Calculating Profit and Loss and Cash Flow Forecasts

Rapidly turn a business plan for sales, margins, overheads and investment into detailed profit; liquidity; cash flow; bank; tax and equity forecasts.

How to Calculate Profit and Cash Flow Forecasts

Simple, straightforward and inexpensive, Figurewizard is designed for SMEs and their advisors to quickly forecast and plan profits, cash, liquidity, equity and taxes.

Nobody needs to "learn" Figurewizard. Easy to use, all that is needed to produce the forecasts and calculator / planners in a matter of minutes are your projected annual sales, profit margin, overheads, the acquisition and sale of fixed assets, financial arrangements such as the overdraft limit and some simple ratios.

From this, thirteen comprehensive forecasts covering profits, liquidity, cash flows, balance sheets, the bank and equity are created. Corporation tax and VAT are automatically calculated and applied to forecasts by the system with no further input called for from a user.

Up to a hundred complete sets of forecasts can be saved to  "My Account."  These can be retrieved for amendment or update at any time. Forecasts can be exported to Excel for formatting and printing.

Three powerful calculator / planners are created too including the unique What-If Calculator - Results are delivered in real time.

The Forecasts

These are the forecasts and planners that Figurewizard creates:

  • Cost of Goods Sold and Gross Profit
  • Profit and Loss: Operating: Pre-Tax and Post-Tax Profits
  • Balance Sheet
  • Analysis - Overheads and Expenses
  • Analysis - Assets and Liabilities
  • Fixed Assets - Depreciation and Net Book Values
  • Corporation Tax - Capital Allowances, Taxable Profit and Tax Payable
  • Monthly Receipts, Expenditures, the Bank and Undrawn Financing
  • Operating and Net Cash Flows
  • Monthly Accrued Pre-Tax Profit Charts
  • Monthly Break Even Sales Charts
  • Business Ratios - Liquidity
  • Business Ratios - Performance

In addition three calculator / Planners are created. The universal What-If Calculator is especially important when planning.

  • What-If Calculator and Planner
  • Dividends, Liquidity and Equity Calculator and Planner
  • Monthly Cash Flow with and without Factoring / Supply Chain Calculator and Planner

The Input Forms

Entering your proposed annual figures and ratios into the forms is nothing more than a matter of "how much" or "how many". As a result, each of the forms should take more than a minute or two to complete. They are as follows:

  • Title; Start Date; no. of Years to Forecast -1 to 3 years
  • Capital; Bank; Loans; Factoring / Supply chain finance (if selected)
  • Sales; Gross Profit Margin; % export sales
  • Purchases; % as Imports
  • Overheads and Expenses
  • Receipts and Payments ratios
  • Fixed assets Bought and Sold; % value of acquisitions financed
  • B/Fwd Balance Sheet Values (summary) for going concerns

Those figures are turned into the forecasts and calculator / planners including includes and applying  VAT transactions, quarterly VAT remittances and corporation tax

As a result you enter your figures excluding VAT with the sole exception of purchase of new company cars: That is because VAT cannot be recovered as input tax for these. It does not apply however to commercial vehicles whose values are always recognised as  "main pool assets."

By the same token when a company car is sold, VAT is not required to be added to the sale.

Entering Sales Ratios as Percentages

Sales by month are simply entered as percentages of the year's total. For example January may represent 6% of annual sales, February 4%, March 7% and so on up to 100%.

