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Budgeting & Forecasting - Predicting the Outcome

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This is a presentation on Budgeting & Forecasting. Most entrepreneurs think that a Forecasting is just necessary for the investor. However, they should realize you are making forecasts and budgets for yourself. To understand and control your own business and organization. This presentation is supported with simple calculations and examples. See also Audio & 60-page Notes supporting this presentation. VIP members get Discount!! Author: Eva Hukshorn, EFactor

Text of Budgeting & Forecasting - Predicting the Outcome

  • 1. Budge&ng & Forecas&ng Predicng the outcome Author: Eva Hukshorn 1

2. EFactor: An introducon Founders Adrie Reinders, Marion Freijsen, Roeland Reinders Started OHM Inc. in 2004: Business Development for Fortune 2000 Serving (mainly) technology companies around the globe Goal: assist emerging technology companies in selling their product to Corporates In 2007 they wrote a book: The N-Factor - How ecient networking can change the dynamics of your business - Huge success: no theory, but hands-on ps & tricks Result: EFactor - a social plaUorm for entrepreneurs - Strategic business networking impacts the future of your business - Goal: share knowledge, increase sales, decrease costs, nd capital - Mission: increase success of entrepreneurs to start-up or accelerate their organizaon - In 2012 the new book was launched: The E-Factor: Entrepreneurship in the Social Media Age EFACTOR, THE WORLDS LARGEST ONLINE NETWORK FOR ENTREPRENEURS ON EARTH An online community oering you a network, knowledge, events, and every business resources you need to succeed 2 3. Eva Hukshorn: An introducon Work Experience - Current: Partner EFactor Board of Advisory: TreFoil Energy / CleanDrinks / Global Thinkers / ShowLinq Coach Startup: Bootcamp Amsterdam / New Venture McKinsey - 2009 2010: Dutch Bouque Marktlink Mergers & Acquisions, Amsterdam - 2007 2009: Royal Bank of Scotland Corporate Finance, Amsterdam - 2004 2009: ABN AMRO Corporate Finance New York, Amsterdam - 2003 2004: Accenture Consulng London, Amsterdam Educa&on - 1997 2002: MSc Economics, Finance University of Groningen, the Netherlands - 2003: Internaonal & Asian Studies Naonal Sun Yat-Sen University, Taiwan - 2009 2011: Cered Management Accounng (CMA) Instute of Management Accountants (IMA), United States - 2009 2001: Colloquium General & Modern Art Academy for History of Art, the Netherlands - 2012: Internaonal Financial Report Standards (DipIFRS) Associaon of Chartered Cered Accountants (ACCA), United States 3 4. FUNDING TUESDAY, EVERY TUESDAY So what can you expect from us each Funding Tuesday? 1. Webinars on EFactor on Finance & Funding related topics in the EVENT Secon 2. Blogs & interviews with informal investors and funded entrepreneurs with ps & tricks in the BLOGS secon under NOW 3. Finance & Funding related arcles on NOW feed 4. In the Finance & Funding GROUP on our website you will nd Q&As of the webinars under NETWORK 5. In the KNOWLEDGE base you will nd more and more presentaons on Finance & Funding related topics, including the webinar presentaons 6. And if you become a VIP MEMBER you will personally be supported on your Finance & Funding related quesons 4 5. Webinar Program Overview 2012 June 19: Business Plan Wring - A Roadmap to Success July 3: Pitching & Presentaon - 3 Minutes, 1 Impression July 17: Strategy - A Vision for the Future, A Strategy for Geing There July 31: Budge&ng & Forecas&ng - Predic&ng the Outcome Aug 14: Working Capital - An Unknown Key to Success Aug. 28: Capital Management - Playing with Risk Sept 11.: Funding & Investments - Some Sources are More Equal then Others Sept. 25: Valuaon - Art or Science Oct 9: Exit Strategy - Nice to Have or Need to Have? Oct. 23: Bootstrapping - An Alternave Answer to Funding Nov 6: Crowdfunding - The Power of Friends, Family and Fools Nov. 20: Networking - Nice You have 3000 Friends, I have 30 Relevant Connecons Dec. 4: Markeng & (Social) Media - Noise or Value? Dec. 11: No Sales, No Glory Dec. 18: Most Common Mistakes of Entrepreneurs 5 6. 