Tom N Mauer. Worksheet Templates. May 15th , 2018.
Dave is a financial analyst at Extra Smart Partners (ESP), a civil engineering firm in the City of Metropolis. Daves job is to work with the civil engineers and project managers to analyze the income and costs of various government-funded infrastructure projects to support the proposal and bidding process.
In the last step of his cash flow worksheet, Dave sums the expenses and revenues for each year and all 5 scenarios. He charts these out in graphs with a horizontal line for minimum acceptable return. ESP has access to public project funding at a 6% interest rate, to which he adds 3% for additional risk factors, for a 9% discount rate. Finally, he discounts the net returns per year under all scenarios at 9%, and calculates an NPV for each revenue path. This gives him 5 project values at 5 different revenue assumptions based on his variable markup. At least 3 of these NPVs must exceed the companys 12% hurdle rate in his cash flow worksheet for the bid to viable.
When you write out your budgeted start-up and monthly costs, also include a column that will show the "actual" expenditures. This way, you know exactly where your money is going, and where you need to make adjustments.
In addition to expenses, your business budget should include income. You can project what you expect your monthly income to be on your budget worksheet. If your company revenue goes up, this of course gives you a larger budget to work with. When you have the numbers documented on paper, it is easier to plan and adjust your business operations accordingly.
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