Profit and Loss Statement for First Year of Operations

Develop the Profit and Loss Statement
for the first year of operations

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
Break even analysis.........................................................................................................................4
Profit and Loss Statement and Balance Sheet Analyses:.................................................................6
Monthly cash flow for the first year of operation............................................................................9
Projected annual cash inflows for 5 years.......................................................................................9
CONCLUSION AND RECOMMENDATION............................................................................11
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
This report is based on various financial elements such as break even analysis, profit and loss
statement, balance sheet, monthly cash flow and annual cash flows. The case presented shows
that Felix has provided not complete information’s; thus for calculation purpose data is assumed.
The transaction is carried out between two countries; Switzerland and French. Due to different
currencies; foreign currency exchange rate for one CHF is taken as 0.0090 XPF, all the
transactions will be carried out in Swiss France; because Felix is the citizen of Switzerland and
balance sheet and cost of operations has to be calculated for him.

Break even analysis
Project 1
4800 pearl Annually CHF CHF
Selling price per pearl 270 1296000
Less: Variable cost per
pearl:
Packaging and Shipping 15
Purchases 86
Handling fee @ 1.2% per
sale 3.240 105 502512
Contribution per pearl 165 793488
Period cost (Fixed Cost):
Total cost to sales (annual)
@ CHF (3.600/month*2) -
86400
Monitoring fee @
CHF100/month -1200
Rent @ CHF 850/month
-
10200 97800 97800
Net Profit 695688
Working Note:
Handling fee per order (400 pearl at a
time) =
400 Pearl × 270 ×
1.2% 1296
Per Kg Handling fee
= CHF 768/400 Kg =
CAD
1.92/Kg
Break even point (Units) =
Fixed cost/ Contribution per
unit
= CHF 97800/165 per pearl
= 593
Approx. 593 units
Break even point (CHF) = Breakeven point (units) × Sales
price per kg
= 593 × 270 per pearl