customers
Promotion Beta test
even
India

campaign

Employees
3
5
8
10
12
15
20
25



Revenue / margin 200k / 10%

1mio / 17.3%
4mio / 21% 12mio / 28%

Capital need: USD 150k

2nd round: USD 1mio
3rd round: USD 3mio

5  
 Balance  Sheet  –  simplified  

Balance  Sheet  –  31  Dec.  YEAR  1  

ASSETS  
•      EQUITY  &  LIABILITIES  
 
Fixed   Assets   200   Equity     300  
 
Retained  earnings   200  
 
Account  Receivable   500   Total  equity   500  
Inventory   300  
Total  current  assets   800   Debt  5%  interest   250  
Personal  loan   200  
Cash   50   Account  Payable   100  
Total  liabili&es   550  
Total   1,050   Total   1,050  

6  
Profit  &  Loss  statement  or  Income  statement  –  simplified  

Profit  &  Loss  statement  –  YEAR  1  

Revenue    1,000  
Cost  of  Goods  Sold  (“COGS”)   minus  400  
Gross  Profit   600  
Gross  margin                      60%  
Selling,  Administra've,  General  Costs  (“SG&A”)   minus  350  
Opera&ng  result  /  Earnings  before  Interest  and  Tax  (“EBIT”)   250  
EBIT  margin        25%  
Interest  (5%  on  250)   minus  12,5  
Tax   minus  37.5  
Net  profit  /  retained  earnings   200  

7  
 Cash  Flow  statement  –  simplified  

Cash  Flow  statement  –  YEAR  1  

Cash  sales  received  from  customers            500  
Cash  paid  to  suppliers  and  employees   minus  300  
Interest  &  tax  payments   minus      50  
Cash  flow  generated  from  opera&ng  ac&vi&es   150  
Addi'ons  to  equipment   minus  50  
Cash  flow  generated  from  inves&ng  ac&vi&es   -­‐50  
Payment  debt   minus  75  
Cash  flow  generated  from  financing  ac&vi&es   -­‐75  
Net  increase  in  cash   25  
Beginning  balance  cash  1  Jan.              25  
Year-­‐end  cash   50  

8  
SIMPLE  EXAMPLE  OF  FINANCIAL  STATEMENT  CALCULATIONS  
 
 

9  
 Case  assignment  1:  Balance  Sheet  

You  are  star&ng  a  hotdog  stand  as  of  January  Year  1  

 
First  thing  to  do  is:  
–  Incorporate  a  legal  en'ty,  put  USD  18,000  in  as  equity  and  arrange  USD  6,000  with  a  bank  
Assignment:  what  does  the  Balance  Sheet  look  like  on  1  December  Year  0?  
 
Second  thing  to  do  is:  
–  Purchase  inventory  (sausage,  sandwiches,  mustard)  for  1,650  hot  dogs  during  December  Year  
0    
–  Cost  price  USD  0.50  per  hotdog  
–  Take  into  account  that  although  you  have  to  pay  cash  for  your  purchase,  you  will  only  receive  
your  order  in  one  month  'me  
Assignment:  what  does  the  Balance  Sheet  on  1  January  Year  1  look  like  immediately  
aner  you  made  your  order  and  paid?  

10  
Create  star&ng  Balance  Sheet  aner  seong  up  legal  en&ty  

Starting Balance Sheet December Year 0

Assets USD Liabilities & Equity USD

Stand 0 Equity 18,000

Retained Earnings 0

Inventory 0

Account payable 0 Debt 6,000

Cash 24,000 Account payable 0

Total 24,000 Total 24,000

11  
Create  star&ng  Balance  Sheet  aner  making  first  steps  to  start  opera&ons  

Balance Sheet – 1st January Year 1

Assets USD Liabilities & Equity USD

Stand 20,000 Equity 18,000

Retained Earnings 0

Inventory 0

Account payable 825 Debt 6,000

Cash 3,175 Account payable 0

Total 24,000 Total 24,000

12  
Case  assignment  2:  Profit  &  Loss  statement  

Assume  the  following  for  the  first  year  of  opera&ons:  

