Financial Projections: Descriptions


Yummy’s Financial Projections: Descriptions






Financial Projections: 5 Year Profit Projection

In the next five years, sales for yummy are expected to increase gradually from $1,500,000 in 2021 to $2,120,965 in 2025, while gross profit will follow the same growth trend. Operating expenses will be averagely at the same level with an increase and decrease at the same pace. However, in 2022, the total expenses are predicted to surpass other prior and preceding years. In 2022 the total expenses will be $552,875 due to a massive salary increase (office and overhead). Salary might increase due to inflation, and interest rates rise caused by economic downtowns and recovery injection from COVID-19 pandemic. Overall, the net operating income will increase gradually but will be higher in 2024 than in other years. The five-year financial projection for Yummy holds a lot of expansion and feasibility hopes. 

Balance Sheet (projected)

In the balance sheet, Yummy’s current assets, fixed assets, other assets, and liabilities and equities will increase by more than 80% from 2021 to 2025. The increase is related to Yummy continuous acquisition of physical and liquid assets, efficient repayment of long term and short term debts, reduction of debts, and increase in revenue and net profit as the company hosts more investor and expand internationally by 2025. 

Cash Flow Statement (12 months)

The cash flow statement for 12 months represents an illustration of how the money will flow in and out with different expenses and inventory costs. In the cash flow, cash sales will record a continuous growth trend from the initial startup date to the end of 2025. There are numerous fluctuations in the cash flow for cash paid out since the cash flow statement represents monthly transactions, which are harder to use when making predictions than quarterly cash flow statements. However, the monthly presentation is relevant so that financial and investor can study the forested circulation of liquid assets in and out of the organization. This will aid them in decision making amid investing since monthly statements show a more precise and convincing picture. In conclusion, the financial projection shows both negative a positive financial side of Yummy in the next five years. However, the positive side of the financial projections is very feasible.