Monthly Sales and Cost Analysis

This assignment requires you to analyze the financial performance of a company over the course of a year (Year 5). You are provided with monthly data on Sales, Cost of Sales, and Gross Profit. Your task is to carefully examine this data to understand the company's revenue trends, profitability, and cost structure. You will need to calculate various metrics such as total sales for the year, average monthly sales, and the overall gross profit margin. This analysis will help you gain insights into the company's financial health and performance.

Running head: PROJECT MANAGEMENT ECONOMICS AND FINANCE
Project Management Economics and Finance
Name of Student:
Name of University:
Author’s Note:

1
PROJECT MANAGEMENT ECONOMICS AND FINANCE
Table of Contents
Start-up Requirements.....................................................................................................................0
Projected Income Statement............................................................................................................2
Cash Flow Statement.......................................................................................................................3
Balance Sheet...................................................................................................................................5
Depreciation Schedule.....................................................................................................................7
Financial Ratios...............................................................................................................................8
Net Profit Forecast...........................................................................................................................8
Sales Forecast..................................................................................................................................9

0
PROJECT MANAGEMENT ECONOMICS AND FINANCE
Start-up Requirements
Start-up Requirements
Start-up Expenses
Fixed Costs Particulars Amount
($)
Premises (RENT & RATES) $18,000
Wages $8,000
Interest on loan 8% $7,500
Accountant Fees $20,000
Payroll Tax $3,800
Retainer contracts $15,000
Sales and Marketing $18,000
Postage & Telephone $1,650
Brouchers $2,500
Vehicle maintenance Cost $35,000
Operating cost $2,250
Market survey $1,975
Preliminary expenses $1,900
Lease payments $14,000
Total Fixed Costs $149,575
Average Monthly Costs
Rent $1,500
Lease payments $1,167
Interest on loan 3% $625

1
PROJECT MANAGEMENT ECONOMICS AND FINANCE Postage & Telephone $138
Repairs and Maintenance $208
Salaries / Wages $667
Total Average Monthly
Costs $4,304
x Number of Months: 12
Total Monthly Costs $51,650
Total Startup Expenses $201,225
Start-up Assets
Owner Funding
Owners Fund $100,000
Total Owner Funding $100,000
Loans
Bank Loan $75,000
Other
Total Loans $75,000
Total Start up Funds $175,000
Assets
Equipment $32,000
Vehicles $25,000
Computer $35,000
Total Fixed Assets $92,000
Total Start-up Assets $267,000

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PROJECT MANAGEMENT ECONOMICS AND FINANCE
Projected Income Statement
(4) PROFIT AND LOSS FORECAST
Year 1 2 3 4 5
Revenue 780,000 897,000 1,031,550 1,186,283 1,364,225
Cost of sales 330,000 375,000 460,000 460,000 480,000
Gross profit 450,000 522,000 571,550 726,283 884,225
Gross Margin 563,070 625,365 730,690 792,335 864,547
Expenses/overheads
Premises (rent, rates) 18,000 18,000 18,000 18,000 18,000
Wages and salaries 8,000 10,000 12,000 15,000 17,500
Operating cost 2,250 2,450 2,600 2,850 3,050
Accountant Fees 20,000 20,000 20,000 22,000 20,000
Payroll Tax 3,800 4,100 4,400 4,700 5,100
Utilities 15,000 17,500 20,000 22,500 25,000
Sales and Marketing 18,000 20,000 22,000 25,000 27,500
Postage & Telephone 1,650 1,850 2,150 2,350 2,600
Repairs and Maintenance 2,500 2,750 3,000 3,250 3,500

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PROJECT MANAGEMENT ECONOMICS AND FINANCE
Vehicle maintenance Cost 35,000 35,000 35,000 45,000 45,000
Preliminary expenses 1,900 2,300 2,600 2,850 3,150
Lease Payments 14,000 16,000 19,000 21,000 24,000
Total expenses/overheads 140,100 133,950 141,750 163,500 170,400
Profit before tax 309,900 388,050 429,800 562,783 713,825
Tax @ 30% 92,970 116,415 128,940 168,835 214,147
Profit after tax 216,930 271,635 300,860 393,948 499,677
Transfer to reserves 309,900 388,050 429,800 562,783 713,825
ROC 217% 272% 262% 298% 329%
Cash Flow Statement
(2) CASHFLOW FORECAST
Preop
Year 0 1 2 3 4 5
CASH INFLOWS
Cash from Sales 780,000 897,000
1,031,55
0
1,186,28
3 1,364,225
Directors loans 75,000 75,000 75,000 75,000 75,000 75,000
Capital Employed 100,000 100,000 115,000 132,250 152,088 174,901
Other cash inflows

