Business Finance Homework Help

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Create a Cash Flow Forecast on Excel using the following assumptions:

• Forecast duration: Years 0 through 5, then Exit
• Unit Sales: Sell 2000 units your first year and increase 30% per year
• Price: $100/unit first year and increase 5% per year
• COGS: Calculate based on a 75% Gross Profit Margin
• FIXED COSTS: to complete the Operating Expense section, break it into two lines: Payroll and Other
  Payroll: Start with 2 employees in year 0 paid $50,000 each; add 1 employee with every additional year, at same pay
  Other Operating Expenses: $75,000 per year starting year 0, no change over the 5 years
• CAPEX: $30,000 every other year starting year 0. Assume you pay cash, no credit
• WORKING CAPITAL: break this section into into 1 line for each of the 4 components
  Increase in Accounts Receivable: Based on giving customers 60 days of credit
  Increase in Inventory: Based on keeping 3 months of Inventory on hand
  Increase in Accounts Payable: Based on your vendors giving you 30 days of credit
  Increase in Accrued Payroll: Based on paying your employees every other week
• EXIT: sell company for 5x Year 5 EBITDA