I am having the worst time: I need to build a four year projected balance sheet. I've already done my four year profit projection and was wondering if someone could help me with the balance sheet. I did year one, can't go any further: Below is the four year profit projection:
Four Year Profit Projection
2010 % 2011 % 2012 % 2013 %
Sales $240,000 100.00% $417,000 100.00% $480,000 100.00% $604,000 100.00%
Cost/ Goods Sold (COGS) 46,000 19.17% 52,000 12.47% 75,000 15.63% 116,000 19.21%
Gross Profit $194,000 80.83% $365,000 87.53% $405,000 84.38% $488,000 80.79%
Operating Expenses
Salary (Office & Overhead) $50,000 20.83% $52,000 12.47% $55,000 11.46% $60,000 9.93%
Payroll (taxes etc.) 13,000 5.42% 15,600 3.74% 15,600 3.25% 16,000 2.65%
Outside Services - 0.00% - 0.00% - 0.00% - 0.00%
Supplies (off and operation) 22,800 9.50% 26,000 6.24% 32,000 6.67% 38,000 6.29%
Repairs/ Maintenance - 0.00% - 0.00% - 0.00% - 0.00%
Advertising 1,500 0.63% 1,500 0.36% 1,200 0.25% 1,000 0.17%
Car, Delivery and Travel - 0.00% - 0.00% - 0.00% - 0.00%
Accounting and Legal 3,500 1.46% 3,000 0.72% 2,500 0.52% 2,000 0.33%
Rent 60,000 25.00% 60,000 14.39% 60,000 12.50% 60,000 9.93%
Telephone 300 0.13% 300 0.07% 300 0.06% 300 0.05%
Utilities 10,000 4.17% 14,000 3.36% 17,000 3.54% 20,000 3.31%
Insurance 12,000 5.00% 12,000 2.88% 12,000 2.50% 12,000 1.99%
Taxes (real estate etc.) 7,500 3.13% 7,500 1.80% 7,500 1.56% 7,500 1.24%
Interest 2,500 1.04% 2,500 0.60% 2,500 0.52% 2,500 0.41%
Depreciation - 0.00% - 0.00% - 0.00% - 0.00%
Supplemental Equipment 2,500 1.04% 5,000 1.20% 3,000 0.63% 5,000 0.83%
Other expense (specify) - 0.00% - 0.00% - 0.00% - 0.00%
Total Expenses $185,600 77.33% $199,400 47.82% $208,600 43.46% $224,300 37.14%
Net Profit Before Tax 8,400 165,600 196,400 263,700
Income Taxes 2,097 33,120 38,800 52,740
Net Profit After Tax 6,303 132,480 157,600 210,960
Owner Draw/ Dividends - - - -
Adj. to Retained Earnings $4,206 $132,480 $157,600 $210,960
To create a four-year projected balance sheet, you will need to gather additional information about your company's assets, liabilities, and equity for each year. Here's the step-by-step process:
Step 1: Identify your company's assets:
- Make a list of all the assets your company currently owns or will acquire in the next four years.
- Assets may include cash, accounts receivable, inventory, property, plant, equipment, and intangible assets such as patents or trademarks.
- Assign a value to each asset for each year based on your projections.
Step 2: Determine your company's liabilities:
- Make a list of all the liabilities your company currently has or will incur in the next four years.
- Liabilities may include accounts payable, loans, accrued expenses, and any other debts or obligations.
- Assign a value to each liability for each year based on your projections.
Step 3: Calculate owner's equity:
- Owner's equity represents the value of the owner's investment in the company.
- If there are no additional investments or withdrawals by the owner, the owner's equity will be the same across all years.
- If there are additional investments or withdrawals, update the owner's equity for each year accordingly.
Step 4: Prepare the balance sheet:
- The balance sheet is divided into two main sections: assets and liabilities + equity.
- For each year, list the assets on the left side and their corresponding values.
- On the right side, list the liabilities and owner's equity, including any changes from the previous year (e.g., additional loans, repayments, or changes in equity).
- Calculate the total assets and total liabilities + equity for each year.
Step 5: Repeat steps 1-4 for the remaining three years:
- Use the same process to project the assets, liabilities, and equity for each of the next three years.
- Adjust the values based on the percentage changes provided in your profit projection.
- Update any changes to the liabilities, owner's equity, and other relevant factors.
By following these steps, you should be able to create a four-year projected balance sheet.