The system then calculates sales by transaction type. All tht is needed for this is for you to select percentages from the drop down boxes as follows:

  • % Sales as service / delivery charges, which are then added to trade sales by the system
  • % Sales as exports (which the system exempts from VAT by default)
  • % Sales representing domestic sales that are exempt from VAT.
  • % Sales as domestics subject to VAT are automatically created by default

Receipts are similarly broken down as percentages of the year's sales as follows:

  • % Sales as cash sales
  • % Sales as credit / debit card sales
  • % Sales by Open Credit - created by default

Entering Variable Overheads and Expenses Ratios

The values of these are charged to monthly profits in line with monthly sales volume, again by simple percentages as follows:

  • % Sales as bad debts
  • % Sales for cost of making deliveries
  • % Of overall average depreciation of all assets

Entering Monthly Cash Collections and Payments Ratios

Details of cash collection for credit sales are simply entered as the percentages of invoicing you expect to be paid up by month as follows:

  • Month 1 - % Annual sales expected to be paid within the month invoiced
  • Month 2 - % Annual sales expected to be paid one month after the month invoiced
  • Month 3 - % Annual sales expected to be paid two months after the month invoiced

And so on up to 100%. Payments for purchases from suppliers of goods and overheads on open credit are entered in exactly the same way. Purchases by letter of credit (if used) are dealt with separately in the form.

The What-If Calculator and Planner

A powerful planning tool and unique to Figurewizard, the What-If Calculator and Planner enables you to change your original input figures with single clicks of the mouse which in turn updates all of the forecasts in real time.

For example, you may choose to apply a reduction of 5% for overheads or change the gross profit margin from 41% to 42% or to increase the bank overdraft limit and loans.

As you make those changes the key elements of the forecasts which are displayed on the screen such as pre-tax profit, minimum / maximum months’ cash flow and the bank, working capital and net worth immediately update.

These are displayed as "before" and "after" together with the values by which they have been changed. The same before and after values are displayed in the accompanying charts illustrating profitability and accrued cashflow.

Dividend, Cash and Solvency Calculator

A new and important Year-End Dividend Calculator, illustrating how the value and payment dates of a dividend will affect cash, liquidity and solvency going forward has been added to Figurewizard.

The value of a proposed year-end dividend and date of payment are entered. That then returns a breakdown showing how the monthly bank balances, available and undrawn financing, such as loans and overdraft, working capital and solvency all instantly update.

Cash and Factoring / Supply Chain Finance Calculator and Chart

All you have to do here is to select the percentage of your sales on open credit you with to finance, the percentage service charge if applicable and the annual rate of interest.

That results in all of the forecasts instantly updating to include this new information to illustrate how the monthly bank account plus undrawn financing from the bank overdraft and factoring facility changes.

The Cash and Factoring / Supply Chain Finance calculator also features in both the What-If Caculator and the Dividend Planner.

All calculators work in real time. As changes are made, the results to profits, balance sheets, cash flows, the bank and so on change too. That includes re-calculating and applying VAT, corporation tax and interest charges.

Optionals

There are two important optional extras - Forecasting cash flow from factoring / supply chain finance and purchases by Letter of Credit.

With factoring / supply chain finance, you simply select the following.

  • % Invoicing to be factored
  • % Annual rate of interest
  • % Service charge, if any.

The systen then automatically calculates and applies the effect of these to all forecasts.

With purchases by letter of credit, select the following:

  • % Purchases by Letter of Credit (The value of purchases for the year will already have been calculated by the system)
  • How many months between issuing a Letter of Credit and the confirmed arrival of the goods.

Note that "confirmed arrival" represents the point at which the documents supporting the shipment of your order have been accepted by yourself.

Try Figurewizard for Free

The sample forecasts shown on the site are based on a single working example. There is a menu to take you to these at the top left of this screen.

Sample forecasts are fully interactive. Visitors are invited to make their own changes to the sample forecasts (without any prior obligation) either by selecting "edit" which takes you to the forms' menus or better still using the powerful What-If Calculator to see for yourself exactly how Figurewizard makes it possible for you to properly calculate and plan your business's profits finances and performance going forward.

Pricing - Subscribing and Saving Forecasts

For registered users all forecasts are automatically saved to "my account". Up to one hundred full sets of forecasts can be saved. These can be retrieved at any time for amending or updating.

The subscription costs £30 p. a. There are no other charges.

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