Number of hotdogs sold 33,000

Consumer price USD 1,50

Purchased sandwiches, sausages & mustard equivalent of 34,980 hotdogs

Cost of Goods Sold (“COGS”): ingredients per hotdog USD 0.50

Selling, General & Administrative Costs (“SG&A”) and other costs USD 17,100

Depreciation USD 2,000

Interest rate over debt USD 6,000 6%

Tax rate 25.5%

Assignment:  prepare  the  profit  and  loss  statement  of  your  first  year  in  business  

13  
 Case  assignment  2:  Profit  &  Loss  statement  

Revenue

minus Cost of Goods Sold (“COGS”)

Gross Profit

minus Selling, General, Administrative Costs (“SG&A”)

Operating result / Earning Before Interest & Tax (“EBIT”)

minus Interest

Profit Before Tax (“PBT”)

minus Tax

Net Profit

Note:  depreciaCon  is  included  in  the  SG&A  in  this  example   14  
Case  assignment  2:  Profit  &  Loss  statement  
Profit &Loss statement

USD

Revenue 33,000 x 1.50 49,500

COGS 33,000 x 0.50 -16,500

Gross profit 33,000

SG&A -19,100

Earnings Before Interest & Tax (“EBIT”) 13,900

Interest 6% of 6,000 -360

Profit Before Tax 13,540

Tax 25,5% of 13,540 -3,453

Net Profit 10,087

Note: We assume we pay out 70% of our profit as a dividend, which equals to USD 7,061, i.e. the remainder (USD 3,026) will be transferred to
Retained Earnings
15  
Case  assignment  3:  Cash  Flow  statement  
In  addi&on  to  preparing  an  income  statement,  a  company  must  prepare  a  Cash  Flow  
statement  
–  The  Cash  Flow  statement  is  like  your  bank  statement.  It  shows  how  cash  came  in  and  went  
out  
–  A  Cash  Flow  statement  simply  describes  the  flows  of  cash-­‐in    and  -­‐out  to  different  accounts  
over  the  course  of  one  year  

To  understand  cash  flow,  we  will  start  to  assess  the  cash  account  on  the  Balance  
Sheet.  Almost  every  account  on  the  Balance  Sheet  is  linked  to  cash  

Assignment:  in  order  to  prepare  the  cash  account,  we  need  to  make  some  closing  
statements,  prepare  these  

16  
Case  assignment  3:  Cash  Flow  statement  –  closing  statements  
First  we  need  to  calculate  our  ending  inventory:  

Ending inventory calculation

# hotdogs purchased 34,980

# hotdogs sold 33,000

Hotdogs in inventory 1,980

Purchase price of 1 hotdog USD 0.50 x

Total cost price of inventory USD 990

 
The  ending  inventory  stands  at  USD  990  per  31  Dec  Year  1  

17  
 Case  assignment  3:  Cash  Flow  statement  –  closing  statements  

Sales growth in Year 2 5%

Inventory 1st month Year 1 bought in December Year 0 #1,650

5% increase #83 +

Inventory 1st month Year 2 #1,733

Purchase price of1 hotdog USD 0.50 x

To receive – account payable USD 866

•  As  you  know,  we  need  to  pay  our  inventory  one  month  in  advance,  i.e.  in  December  
we  already  need  to  pay  for  our  stock  in  January  
•  Given  the  current  favorable  market  circumstances,  we  assume  a  5%  increase  in  sales  
growth  for  Year  2  
•  As  a  consequence,  we  assume  a  similar  development  in  our  inventory  on  the  right  
18  
 Case  assignment  3:  Cash  Flow  statement  –  closing  statements  