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 liYle detail on a period-by-period basis and relate nancial consequences to it 6 7. Some terminology 1. Milestone Overview 2. Financial Planning 3. Targets 4. Budget 5. Master Budget 6. Forecasts 7 8. A summary of your vision and strategy: Your Milestone Overview 2012 2013 2014 2015 2016 M MVBusinessProductBeta testGoing toGetProduct Going to PromotionPlan developmarket US work developmentmarketcampaign mentProductspaceProd. BProd. A develop AlphaBreak-Expand in EU +mentCustomersPromotion Beta testeven Indiacampaign Employees3 5 81012 152025 Revenue / margin 200k / 10% 1mio / 17.3% 4mio / 21% 12mio / 28% Capital need: USD 150k2nd round: USD 1mio3rd round: USD 3mio 8 9. Balance Sheet simplied 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 9 10. Prot & Loss statement or Income statement simplied Prot & Loss statement YEAR 1 Revenue 1,000 Cost of Goods Sold (COGS) minus 400 Gross Prot 600 Gross margin 60% Selling, Administrave, 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 prot / retained earnings 200 10 11. Cash Flow statement simplied 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 ow generated from opera&ng ac&vi&es 150 Addions to equipment minus 50 Cash ow generated from inves&ng ac&vi&es -50 Payment debt minus 75 Cash ow generated from nancing ac&vi&es -75 Net increase in cash 25 Beginning balance cash 1 Jan. 25 Year-end cash 50 11 12. SIMPLE EXAMPLE OF FINANCIAL STATEMENT CALCULATIONS 12 13. 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 enty, 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 amer you made your order and paid? 13 14. Create star&ng Balance Sheet amer senng up legal en&ty Starting Balance Sheet December Year 0AssetsUSD Liabilities & EquityUSDStand0 Equity18,000 Retained Earnings 0Inventory0Account payable0 Debt 6,000Cash24,000 Account payable 0Total 24,000 Total 24,00014 15. Create star&ng Balance Sheet amer making rst steps to start opera&ons Balance Sheet 1st January Year 1AssetsUSD Liabilities & Equity USDStand 20,000 Equity18,000 Retained Earnings 0Inventory0Account payable825 Debt 6,000Cash 3,175 Account payable 0Total 24,000 Total 24,000 15 16. Case assignment 2: Prot & Loss statement Assume the following for the rst year of opera&ons: Number of hotdogs sold33,000 Consumer priceUSD 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 costsUSD 17,100 DepreciationUSD 2,000 Interest rate over debt USD 6,0006% Tax rate25.5%Assignment: prepare the prot and loss statement of your rst year in business 16 17. Case assignment 2: Prot & 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 ProfitNote: depreciaAon is included in the SG&A in this example 17 18. Case assignment 2: Prot & Loss statement Profit &Loss statementUSD Revenue 33,000 x 1.50 49,500 COGS33,000 x 0.50-16,500 Gross profit33,000 SG&A -19,100 Earnings Before Interest & Tax(EBIT)13,900 Interest6% of 6,000-360 Profit Before Tax 13,540 Tax 25,5% of 13,540-3,453 Net Profit10,087Note: 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 toRetained Earnings 18 19. 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 ows of cash-in and -out to dierent accounts over the course of one year To understand cash ow, 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 19 20. Case assignment 3: Cash Flow statement closing statements First we need to calculate our ending inventory: Ending inventory calculation# hotdogs purchased34,980# hotdogs sold 33,000Hotdogs in inventory 1,980Purchase price of 1 hotdog USD 0.50 xTotal cost price of inventory USD 990 The ending inventory stands at USD 990 per 31 Dec Year 1 20 21. Case assignment 3: Cash Flow statement closing statements Sales growth in Year 2 5%Inventory 1st month Year 1 bought in December Year 0#1,6505% increase #83+Inventory 1st month Year 2#1,733Purchase price of1 hotdogUSD 0.50xTo 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 21 22. Case assignment 3: Cash Flow statement closing statements Sales growth in Year 2 5%Inventory 1st month Year 1 bought in December Year 0#1,6505% increase #83+Inventory 1st month Year 2#1,733Purchase price of1 hotdogUSD 0.50xTo 