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PROJECT MANAGEMENT ECONOMICS AND FINANCE
TOTAL CASH INFLOW 175,000 955,000
1,087,00
0
1,238,80
0
1,413,37
0 1,614,126
CASH OUTFLOWS
Payments for materials 330,000 375,000 460,000 460,000 480,000
operating expenses ( ) 0
Premises (rent, rates) 0 18,000 18,000 18,000 18,000 18,000
Wages and salaries 0 8,000 10,000 12,000 15,000 17,500
General expenses 0 2,250 2,450 2,600 2,850 3,050
Interest and bank charges payable 0 7,500 7,500 7,500 7,500 7,500
Lease payments 0 14,000 16,000 19,000 21,000 5000
Corporation Tax 92,970 116,415 128,940 168,835 214,147
Market survey costs 0 1,975 2,125 2,375 2,450 2,725
Other preliminary expenses 0 1,900 2,300 2,600 2,850 3,150
capital expenditure
Plant and Machinery 0 35,000 35,000 35,000 35,000 35,000
financing repayments
Loan repayments 7,500 7,500 7,500 7,500
TOTAL CASH OUTFLOWS 0 511,595 592,290 695,515 740,985 793,572
Cash flow summary
NET CASHFLOW FOR PERIOD 175,000 443,405 494,710 543,285 672,385 820,553
OPENING CASH BALANCE 0 175,000 618,405
1,113,11
5
1,656,40
0 2,328,785
CLOSING CASH BALANCE 175,000 618,405
1,113,11
5
1,656,40
0
2,328,78
5 3,149,338

5
PROJECT MANAGEMENT ECONOMICS AND FINANCE
Balance Sheet
Balance Sheet
Assets FY-1 FY-2 FY-3 FY-4 FY-5
Current Assets
Cash $196,050 $294,050 $278,450 $359,270 $478,776
Accounts receivable $780,000 $897,000 $1,031,550 $1,186,28
3 $1,364,225
Total current assets $976,050 $1,191,050 $1,310,000 $1,545,55
3 $1,843,001
Fixed (Long-Term) Assets
Vehichels $25,000 $25,600 $22,400 $19,200 $16,000
Furniture $32,000 $16,000 $12,800 $10,240 $8,192
Equipment $35,000 $22,400 $17,920 $14,336 $11,469
(Less accumulated depreciation) $15,200 $12,800 $10,880 $9,344 $8,115
Intangible assets $50,700
Total fixed assets $127,500 $51,200 $42,240 $34,432 $27,546
Total Assets $1,103,550 $1,242,250 $1,352,240 $1,579,98
5 $1,870,546
Liabilities and Owner's Equity
Current Liabilities
Accounts payable $24,000 $25,000 $27,000 $25,000 $27,000

6
PROJECT MANAGEMENT ECONOMICS AND FINANCEAccrued Rent $18,000 $18,000 $18,000 $18,000 $18,000
Bank Charges Payable $3,000 $3,000 $3,000 $3,000 $3,000
Short-term loans $10,000 $10,000 $10,000 $10,000 $10,000
Income taxes payable $92,970 $116,415 $128,940 $168,835 $214,147
Accrued salaries and wages $8,000 $10,000 $12,000 $15,000 $17,500
General Expenses $2,250 $2,450 $2,600 $2,850 $3,050
Lease Payment $14,000 $16,000 $19,000 $21,000 $24,000
Current portion of long-term debt $40,000 $30,000 $20,000 $35,000 $28,000
Total current liabilities $212,220 $230,865 $240,540 $298,685 $344,697
Long-Term Liabilities
Long-term debt $75,000 $90,000 $80,000 $70,000 $60,000
Less: Loan Repayment $7,500 $7,500 $7,500 $7,500
Deferred income tax $189,500 $154,200 $176,290 $109,982 $84,946
Total long-term liabilities $264,500 $236,700 $248,790 $172,482 $137,446
Owner's Equity
Owner's investment $100,000 $115,000 $132,250 $152,088 $174,901
Net Profits $216,930 $271,635 $300,860 $393,948 $499,677
Reserve and Surplus $309,900 $388,050 $429,800 $562,783 $713,825
Total owner's equity $626,830 $774,685 $862,910 $1,108,81
8 $1,388,403
Total Liabilities and Owner's Equity $1,103,550 $1,242,250 $1,352,240 $1,579,98
5 $1,870,546