Sales growth in Year 2 5%

Inventory 1st month Year 1 bought in December Year 0 #1,650

5% increase #83 +

Inventory 1st month Year 2 #1,733

Purchase price of1 hotdog USD 0.50 x

To receive – account payable USD 866

•  As  you  know,  we  need  to  pay  our  inventory  one  month  in  advance,  i.e.  in  December  
we  already  need  to  pay  for  our  stock  in  January  
•  Given  the  current  favorable  market  circumstances,  we  assume  a  5%  increase  in  sales  
growth  for  Year  2  
•  As  a  consequence,  we  assume  a  similar  development  in  our  inventory  on  the  right  
19  
 Case  assignment  3:  Cash  Flow  statement  –  cash  count  
Below  we  have  portrayed  an  overview  of  all  cash  expenses  since  incorpora&on:  
Beginning cash 24,000
Revenue 49,500
Stand -20,000
Cost of Goods Sold (“COGS”) -16,500
Selling, General, Administrative Costs (“SG&A”) -17,100
Interest -360
Tax -3,453
Dividend -7,061
Maintenance -2,000
Pay down of debt -1,000
Inventory -990
Account payable -866
Ending cash 4,170 20  
Case  assignment  3:  Cash  Flow  statement  
The  crux  of  the  Cash  Flow  statement  is  to  separate  cash  flows  from  opera&ng  ac&vi&es  
from  the  other  cash  flows    
 
Moreover,  we  need  to  filter  out  non-­‐cash  items  such  as  deprecia&on  
 
The  Cash  Flow  statement  dis&nguishes  between  three  types  of  cash  flows:  
–  Cash  flow  from  opera'ons  
–  Cash  flow  from  inves'ng  ac'vi'es  
–  Cash  flow  from  financing  ac'vi'es  

As  you  can  see  in  this  assignment,  the  financial  statement  are  interconnected.  This  is  high-­‐lighted  
by  the  pink  cell  
 

21  
Case  assignment  3:  Cash  Flow  statement  
The  Cash  Flow  statement  can  have  the  following  structure:  
 
Earnings Before Interest & Tax (“EBIT”)
+ Depreciation
Operating cash flow before changes in working capital
+ Changes in working capital
= Cash flows from operating activities (A)

+ Cash flows from investing activities (B)

+ Cash flows from financing activities (C)

= Net increase in cash (A + B + C)

+ Cash at 1 January Year 1
= Year-end cash
22  
 Earning Before Interest & Tax (“EBIT”) 13,900
+ Depreciation 2,000
= Operating cash flow before changes in WC 15,900
Change in inventory -990
Change in account receivables -41
Change in account payables 0
Income tax expense -3,453
Cash from operating activities 11,416

Acquisition of PPE -2,000

Cash from investing activities -2,000

Pay down of debt -1,000

Interest expense -360
Dividend paid (notes) -7,061
Cash from financing activities -8,421

= Net increase in cash (A + B + C) 995

+ Cash at 1 January Year 1 3,175
= Year-end cash 4,170
23  
 Case  assignment  4:  Closing  Balance  Sheet  

Now  that  we  have  prepared  the  cash  statement  we  can  also  finalize  the  closing  
Balance  Sheet.  Prepare  the  closing  Balance  Sheet  for  Year  1  

Balance Sheet – 31st December Year 1

Assets USD Liabilities & Equity USD

Stand 20,000 Equity 18,000

Retained earnings 3,026

Inventory 990

Account payable 866 Debt 5,000

Cash 4,170 Account payable 0

Total 26,026 Total 26,026

24  
END  EXAMPLE  OF  FINANCIAL  STATEMENT  CALCULATIONS  
 
 

25  
 Example  of  a  non-­‐realis'c  forecast  

REALISTIC  AT  FIRST  SIDE?   YES!  

