7-2 Project Submission

BUS 400 Module Six Assignment Template 24-Month Pro Forma

Netflix.com

	Previous Fiscal Year	24-Month Projections
Sales	$ 29,697,844	$ 32,667,628.40
Cost of goods sold	$ 17,332,683	$ 19,065,951.30
Gross profit	$ 12,365,161	$ 13,601,677.10
Selling expenses	$ -	$ 10,000
Administrative expenses	$ 3, 896,767	$ 4,286,443.70
Total operating expense	$ 23, 503.34	$ 25,853.67
Income from operations	$ 6,194,509	$ 6,813,959.90
Other income	$ -	$ 15,000
Income before tax and interest	$ 6,194,509	$ 6,813,959.90
Other expense (interest)	$ 765,620	$ 842,182.00
Income before income tax	$ 5,840,103	$ 6,424,113.30
Income tax expense	$ 723,875	$ 796,262.50
Net income	$ 5,116,228	$ 5,627,850.80

Explanation of Assumptions

In the next 24 months, the company will introduce the weekend subscription, which will generate extra income. Therefore, I have assumed that the company will increase its revenue by 10 % in the period. Also, other expenses will increase by 10 %. Also, in the last fiscal year, the company had no sales or other expenses. Thus, I assume that through the introduction of the weekend subscription, the company will have to incur additional costs in the next 24 months.

The weekend subscription is independent of other subscriptions that the company is offering. Therefore, another assumption I made is that the subscribers will not cease subscribing to their monthly subscriptions. The standard subscription will continue generating revenue for the company in that period. Lastly, I assume the normal operations of the company will continue as before, and nothing will come that will hinder it from generating income from film sales.

References

Netflix. (2021). Netflex 2021 fiscal year. UNITED STATES SECURITIES AND EXCHANGE COMMISSION. https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf