Report name: Sample Forecast
How the Forecast Assets and Liabilities Analysis is Calculated
Cash and cash convertible assets are the source of liquidity. Depreciated fixed assets represent residual useful working life, not sale value.
How the Forecast Assets and Liabilities Analysis is Calculated
Cash and cash convertible assets are the source of liquidity. Depreciated fixed assets represent residual useful working life, not sale value.
| forecast for year beginning the 1st. | May 2017 | May 2018 | May 2019 |
| Fixed assets | |||
| Main Pool Assets | 28,873 | 34,871 | 42,958 |
| Company Cars | 27,751 | 19,210 | 34,832 |
| Total Fixed Assets | 56,624 | 54,081 | 77,791 |
| Current Assets | |||
| Stock / Inventory | 125,000 | 150,000 | 170,000 |
| Sales Ledger | 86,092 | 93,178 | 146,549 |
| Dr / Cr Card Balance | 0 | 0 | 0 |
| Prepaid Letters of Credit | 0 | 0 | 0 |
| Vat Refundable | 0 | 0 | 0 |
| Cash at Bank | 0 | 14,300 | 183,993 |
| Factoring CR. Balance | 0 | 0 | 0 |
Asset Finance Interest in Suspense | 6,583 | 4,255 | 6,208 |
| Loan Interest in Suspense | 0 | 0 | 0 |
| Total Current Assets | 217,675 | 261,733 | 506,750 |
| Current Liabilities | |||
| Trade Creditors | 60,821 | 60,195 | 76,752 |
| Sundry Creditors | 13,428 | 17,381 | 21,374 |
Vat Payable | 5,731 | 7,899 | 10,606 |
| Hire Purchase | 21,350 | 17,865 | 21,333 |
| Loans | 0 | 0 | 0 |
| Bank Overdraft | 35,439 | 0 | 0 |
| Factoring Dr. Balance | 0 | 0 | 0 |
| Corporation tax Due | 13,613 | 18,495 | 47,077 |
Asset Finance Interest in Suspense | 4,270 | 3,573 | 4,267 |
| Loan Interest in Suspense | 0 | 0 | 0 |
Dividends Payable | 0 | 0 | 0 |
| Total Current Liabilities | 154,652 | 125,407 | 181,409 |
| Long Term Liabilities | |||
Asset Financing | 11,565 | 3,413 | 9,707 |
| Loan | 0 | 0 | 0 |
Asset Finance Interest in Suspense | 2,313 | 683 | 1,941 |
| Loan Interest in Suspense | 0 | 0 | 0 |
| Total Long Term Liabilities | 13,878 | 4,095 | 11,648 |
Net Current Assets (Working Capital) | 63,022 | 136,326 | 325,341 |
| Net Assets | 105,768 | 186,311 | 391,483 |
Cost less depreciation defines the net book value of fixed assets. The purpose of depreciation is to reflect the residual working life of a fixed asset in a going concern, not its fair value in the event of being sold.
Depreciated fixed assets play no part in determining working capital. Debt arising from financing them does.
As depreciation is a provision not involving transfers of cash, it is not accepted by HMRC as a legitimate charge to profits.
Instead, capital allowances are set off against the taxable profit, which for main pool assets allow 100% tax relief for the average SME in the first year of ownership.
When producing profit, liquidity and cashflow forecasts using Figurewizard, capital allowances and .taxable profits are calculated and applied by our system without intervention called for from the user.
Fixed asset purchases, their VAT, depreciation and financing are all budgeted.
For example assets acquired at a cost of 6,000 in a given year are allocated by the system at £500 a month.meaning that depreciation is charged on 500 in month 1, 1,000 in month 2, 1,500 in month 3 and so on. Financing and associated interest charges are allocated on the same basis. The sale of fixed assets are treated in the same way on a first in first out basis.
Figurewizard also calculates and applies VAT, including calculating and applying quarterly remittances or refunds to cash flow forecasts.
That does not apply to commercial vehicles, which are regarded by HMRC as main pool assets and therefore subject to 100% annual investment allowance in the year they are acquired.
Forecast current assets lists only cash and trading assets that are expected to be turned into cash in the normal course of trade within a year.
The principal trading assets are accounts receivable and stock. Auditors will check the progress of such assets against their year-end values and may reduce them if they are perceived to take more than a year to convert into cash.
Examples of other qualifying current assets are deposits and pre-payments, including letters of credit, issued for the purchase of goods whose documentation has not yet been accepted.
Debt that is repayable within twelve months going forward is classified as current liabilities.
Current liabilities are not restricted to those incurred in the acquisition of current assets. All debt including that for borrowings, such as the bank overdraft, financing the acquisition of both current and fixed assets or dividends declared and outstanding for payment are included.