Housing   Posi've   Low  cost  
Days  per  year   365  
BASIC  ASSUMPTIONS   Meals  per  day   c.  50  
Amsterdam  popula'on   800,000   Meals  per  person   yearly   4x  
Target  group:  10%  
80,000  
YUPPIES  
Sales  of  meals  year  1   20,000   REALISTIC  AFTER  ANALYSIS?   NO!  
Housing  -­‐  Suburban  area   Low  cost   Housing   Nega've   No  target  
Days  per  year   47wks/5d   235  
Meals  per  day   Implied    c.  85  
Brand  exposure   11%   85,000  

26  
Revenue  Forecas'ng  –  star'ng  point  of  everything  

1.  Split  your  revenue  in  units  

2.  Use  historical  data  
3.  Describe  driving  factors  
4.  Look  for  paVerns  
5.  Include  new  products  
6.  do  not  forget  prices  
7.  Upside  &  downside  scenario’s  
8.  Compare  with  industry  standards  

Your  Revenue  Forecast  is  a  star&ng  point.  Each  cost  item  can  be  derived  
from  revenue  or  build-­‐up  like  the  way  revenue  is  build-­‐up     27  
Overview  of  forecas'ng  parameters  

Financial statement item Standard model Consider

Revenue % growth GDP, market growth, inflation, volume

vs. price, price pressure, product mix,
acquisitions/disposals, regions

Cost of Goods Sold Directly related units sold price pressure, efficiency, product
mix, raw material costs, inflation

Gross margin % of revenues price pressure, efficiency, product

mix, raw material costs, inflation

Selling, General & % of revenues price pressure, efficiency, product mix

Administrative costs

Operating costs growth % growth sales growth, variable vs. fixed costs,
inflation, wage costs, efficiency

Depreciation % of opening tangible fixed accounting policy change, large

assets investments (current & historic)
28  
 Overview  of  forecas'ng  parameters  –  cont’d  

Financial statement item Standard model Consider

Amortisation % of opening intangible fixed goodwill: linear write-off and no

assets additions

Inventory (days) days of increased revenues efficiency of working capital,

seasonality

Account receivable (days) days of increased revenues efficiency of working capital, country
mix, seasonality, annual average

Other receivables % of increased revenues timing, annual average, constituents

(Operating) cash % of increased revenues idem inventory days, industry average

Account payable (days) days of total increased . costs idem account receivable

Other payables % of increased revenues idem other receivables

Note:  inventory  days,  account  receivable  days  and  account  payable  days  will  be  explained  in  more  detail  in  the  next  webinar,  Aug.  14   29  
Overview  of  forecas'ng  parameters  –  cont’d  

Financial statement item Standard model Consider

Capital expenditure % of increased or total revenues large investments, maintenance

(expansion and sustaining) versus expenditure

Dividend (pay-out ratio) % of net earnings before extra- % of earnings or stable Dividend per
ordinaries Share (“DPS”) growth

Preferred interim dividends % of preferred share capital

outstanding

Preferred interim dividend % of preferred dividends

Interest on debt interest rate maturity of debt, default spread

Interest on cash interest rate current market rate

30  
EXAMPLE  OF  FORECASTING  
 
 

31  
Case  assignment  5:  Forecas&ng  Profit  &  Loss  statement  
As  you  have  just  no&ced,  forecas&ng  is  an  exercise  that  requires  us  to  make  certain  
assump&ons  on  the  development  of  our  company:  
–  We  assume  revenue  growth  with  5%  in  the  first  two  years  and  thereamer  with  3%  
–  Moreover,  we  assume  that  COGS  and  SG&A  as  a  percentage  of  revenues  remain  constant  
(i.e.  Year  1  levels)  
 
Assignment:  Prepare  the  P&L  for  Year  2  to  Year  5  

32  
 P&L 2007 2008F 2009F 2010F 2011F
Year 1 Year 2 Year 3 Year 4 Year 5
Forecas&ng  P&L  
Profit & Loss Statement
Revenues 49,500 51,975 54,574 56,211 57,897
Growth 5.0% 5.0% 3.0% 3.0%

•  Revenues  growth  by  more  than   COGS

As a % of revenues
-16,500
33.3%
-17,325
33.3%
-18,191
33.3%
-18,737
33.3%
-19,299
33.3%
USD  8,000  to  almost  USD  58,000   Gross Profit 33,000 34,650 36,383 37,474 38,598

in  Year  5  (=2011)   Gross margin 66.7% 66.7% 66.7% 66.7% 66.7%

•  What  can  you  say  about  the  

SG&A -17,100 -17,955 -18,853 -19,418 -20,001
As a % of revenues 34.5% 34.5% 34.5% 34.5% 34.5%

profitability  of  the  company  going   EBITDA 15,900 16,695 17,530 18,056 18,597
EBITDA margin 32.1% 32.1% 32.1% 32.1% 32.1%
forward?   Depreciation -2,000 -2,000 -2,000 -2,000 -2,000
As a % of revenues 4.0% 3.8% 3.7% 3.6% 3.5%

EBIT 13,900 14,695 15,530 16,056 16,597

EBIT margin 28.1% 28.3% 28.5% 28.6% 28.7%

Interest (@ 6%) -360 -300 -240 -180 -120

PBT 13,540 14,395 15,290 15,876 16,477

27.4% 27.7% 28.0% 28.2% 28.5%

Tax -3,453 -3,671 -3,899 -4,048 -4,202

Tax rate 25.5% 25.5% 25.5% 25.5% 25.5%

Net Profit 10,087 10,724 11,391 11,827 12,276

Profit margin 20.4% 20.6% 20.9% 21.0% 21.2%

Dividend (i.e. bonus for employee) -7,061 -7,507 -7,974 -8,279 -8,593
Dividend ratio 70.0% 70.0% 70.0% 70.0% 70.0%

Retained earnings 3,026 3,217 3,417 3,548 3,683

Case  assignment  6:  Forecas&ng  Balance  Sheet  
In  our  case,  forecas&ng  of  the  Balance  Sheet  requires  liVle  assump&ons  
–  We  assume  that  Inventory  and  Receivables  both  remain  at  a  constant  percentage  of  
revenues  

All  other  BS  items  are  a  consequence  of  other  decisions  we  have  made  at  an  earlier  
stage  in  our  case:  
–  Deprecia'on  equals  the  maintenance  investment  in  our  stand,  i.e.  fixed  assets  remain  
constant  
–  Equity  is  adapted  automa'cally:  the  retained  earnings  from  the  Profit  &  Loss  statement  flow  
into  Equity  
–  Debt  is  paid  down  yearly  in  six  years  and  subsequently  decreases  with  USD  1,000  per  year  

Cash  =  last  year’s  cash  +  the  net  increase  in  cash  (from  CF)  
34  
Balance Sheet
Balance Sheet
Balance sheet 2007
Year 1 2008F
Year 2 2009F
Year 3 2010F
Year 4 2011F
Year 5

Assets
Kraam
Stand   20,000 20,000 20,000 20,000 20,000
As a  %
As  % of  of revenues
revenues   40.4% 38.5% 36.6% 35.6% 34.5%

Inventory 990 1,040 1,091 1,124 1,158

As a % of revenues 2.0% 2.0% 2.0% 2.0% 2.0%
Receivables 866 910 955 984 1,013
As a % of revenues 1.8% 1.8% 1.8% 1.8% 1.8%
Cash 4,170 6,294 8,614 11,101 13,720
As a % of revenues 8.4% 12.1% 15.8% 19.7% 23.7%

Total assets 26,026 28,243 30,661 33,209 35,892

Liabilities & Equity

Equity 21,026 24,243 27,661 31,209 34,892

Debt 5,000 4,000 3,000 2,000 1,000

Payables 0 0 0 0 0
As a % of revenues 0.0% 0.0% 0.0% 0.0% 0.0%

Total liabilities & Equity 26,026 28,243 30,661 33,209 35,892

35  
 Case  assignment  7:  Forecas&ng  Cash  Flow  statement  
Cash Flow
Cash Flow Statement 2007
Year 1 2008F
Year 2 2009F
Year 3 2010F
Year 4 2011F
Year 5
With  the  
EBIT 13,900 14,695 15,530 16,056 16,597
informa&on   Depreciation 2,000 2,000 2,000 2,000 2,000
presented  (profit  &   Operating cashflow before changes in WC 15,900 16,695 17,530 18,056 18,597

loss  and  Balance   Change in inventory -990 -50 -52 -33 -34
Change in receivables -41 -43 -45 -29 -30
Sheet)  at  hand  now   Change in payables 0 0 0 0 0
prepare  the  Cash   Income tax expense -3,453 -3,671 -3,899 -4,048 -4,202
Cash from operating activities 11,416 12,931 13,533 13,946 14,332
Flow  statement  for  
Acquisition of PPE -2,000 -2,000 -2,000 -2,000 -2,000
Year  1  –  Year  5   Cash from investing activities -2,000 -2,000 -2,000 -2,000 -2,000
 
Paydown of debt -1,000 -1,000 -1,000 -1,000 -1,000
  Interest expense -360 -300 -240 -180 -120
Dividend paid -7,061 -7,507 -7,974 -8,279 -8,593
  Cash from financing activities -8,421 -8,807 -9,214 -9,459 -9,713

Net increase in cash 995 2,124 2,320 2,487 2,619

Cash at 1 January 3,175 4,170 6,294 8,614 11,101

YE cash 4,170 6,294 8,614 11,101 13,720

END  OF  EXAMPLE  OF  FORECASTING  
 
 

37  
BALANCE SHEET
xUSD ths 2012 2013 2014 2015 2016
ASSETS
Cash 0 0 0 0 0
Account receivables 0 0 0 0 0
Inventories 0 0 0 0 0
Prepaid expenses 0 0 0 0 0
Other current assets 0 0 0 0 0
Total current Assets 0 0 0 0 0

Property, Plants, Equipement 0 0 0 0 0

Leasehold improvements 0 0 0 0 0
Vehicles 0 0 0 0 0
Other fixed assets 0 0 0 0 0
Total fixed Assets 0 0 0 0 0
TOTAL ASSETS 0 0 0 0 0

EQUITY & LIABILITIES

Accounts payables 0 0 0 0 0
Short-term interest bearing debt 0 0 0 0 0
Accrued expenses 0 0 0 0 0
Other current liabilities 0 0 0 0 0
Total current Liabilities 0 0 0 0 0

Long term interest bearing debt 0 0 0 0 0

Paid-in capital 0 0 0 0 0
Retained earnings 0 0 0 0 0
Total Equity 0 0 0 0 0
TOTAL EQUITY & LIABILITIES 0 0 0 0 0
error check = 0 0.0 0.0 0.0 0.0 0.0
PROFIT & LOSS STATEMENT
xUSD ths 2012F 2013F 2014F 2015F 2016F
Sales
Sales prod. A 0 0 0 0 0
Sales prod. B 0 0 0 0 0
Other Income 0 0 0 0 0
Total Sales 0 0 0 0 0
growth rate #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Cost of Goods Sold

COGS prod. A 0 0 0 0 0
COGS prod. B 0 0 0 0 0
Gross Profit 0 0 0 0 0
gross margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Selling, General & Administrative Expenses

Housing 0 0 0 0 0
Utilities 0 0 0 0 0
Management Fees 0 0 0 0 0
Personnel 0 0 0 0 0
Office expenses 0 0 0 0 0
Telephone costs 0 0 0 0 0
Subscriptions 0 0 0 0 0
Internet/website 0 0 0 0 0
Maintenance 0 0 0 0 0
Marketing 0 0 0 0 0
Travel & entertainment 0 0 0 0 0
Accounting 0 0 0 0 0
Legal 0 0 0 0 0
Other 0 0 0 0 0
Total SG&A 0 0 0 0 0
SG&A margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

