Pro Forma Financial Statements for My Business Venture Ltd.
Using the same business you started in the first assignment, Your Business Venture, you will continue to build a financial plan for the business.
Instructions
Write a 3-4 page paper in which you:
Prepare a pro forma balance sheet for the first 12 months of your business. Include the assumptions on which it is based. Justify your balance sheet.
Prepare a pro forma income statement for the first 12 months of your business. Include the assumptions on which it is based. Justify your income statement.
Prepare a pro forma cash budget for the first 12 months of your business. Include the assumptions that you have made when creating the budget. Justify your budget.
Scrutinize tangible and intangible costs of obtaining financial capital for your business start-up to determine whether the costs justify the implementation of the funding source.
Assume your business is five years old and running profitably and consider how you would grow your business over the next five years. Determine the specific details that would make the equity approach to valuing your business worthwhile. Provide a rationale with your response.
Pro Forma Financial Statements-My Business Venture.
Student’s Name
Institutional Affiliation
Course
Instructor
Date
Pro Forma Financial Statements-My Business Venture.
My Business Venture Ltd. was launched in the first assignment. In this analysis, the financial plan for the business will continue to be built by preparing the pro forma balance sheet, income statement, and cash budget for the first 12 months of the business. The statements will be justified and assumptions on which they are based included. This will be followed by a scrutiny of the costs of financial capital, and evaluation of the business growth over the next five years.
Pro Forma Balance Sheet
My Business Venture
Pro Forma Balance Sheet
For the year ended November 30, 2021
ASSETS
$
Current Assets:
Cash & Cash Equivalents
39,855
Accounts Receivables
25,500
Inventory
39,025
Prepaid Expenses
4,031
Total current assets
108,411
Fixed Assets:
Land
95,000
Buildings
42,900
Furniture & Equipment
27,500
Vehicles
45,000
Total fixed assets
210,400
Total Assets
318,811
LIABILITIES
Current Liabilities:
Accounts Payable
5,011
Bank overdraft
9,500
Statutory taxes payable
2,500
Interest payable
6,200
Other accrued expenses
5,600
Total current liabilities
28,811
Non-Current Liabilities:
Long-term loan
-
Employee pension liability
27,630
Total Liabilities
56,441
Shareholder's Equity
Equity Share Capital
250,000
Retained Income
12,370
Shareholder's Equity
262,370
Total Liabilities & Shareholder's Equity
318,811
The above balance sheet is based on the following assumptions; i) The business was commenced with an initial share capital of $250,000. ii) The fiscal year ends on November 30, 2021. iii) The fixed assets are recorded at their book value. iv) No taxes or interest expense had been paid leading to accrued liabilities. v) No long-term loan had been taken, only the bank overdraft. vi) No dividend has been paid. All the earnings were retained, and vii) No dividends were paid thus all the earnings were retained and included in the shareholders’ equity.
Pro Forma Income Statement
My Business Venture
Pro Forma Income Statement
For the year ended November 30, 2021
$
Net Sales/Revenues
82,885
Cost of Goods Sold
49,761
Gross Profit/Margin
33,124
Expenses
Promotion & Advertising
1,050
Depreciation
2,997
Repairs & Maintenance
543
Insurance expenses
265
General office supplies
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