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 22 23. Case assignment 3: Cash Flow statement cash count Below we have portrayed an overview of all cash expenses since incorpora&on: Beginning cash24,000Revenue 49,500Stand -20,000Cost of Goods Sold (COGS) -16,500Selling, General, Administrative Costs (SG&A) -17,100Interest-360Tax -3,453Dividend-7,061Maintenance -2,000Pay down of debt-1,000Inventory -990Account payable -866Ending cash4,170 23 24. Case assignment 3: Cash Flow statement The crux of the Cash Flow statement is to separate cash ows from opera&ng ac&vi&es from the other cash ows Moreover, we need to lter out non-cash items such as deprecia&on The Cash Flow statement dis&nguishes between three types of cash ows: Cash ow from operaons Cash ow from invesng acvies Cash ow from nancing acvies As you can see in this assignment, the nancial statement are interconnected. This is high-lighted by the pink cell 24 25. 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 cash25 26. 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-3,453Cash from operating activities 11,416 Acquisition of PPE-2,000Cash from investing activities -2,000 Pay down of debt-1,000 Interest expense-360 Dividend paid (notes) -7,061Cash from financing activities -8,421= Net increase in cash (A + B + C)995+ Cash at 1 January Year 13,175= Year-end cash 4,17026 27. Case assignment 4: Closing Balance Sheet Now that we have prepared the cash statement we can also nalize the closing Balance Sheet. Prepare the closing Balance Sheet for Year 1 Balance Sheet 31st December Year 1 AssetsUSD Liabilities & EquityUSD Stand20,000 Equity 18,000Retained earnings3,026 Inventory990 Account payable866 Debt 5,000 Cash 4,170 Account payable 0 Total26,026 Total26,026 27 28. END EXAMPLE OF FINANCIAL STATEMENT CALCULATIONS 28 29. Example of a non-realisc forecast REALISTIC AT FIRST SIDE? YES! Housing Posive Low cost Days per year 365 BASIC ASSUMPTIONS Meals per day c. 50 Amsterdam populaon 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 Negave No target Days per year 47wks/5d 235 Meals per day Implied c. 85 Brand exposure 11% 85,000 29 30. Revenue Forecasng starng point of everything 1. Split your revenue in units 2. Use historical data 3. Describe driving factors 4. Look for paYerns 5. Include new products 6. do not forget prices 7. Upside & downside scenarios 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 30 31. Overview of forecasng parameters Financial statement itemStandard modelConsiderRevenue % growthGDP, market growth, inflation, volumevs. price, price pressure, product mix,acquisitions/disposals, regionsCost of Goods SoldDirectly related units sold price pressure, efficiency, productmix, raw material costs, inflationGross margin% of revenues price pressure, efficiency, productmix, raw material costs, inflationSelling, General &% of revenues price pressure, efficiency, product mixAdministrative costsOperating costs growth% growthsales growth, variable vs. fixed costs,inflation, wage costs, efficiencyDepreciation% of opening tangible fixed accounting policy change, largeassetsinvestments (current & historic)31 32. Overview of forecasng parameters contd Financial statement itemStandard modelConsiderAmortisation% of opening intangible fixed goodwill: linear write-off and noassetsadditionsInventory (days)days of increased revenuesefficiency of working capital,seasonalityAccount receivable (days) days of increased revenuesefficiency of working capital, countrymix, seasonality, annual averageOther receivables % of increased revenues timing, annual average, constituents(Operating) cash% of increased revenues idem inventory days, industry averageAccount payable (days)days of total increased . costs idem account receivableOther payables% of increased revenues idem other receivablesNote: inventory days, account receivable days and account payable days will be explained in more detail in the next webinar, Aug. 14 32 33. Overview of forecasng parameters contd Financial statement itemStandard modelConsiderCapital expenditure % of increased or total revenues large investments, maintenance(expansion and sustaining) versus expenditureDividend (pay-out