EBITDA 0 0 0 0 0
EBITDA margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Depreciation 5 0 0 0 0
Amortization 0 0 0 0 0
EBIT -5 0 0 0 0
EBIT margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Interest 0 0 0 0 0
Net Profit Before Taxes -5 0 0 0 0
Profit margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
CASH FLOW STATEMENT
xUSD ths Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012F
CASH INFLOWS
Cash Sales prod. A 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash Sales prod. B 0 0 0 0 0 0 0 0 0 0 0 0 0
Payment of receivables 0 0 0 0 0 0 0 0 0 0 0 0 0
Other Income 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL CASH IN 0 0 0 0 0 0 0 0 0 0 0 0 0

CASH OUTFLOWS
Cost of Goods Sold 0 0 0 0 0 0 0 0 0 0 0 0 0
Housing 0 0 0 0 0 0 0 0 0 0 0 0 0
Utilities 0 0 0 0 0 0 0 0 0 0 0 0 0
Management Fees 0 0 0 0 0 0 0 0 0 0 0 0 0
Personnel 0 0 0 0 0 0 0 0 0 0 0 0 0
Office expenses 0 0 0 0 0 0 0 0 0 0 0 0 0
Telephone costs 0 0 0 0 0 0 0 0 0 0 0 0 0
Subscriptions 0 0 0 0 0 0 0 0 0 0 0 0 0
Internet/website 0 0 0 0 0 0 0 0 0 0 0 0 0
Maintenance 0 0 0 0 0 0 0 0 0 0 0 0 0
Marketing 0 0 0 0 0 0 0 0 0 0 0 0 0
Travel & entertainment 0 0 0 0 0 0 0 0 0 0 0 0 0
Professional advisors 0 0 0 0 0 0 0 0 0 0 0 0 0
Tax 0 0 0 0 0 0 0 0 0 0 0 0 0
Payment payables 0 0 0 0 0 0 0 0 0 0 0 0 0
Loan Payments 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank charges 0 0 0 0 0 0 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL CASH OUT 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash in minus out per period 0 0 0 0 0 0 0 0 0 0 0 0 0
Funding (needed)/excess 0 0 0 0 0 0 0 0 0 0 0
BEGINNING BALANCE 0 0 0 0 0 0 0 0 0 0 0 0 0
ENDING BALANCE 0 0 0 0 0 0 0 0 0 0 0 0 0
Tips  for  financial  modeling  –  planning  in  excel  

1.  Inputs  in  blue,  formula’s  in  black  

2.  Separate  input  sheet  
3.  Transparency  
4.  Break-­‐down  formula’s  
5.  do  not  consolidate  SG&A  
6.  Actual  versus  forecasted  
7.  Build  your  own  model  

41  
Conclusion  &  final  remarks  
Several  purposes  Financial  Planning:   Next  webinar  =  
•  To-­‐do,  task  overview,  empowerment,  evalua'on,  control  and   Aug  14:  
communica'on   Working  Capital  
–  An  unknown  
key  to  success  
Dynamics  of  the  3  statements  –  a  circle  
 
Think  through,  keep  it  simple  and  break-­‐down  

Financial  Planning  is  a  tool  forcing  you  to  think  about  every  liVle  detail  
on  a  period-­‐by-­‐period  basis  and  relate  financial  consequences  to  it   42  
 Thank  you!  
 
This  document  was  prepared  by  Eva  Hukshorn.  Several  people  and  organiza&ons  have  inspired  
her  to  write  this  presenta&on,  amongst  which  are,  but  not  limited  to  the  Founders  of  EFactor,  
ABN  AMRO/RBS,  University  of  Groningen,  Ins&tute  for  Management  Accountants