H CASHFLOW STATEMENT Assu YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 3 4 5 Net Income 6 Add back depreciation 7 Changes in working capital 8 Accounts Receivable 9 Prepaid Expenses 10 Accounts Payable 11 Customer Deposits 12 Interest payable 13 Taxes Payable 14 Cash flows from operating activities 15 16 17 Amount paid for equipment 18 Amount paid for furniture & fixtures 19 Cash flow from investing activities 20 21 22 Proceeds from bank loan 23 Proceeds from issuing capital 24 Repayment of bank loan 25 Cash flow from financing activities 26 27 Net increase (decrease) in cash 28 Add: Beginning cash balance 29 Ending Cash balance Alle listed here should be used is your first Janelle has decided to start herning business Ev) in the poeming year. She lines that she has not the presting in the absen As part of here planelle masinate for another The Beatles escene Semen Illance Sheet See Accounts Receivate Prepaid in Equipement Asya First your expected to be down for the Tasse office equipes that she will purchase for $10.000 show the beginning of The effect will have of years the furniture des as well as the will be decide what is more value for alle, HINTHA Accented Deprecated As leis sing for a bank to headed en Day of Your I. The estimated interest in the las aning in Year 2 new dech year and any of the following year. Amin pallon the principal balance willing The last two they wanted within the few year trend the wing of the other This 50,000 of capital is het winning hakbalance of You - Schedule of speed year-end hals of scients Year! Year 2 Yes Year 4 Years M 10.000 12.000 10.000 Roche Act 2.000 4.000 5.000 6.000 Payable 9,000 2.000 3,000 4.000 5.000 and is expected Advertising Expos projecte Reven Cost of Sales Advertising . quipe Rental . Was + Office Hot . Surting is Year het die meer . Je plans toward by hiring people to work the events with her Bach will be paid end is sport werk meth Anar Yew plans to be adida pole. At this papers will be 100 per event is expected to work Officere med to be a 300 per . Barthed ei pembe 5300 per The office space nelle plans to read. She plans to purchase 3.000 worth of funds at the begin or Year 1. The future and we will have a weefs years Janell will need to be computers and other the end of Year 2. Janelle will purchase inserce policy to help cover the basis. The policy has a term of 3 years as coverage arts at the beginning of Year. The policy costs $12.000 . During Your Lonelle plans to peally loves 10,000 of additional capital in the business - Incos Tev Adhoma fastructions You the given plattached to this agent The the files are intel Where applicable for the price from her labs. Also, use from within the cell be applicable to my delect points for wing cell references and The . . Case Overview Janelle Higgins has decided to start her own event planning business (JH Events) in the upcoming year. She believes that she has an innovative business model and is seeking a business loan. Therefore, Janelle is in the process of putting together a business plan. As part of her business plan, Janelle must include forecasted financial statements for the first 5 years. The forecasted financial statements to be included are: Income Statement, Balance Sheet, and Statement of Cash Flows. Janelle must also include a set of calculated ratios along with an overall assessment on the projected health of the company. Forecasting Assumptions First year sales are projected to be $150,000 and grow 3% for the next two years and 5% in year 4 and 5. Cost of sales are projected to be 45% of revenue in the first year and is expected to grow at the same rate as sales. Advertising expenses are projected to be 4% of each year's projected revenue. Janelle will need to rent equipment for the events she puts on. She has an agreement with a rental company for a flat rate of $500 per month and is sufficient to cover all of her estimated events. Starting in Year 3, she expects to be able to handle more events and the rental rate will increase to $750 per month. Janelle plans to start off by hiring 2 people to work the events with her. Each person will be paid $100 per event and is expected to work 4 events per month. After Year 3, Janelle plans to hire 2 additional people. (At this point, each person will be paid $100 per event and is expected to work events per month). Office rent is estimated to be a flat rate of $1,200 per month. Utilities for the rented office space are estimated to be $300 per month. The office space Janelle plans to rent is unfurnished. She plans to purchase $15,000 worth of furniture and fixtures at the beginning of Year 1. The furniture and fixtures will have a useful life of 15 years. Janelle will also need to buy some computers and other . . office equipment that she will purchase for $10,000 also at the beginning of Year 1. The office equipment will have a useful life of 5 years. Both the furniture and fixtures as well as the equipment will be depreciated on a straight-line basis (Assume zero salvage value for calculations). HINT: Fixed Assets - Accumulated Depreciation = 'Net' Fixed Assets Janelle is asking for a 3-year bank loan for $60,000 to be funded on Dayl of Year 1. The estimated interest on the loan is 3% (assume simple interest). She will pay the loan back in $20,000 installments starting in Year 2. Interest is due at the end of each year and paid in January of the following year. (Assume interest is. paid on the principal balance still outstanding at year-end). The tax rate for JH Events is 35%. Taxes for the year just ended are paid in the first quarter of the following year. Janelle will invest $30,000 of her own money and from family and friends, before the beginning of the year, to start the business. This $30,000 investment of capital is also the beginning bank balance of Year 1. Schedule of expected year-end balances of selected accounts: Year 1 10,000 Year 2 12,000 Year 3 8,000 Year 4 6,000 Year 5 10,000 2,000 4,000 Accounts Receivable Accounts Payable Customer Deposits 5,000 6,000 9,000 1,500 2,000 3,000 4,000 5,000 . At the end of Year 2, Janelle will purchase an insurance policy to help cover the business. The policy has a term of 3 years and coverage starts at the beginning of Year 3. The policy costs $12,000. During Year 3, Janelle plans to personally invest $10,000 of additional capital into the business. . H CASHFLOW STATEMENT Assu YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 3 4 5 Net Income 6 Add back depreciation 7 Changes in working capital 8 Accounts Receivable 9 Prepaid Expenses 10 Accounts Payable 11 Customer Deposits 12 Interest payable 13 Taxes Payable 14 Cash flows from operating activities 15 16 17 Amount paid for equipment 18 Amount paid for furniture & fixtures 19 Cash flow from investing activities 20 21 22 Proceeds from bank loan 23 Proceeds from issuing capital 24 Repayment of bank loan 25 Cash flow from financing activities 26 27 Net increase (decrease) in cash 28 Add: Beginning cash balance 29 Ending Cash balance Alle listed here should be used is your first Janelle has decided to start herning business Ev) in the poeming year. She lines that she has not the presting in the absen As part of here planelle masinate for another The Beatles escene Semen Illance Sheet See Accounts Receivate Prepaid in Equipement Asya First your expected to be down for the Tasse office equipes that she will purchase for $10.000 show the beginning of The effect will have of years the furniture des as well as the will be decide what is more value for alle, HINTHA Accented Deprecated As leis sing for a bank to headed en Day of Your I. The estimated interest in the las aning in Year 2 new dech year and any of the following year. Amin pallon the principal balance willing The last two they wanted within the few year trend the wing of the other This 50,000 of capital is het winning hakbalance of You - Schedule of speed year-end hals of scients Year! Year 2 Yes Year 4 Years M 10.000 12.000 10.000 Roche Act 2.000 4.000 5.000 6.000 Payable 9,000 2.000 3,000 4.000 5.000 and is expected Advertising Expos projecte Reven Cost of Sales Advertising . quipe Rental . Was + Office Hot . Surting is Year het die meer . Je plans toward by hiring people to work the events with her Bach will be paid end is sport werk meth Anar Yew plans to be adida pole. At this papers will be 100 per event is expected to work Officere med to be a 300 per . Barthed ei pembe 5300 per The office space nelle plans to read. She plans to purchase 3.000 worth of funds at the begin or Year 1. The future and we will have a weefs years Janell will need to be computers and other the end of Year 2. Janelle will purchase inserce policy to help cover the basis. The policy has a term of 3 years as coverage arts at the beginning of Year. The policy costs $12.000 . During Your Lonelle plans to peally loves 10,000 of additional capital in the business - Incos Tev Adhoma fastructions You the given plattached to this agent The the files are intel Where applicable for the price from her labs. Also, use from within the cell be applicable to my delect points for wing cell references and The . . Case Overview Janelle Higgins has decided to start her own event planning business (JH Events) in the upcoming year. She believes that she has an innovative business model and is seeking a business loan. Therefore, Janelle is in the process of putting together a business plan. As part of her business plan, Janelle must include forecasted financial statements for the first 5 years. The forecasted financial statements to be included are: Income Statement, Balance Sheet, and Statement of Cash Flows. Janelle must also include a set of calculated ratios along with an overall assessment on the projected health of the company. Forecasting Assumptions First year sales are projected to be $150,000 and grow 3% for the next two years and 5% in year 4 and 5. Cost of sales are projected to be 45% of revenue in the first year and is expected to grow at the same rate as sales. Advertising expenses are projected to be 4% of each year's projected revenue. Janelle will need to rent equipment for the events she puts on. She has an agreement with a rental company for a flat rate of $500 per month and is sufficient to cover all of her estimated events. Starting in Year 3, she expects to be able to handle more events and the rental rate will increase to $750 per month. Janelle plans to start off by hiring 2 people to work the events with her. Each person will be paid $100 per event and is expected to work 4 events per month. After Year 3, Janelle plans to hire 2 additional people. (At this point, each person will be paid $100 per event and is expected to work events per month). Office rent is estimated to be a flat rate of $1,200 per month. Utilities for the rented office space are estimated to be $300 per month. The office space Janelle plans to rent is unfurnished. She plans to purchase $15,000 worth of furniture and fixtures at the beginning of Year 1. The furniture and fixtures will have a useful life of 15 years. Janelle will also need to buy some computers and other . . office equipment that she will purchase for $10,000 also at the beginning of Year 1. The office equipment will have a useful life of 5 years. Both the furniture and fixtures as well as the equipment will be depreciated on a straight-line basis (Assume zero salvage value for calculations). HINT: Fixed Assets - Accumulated Depreciation = 'Net' Fixed Assets Janelle is asking for a 3-year bank loan for $60,000 to be funded on Dayl of Year 1. The estimated interest on the loan is 3% (assume simple interest). She will pay the loan back in $20,000 installments starting in Year 2. Interest is due at the end of each year and paid in January of the following year. (Assume interest is. paid on the principal balance still outstanding at year-end). The tax rate for JH Events is 35%. Taxes for the year just ended are paid in the first quarter of the following year. Janelle will invest $30,000 of her own money and from family and friends, before the beginning of the year, to start the business. This $30,000 investment of capital is also the beginning bank balance of Year 1. Schedule of expected year-end balances of selected accounts: Year 1 10,000 Year 2 12,000 Year 3 8,000 Year 4 6,000 Year 5 10,000 2,000 4,000 Accounts Receivable Accounts Payable Customer Deposits 5,000 6,000 9,000 1,500 2,000 3,000 4,000 5,000 . At the end of Year 2, Janelle will purchase an insurance policy to help cover the business. The policy has a term of 3 years and coverage starts at the beginning of Year 3. The policy costs $12,000. During Year 3, Janelle plans to personally invest $10,000 of additional capital into the business