ratio)% of net earnings before extra- % of earnings or stable Dividend perordinariesShare (DPS) growthPreferred interim dividends % of preferred share capitaloutstandingPreferred interim dividend% of preferred dividendsInterest on debtinterest rate maturity of debt, default spreadInterest on cashinterest rate current market rate 33 34. EXAMPLE OF FORECASTING 34 35. Case assignment 5: Forecas&ng Prot & 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 rst two years and thereater 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 35 36. P&L2007 2008F 2009F 2010F 2011F Year 1 Year 2Year 3Year 4Year 5 Forecas&ng P&L Profit & Loss Statement Revenues 49,50051,97554,57456,21157,897 Growth5.0%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 33,00034,65036,38337,47438,598 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 revenues34.5% 34.5% 34.5% 34.5% 34.5% protability of the company going EBITDA 15,90016,69517,53018,05618,597 EBITDA margin32.1% 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 13,90014,69515,53016,05616,597 EBIT margin28.1% 28.3% 28.5% 28.6% 28.7% Interest (@ 6%) -360-300-240-180-120 PBT13,54014,39515,29015,87616,47727.4% 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 10,08710,72411,39111,82712,276 Profit margin20.4% 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 earnings3,026 3,2173,4173,548 3,683 37. Case assignment 6: Forecas&ng Balance Sheet In our case, forecas&ng of the Balance Sheet requires liYle 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: Depreciaon equals the maintenance investment in our stand, i.e. xed assets remain constant Equity is adapted automacally: the retained earnings from the Prot & Loss statement ow into Equity Debt is paid down yearly in six years and subsequently decreases with USD 1,000 per year Cash = last years cash + the net increase in cash (from CF) 37 38. Balance SheetBalance sheetBalance Sheet2007Year 1 2008F Year 2 2009FYear 3 2010F Year 42011F Year 5AssetsKraamStand 20,000 20,000 20,000 20,00020,000As % % of revenuesAs a of revenues 40.4%38.5%36.6%35.6% 34.5%Inventory9901,0401,091 1,124 1,158As a % of revenues 2.0% 2.0% 2.0%2.0%2.0%Receivables866910955 984 1,013As a % of revenues 1.8% 1.8% 1.8%1.8%1.8%Cash 4,170 6,2948,61411,10113,720As a % of revenues 8.4%12.1%15.8% 19.7% 23.7%Total assets26,026 28,243 30,661 33,20935,892Liabilities & EquityEquity21,026 24,243 27,661 31,20934,892Debt 5,0004,0003,000 2,000 1,000Payables 000 0 0As a % of revenues 0.0% 0.0% 0.0%0.0%0.0%Total liabilities & Equity26,026 28,243 30,661 33,20935,892 38 39. Case assignment 7: Forecas&ng Cash Flow statement Cash FlowCash Flow Statement 2007Year 12008F Year 2 2009F Year 32010F Year 42011F Year 5With the EBIT13,900 14,69515,53016,05616,597informa&on Depreciation 2,0002,000 2,000 2,000 2,000presented (prot & Operating cashflow before changes in WC 15,900 16,69517,53018,05618,597loss and Balance Change in inventory-990-50 -52 -33 -34Change in receivables-41 -43 -45 -29 -30Sheet) at hand now Change in payables 0 0 0 0 0prepare the Cash Income tax expense -3,453-3,671-3,899-4,048-4,202Cash from operating activities 11,41612,93113,53313,94614,332Flow statement for Acquisition of PPE-2,000-2,000 -2,000-2,000-2,000Year 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 -240-180-120Dividend paid -7,061-7,507 -7,974-8,279-8,593 Cash from financing activities-8,421-8,807 -9,214-9,459-9,713Net increase in cash995 2,124 2,320 2,487 2,619Cash at 1 January 3,175 4,170 6,294 8,61411,101YE cash 4,170 6,294 8,61411,10113,720 40. END OF EXAMPLE OF FORECASTING 40 41. BALANCE SHEETxUSD ths 2012 2013 2014 2015 2016ASSETSCash00000Account receivables 00000Inventories 00000Prepaid expenses00000Other current assets00000Total current Assets 00000Property, Plants, Equipement00000Leasehold improvements00000Vehicles00000Other fixed assets00000Total fixed Assets 00000TOTAL ASSETS 00000EQUITY & LIABILITIESAccounts payables 00000Short-term interest bearing debt00000Accrued expenses00000Other current liabilities 00000Total current Liabilities00000Long term interest bearing debt00000Paid-in capital 00000Retained earnings 00000Total Equity 00000TOTAL EQUITY & LIABILITIES 00000error check = 0 0.00.00.00.00.0 42. PROFIT & LOSS STATEMENTxUSD ths2012F 2013F 2014F 2015F 2016FSalesSales prod. A0 0 0 0 0Sales prod. B0 0 0 0 0Other Income 0 0 0 0 0Total Sales0 0 0 0 0growth rate#DIV/0! #DIV/0! #DIV/0! #DIV/0!Cost of Goods SoldCOGS prod. A 0 0 0 0 0COGS prod. B 0 0 0 0 0Gross Profit 0 0 0 0 0gross margin#DIV/0!