M4 & M5 Project Corrections

Module4projectTemplate.xls

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Breakeven Analysis

Breakeven Analysis			You can use this template or the one I provided in the discussion area for your project
Enter your company name here
Cost Description	Fixed Costs ($)	Variable Costs (%)
Variable Costs
Cost of Goods Sold		0.0%
Inventory		0.0%
Raw Materials		0.0%
Direct Labor (Includes Payroll Taxes)		0.0%
Fixed Costs
Salaries (includes payroll taxes)	$ -
Supplies	$ -
Repairs & maintenance	$ -
Advertising	$ -
Car, delivery and travel	$ -
Accounting and legal	$ -
Rent	$ -
Telephone	$ -
Utilities	$ -
Insurance	$ -
Taxes (Real estate, etc.)	$ -
Interest	$ -
Depreciation	$ -
Other (specify)	$ -
Other (specify)	$ -
Miscellaneous expenses	$ -
Principal portion of debt payment	$ -
Owner's draw	$ -
Total Fixed Costs	$ -
Total Variable Costs		0.0
Breakeven Sales level =	0
Source: http://www.score.org/downloads/Break-Even%20Analysis1.xls

Total will be calculated automatically.

Breakeven Sales Level = Total Fixed Expenses/ ((100-Total Variable Exp%)/100)

Instructions Note: You may want to print this information to use as reference later. To delete these instructions, click the border of this text box and then press the DELETE key. Using figures from your Profit and Loss Projection, enter expected annual fixed and variable costs. Fixed costs are those that remain the same regardless of your sales volume. They are expressed in dollars. Rent, insurance and real estate taxes, for example, are usually fixed. Variable costs are those which change as your volume of business changes. They are expressed as a percent of sales. Inventory, raw materials and direct production labor, for example, are usually variable costs. Under the variable expenses column, use whole numbers as a percentage, not decimal numbers. For example, use 45%, rather than .45%. For your business, each category of expense may either be fixed or variable, but not both.

Suggestions Note: You may want to print this information to use as reference later. To delete these instructions, click the border of this text box and then press the DELETE key. The categories of expense shown above are just suggestions. Change the labels to reflect your own accounting systems and type of business. Breakeven is a "big picture" kind of tool; we recommend that you combine expense categories to stay within the 22 lines that this template allows. One of the best uses of breakeven analysis is to play with various scenarios. For instance, if you add another person to the payroll, how many extra sales dollars will be needed to recover the extra salary expense? If you borrow, how much will be needed to cover the increased principal and interest payments? Many owners, especially retailers, like to calculate a daily breakdown. This gives everyone a target to shoot at for the day.

Project Capital Budget and BE

Recommended Capital Budgeting Template Used in MS6010 Course Project. You can use another template if desired.
Enter a complete set of financial statements for your company in the other tab.
For this tab, complete only the yellow boxes; everything else is done by formula. I have added several rows below template for you to complete payback calculations, if desired.
Use this template to provide the capital budgeting information on your course project. Change titles to work with your project as needed.
Some items will not apply to your project and can be left blank. Template assumes equipment purchase. If you have purchases other than equipment
you will need to adjust the depreciation rates to achieve correct depreciation
Part 1. Key Input Data: For this project you get to make up reasonable numbers for the project idea you will recommend for the company you choose
Initial Investment Dollars			Enter a reasonable price of recommended initial investment
$ Increase in current assets			How much will your current assets increase as a result of this project
$ Increase in current liabilities			How much will your current liabilities increase as a result of this project							Using some of the data from the left, what is the break even in units?
Unit sales			What are you unit sales each year								Enter in your formula here so that the correct B/E units are shown.
$ Sales price per unit			How much will you sell each item for?								What is the B/E in dollars?
% Variable cost per unit			What is the variable cost per each item sold as a percentage?
$ Variable cost per unit		$ - 0
$ Fixed costs			What are the fixed costs for this project?
Market value$ of equipment in Y5			Enter in a reasonable market value in dollars at end of project
Tax rate Percentage			Use the precentage as specified
WACC or Discount Percentage			Use the precentage as specified
Part 2. Depreciation Schedule if applicable. If you have equipment, there is always depreciation			Years					Accum'd
Year		Initial Cost	1	2	3	4	5	Deprn
% Equipment Deprn Rate			0%	0%	0%	0%	0%		Enter in Depreciation %- straight line
Equipment Deprn, Dollars			$0	$0	$0	$0	$0	$0
Ending Bk Val: Cost - Accum'd Deprn							$0
Part 3. Net Salvage Values							Equipment
Estimated Market Value in Year 5							$0
Book Value in Y5							0
Expected Gain or Loss							0
Taxes paid on gain at tax rate percentage							0
Net cash flow from salvage							$0
Part 4. Projected Net Cash Flows (Time line of annual cash flows)
	Years, 1-4 basis		0	1	2	3	4	5
	Years, actual year basis		20xx	20xx	20xx	20xx	20xx	20xx
Investment Outlays at Time Zero:
Equipment			0
Increase in Net Operating WC			0
Operating Cash Flows over the Project's Life:
Units sold				0	0	0	0	0
Sales price				$0.00	$0.00	$0.00	$0.00	$0.00
Sales revenue				$0	$0	$0	$0	$0
Variable costs				0	0	0	0	0
Fixed operating costs				0	0	0	0	0
Depreciation (equipment)				0	0	0	0	0
Oper. income before taxes (EBIT)				0	0	0	0	0
Taxes on operating income				0	0	0	0	0
Net Operating Profit After Taxes (NOPAT)				0	0	0	0	0
Add back depreciation				0	0	0	0	0
Operating cash flow				$0	$0	$0	$0	$0
Terminal Year Cash Flows:
Return of net operating working capital								0
After-tax salvage value								0
Total termination cash flows								$0
Net Cash Flow (Time line of cash flows)			$0	$0	$0	$0	$0	$0
Part 5. Key Output: Appraisal of the Proposed Project
Net Present Value			Create a formula using the NPV function as specified
IRR			Create a formula using the IRR function as specified
MIRR			Bonus: Create a formula using the MIRR function as specified
Payback			Bonus: How would you calculate payback using Excel?
Enter in any company information to explain project as required by instructions. How will this project help your company's bottom line?

Doug Letsch: Enter your initial cost of equipment here

Doug Letsch: Hit the ? Or help key in the upper right corner of Excel to see how to use NPV function =NPV()

Doug Letsch: Hit the ? Or help key in the upper right corner of Excel to see how to use IRR function =IRR()

Doug Letsch: Hit the ? Or help key in the upper right corner of Excel to see how to use MIRR function =MIRR()

Explain Payback here: make calculations below

Copy of Company Fin Statements

Please copy and paste a copy of your public company's financial statements for the last 3 years.

Include a Balance Sheet, Income Statement, and Statement of Cash flow