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PROJECT MANAGEMENT ECONOMICS AND FINANCE
Depreciation Schedule
(3) DEPRECIATION SCHEDULE
Year 0 1 2 3 4 5
Fixed Assets
Furniture 32000 28,800 25,600 22,400 19,200 16,000
Vehicles 25000 20,000 16,000 12,800 10,240 8,192
Plant and Machinery 35000 28,000 22,400 17,920 14,336 11,469
Total book values (i.e. net fixed assets) 0 76,800 64,000 53,120 43,776 35,661
Annual Depreciation
Furniture-10% straight line 3,200 3,200 3,200 3,200 3,200
Vehicles - 20% reducing balance 5,000 4,000 3,200 2,560 2,048
Plant & machinery-20% reducing
balance 7,000 5,600 4,480 3,584 2,867
total annual depreciation 15,200 12,800 10,880 9,344 8,115

8
PROJECT MANAGEMENT ECONOMICS AND FINANCE
Financial Ratios
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets) 0.43 0.38 0.36 0.30 0.26
Current Ratio (Current Assets / Current Liabilities) 4.60 5.16 5.45 5.17 5.35
Working Capital (Current Assets - Current Liabilities) 763,830 960,185 1,069,460 1,246,868 1,498,303
Assets-to-Equity Ratio (Total Assets / Owner's Equity) 1.76 1.60 1.57 1.42 1.35
Debt-to-Equity Ratio (Total Liabilities / Owner's
Equity) 0.76 0.60 0.57 0.42 0.35

9
PROJECT MANAGEMENT ECONOMICS AND FINANCENet Profit Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
0
20000
40000
60000
80000
100000
120000
80000 85000 90000 95000
110000
43300
55500
31200 35740
45052
36700 29500
58800 59260 64948
Highlights
Sales Gross Margin Net Profit
X-Axis Label Sales Gross
Margin Net Profit
Year 1 $780,000 $563,070 $216,930
Year 2 $897,000 $625,365 $271,635
Year 3 $1,031,550 $730,690 $300,860
Year 4 $1,186,283 $792,335 $393,948
Year 5 $1,364,225 $864,547 $499,677

10
PROJECT MANAGEMENT ECONOMICS AND FINANCESales Forecast
Sales Forecast
Year 1
Particulars January February March April May June July August September Octobe
r
Novembe
r
Decembe
r
Total Units
Sold
Sales 30000 40000 35000 30000 35000 45000 35000 50000 40000 45000 50000 45000 480000
Cost of sales 25000 30000 25000 25000 25000 25000 30000 30000 25000 35000 35000 20000 330000
Gross Profit 5000 10000 10000 5000 10000 20000 5000 20000 15000 10000 15000 25000 150000
Year 2
Particulars January February March April May June July August September Octobe
r
Novembe
r
Decembe
r
Total Units
Sold
Sales 30000 45000 35000 35000 45000 40000 30000 40000 40000 60000 75000 45000 520000
Cost of sales 25000 35000 30000 25000 35000 30000 25000 25000 25000 50000 35000 35000 375000
Gross Profit 5000 10000 5000 10000 10000 10000 5000 15000 15000 10000 40000 10000 145000
Year 3
Particulars January February March April May June July August September Octobe
r
Novembe
r
Decembe
r
Total Units
Sold
Sales 45000 40000 55000 50000 75000 45000 50000 60000 55000 50000 50000 50000 625000
Cost of sales 15000 20000 45000 40000 60000 35000 45000 40000 40000 40000 40000 40000 460000
Gross Profit 30000 20000 10000 10000 15000 10000 5000 20000 15000 10000 10000 10000 165000

11
PROJECT MANAGEMENT ECONOMICS AND FINANCE
Year 4
Particulars January February March April May June July August September Octobe
r
Novembe
r
Decembe
r Mar-11
Sales 50000 50000 65000 60000 55000 55000 65000 60000 50000 50000 50000 50000 660000
Cost of sales 30000 35000 40000 45000 50000 25000 45000 30000 40000 40000 40000 40000 460000
Gross Profit 20000 15000 25000 15000 5000 30000 20000 30000 10000 10000 10000 10000 200000
Year 5
Particulars January February March April May June July August September Octobe
r
Novembe
r
Decembe
r Jan-07
Sales 55000 60000 65000 55000 65000 45000 75000 60000 65000 50000 55000 50000 700000
Cost of sales 45000 40000 50000 45000 55000 30000 55000 30000 35000 35000 25000 35000 480000
Gross Profit 10000 20000 15000 10000 10000 15000 20000 30000 30000 15000 30000 15000 220000

0
PROJECT MANAGEMENT ECONOMICS AND FINANCE
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