#DIV/0! #DIV/0! #DIV/0! #DIV/0!Selling, General & Administrative ExpensesHousing0 0 0 0 0Utilities0 0 0 0 0Management Fees0 0 0 0 0Personnel0 0 0 0 0Office expenses0 0 0 0 0Telephone costs0 0 0 0 0Subscriptions0 0 0 0 0Internet/website 0 0 0 0 0Maintenance0 0 0 0 0Marketing0 0 0 0 0Travel & entertainment 0 0 0 0 0Accounting 0 0 0 0 0Legal0 0 0 0 0Other0 0 0 0 0Total SG&A 0 0 0 0 0SG&A margin #DIV/0!#DIV/0! #DIV/0! #DIV/0! #DIV/0!EBITDA 0 0 0 0 0EBITDA margin #DIV/0!#DIV/0! #DIV/0! #DIV/0! #DIV/0!Depreciation 5 0 0 0 0Amortization 0 0 0 0 0EBIT-5 0 0 0 0EBIT margin #DIV/0!#DIV/0! #DIV/0! #DIV/0! #DIV/0!Interest 0 0 0 0 0Net Profit Before Taxes -5 0 0 0 0Profit margin #DIV/0!#DIV/0! #DIV/0! #DIV/0! #DIV/0! 43. CASH FLOW STATEMENTxUSD ths Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012FCASH INFLOWSCash Sales prod. A 0 0 0000 00 000 0 0Cash Sales prod. B 0 0 0000 00 000 0 0Payment of receivables 0 0 0000 00 000 0 0Other Income 0 0 0000 00 000 0 0TOTAL CASH IN00 0 0 0 0 000 0 000CASH OUTFLOWSCost of Goods Sold 0 0 0000 00 000 0 0Housing0 0 0000 00 000 0 0Utilities0 0 0000 00 000 0 0Management Fees0 0 0000 00 000 0 0Personnel0 0 0000 00 000 0 0Office expenses0 0 0000 00 000 0 0Telephone costs0 0 0000 00 000 0 0Subscriptions0 0 0000 00 000 0 0Internet/website 0 0 0000 00 000 0 0Maintenance0 0 0000 00 000 0 0Marketing0 0 0000 00 000 0 0Travel & entertainment 0 0 0000 00 000 0 0Professional advisors0 0 0000 00 000 0 0Tax0 0 0000 00 000 0 0Payment payables 0 0 0000 00 000 0 0Loan Payments0 0 0000 00 000 0 0Bank charges 0 0 0000 00 000 0 0Other0 0 0000 00 000 0 0TOTAL CASH OUT 00 0 0 0 0 000 0 000Cash in minus out per period 0 0 0000 00 000 0 0Funding (needed)/excess0 0000 00 000 0BEGINNING BALANCE00 0 0 0 0 000 0 000ENDING BALANCE 00 0 0 0 0 000 0 000 44. Tips for nancial modeling planning in excel 1.Inputs in blue, formulas in black 2.Separate input sheet 3.Transparency 4.Break-down formulas 5.do not consolidate SG&A 6.Actual versus forecasted 7.Build your own model 44 45. Conclusion & nal remarks Several purposes Financial Planning: Next webinar = To-do, task overview, empowerment, evaluaon, control and Aug 14: communicaon 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 liYle detail on a period-by-period basis and relate nancial consequences to it 45 46. Webinar Program Overview 2012 June 19: Business Plan Wring - A Roadmap to Success July 3: Pitching & Presentaon - 3 Minutes, 1 Impression July 17: Strategy - A Vision for the Future, A Strategy for Geing There July 31: Budgeng & Forecasng - Predicng the Outcome Aug 14: Working Capital - An Unknown Key to Success Aug. 28: Capital Management - Playing with Risk Sept 11.: Funding & Investments - Some Sources are More Equal then Others Sept. 25: Valuaon - Art or Science Oct 9: Exit Strategy - Nice to Have or Need to Have? Oct. 23: Bootstrapping - An Alternave Answer to Funding Nov 6: Crowdfunding - The Power of Friends, Family and Fools Nov. 20: Networking - Nice You have 3000 Friends, I have 30 Relevant Connecons Dec. 4: Markeng & (Social) Media - Noise or Value? Dec. 11: No Sales, No Glory Dec. 18: Most Common Mistakes of Entrepreneurs 46 47. BECOME A VIP MEMBER WITHIN 1 WEEK AND GET YOUR PLAN CHECKED! 1. Increased Business Exposure and Social Media Integra&on 2. Jay Abrahams Business Maximizer Manual 3. Access To Exclusive Expert Events Twice A Month 4. "Special Solu&on" Ac&on-Based Reports, at least twice a month 5. VIP Only Discounts 6. VIP Weekly NewsleYer 7. VIP Inner Circle 8. eProducts from the worlds largest library 9. IN ADDITION: If you aYended this workshop AND become a VIP Member of EFactor within ONE WEEK, you can send me you ques&ons on working capital and I will provide you with assistance: www.efactor.com/hukshorn HTTP://WWW.EFACTOR.COM/VIP 47 48. 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