On the page below you can see the descriptions for the finance sheets where needed. You can see the whole spreadsheet in the excel file that includes the S&OP too.

Finance & Accounting

Sales budget

The sales budget represents our assumed sales volumes starting from quarter two, as no sales are made in the first quarter.

We assumed the sales volumes by looking at the dutch market sales (50000 sales per quarter). We assume, that after the move to the UK, our sales will be around 30000 in the first quarter, as the phones will not be as popular among the British users.

The sales then should start increasing gradually every quarter and peak in the winter holiday season, as everyone is buying gifts for themselves and others, which should result in a surge of sales, which can be seen in the sales assumption of Q4 each year.

In the three tables below the sales budget, we can see the monthly cash inflow, with the delayed payments included. We assumed that 40% of our sales would be bought with the option to pay later, this allows us to the accounts receivable, that have not been paid at the end of the year.

Production budget

In the production budget, we can see three tables that represent the number of units sold and produced, regarding the sales of previous quarters.

For the desired ending inventory, we chose to have a 25% safety stock, which means that we want to have a 25% of overhead production, to cover higher sales volumes than expected and prevent stockouts which result in losses of profits, which is never good for a company.

The beginning inventory for each quarter is the ending inventory from the previous quarter.

The production budget for repair parts represents the number of repair kits (Whole phones disassembled in parts that cost the same as the manufacturing price for each phone).

We predict that 5% of phones sold might break, so we will need to have (0.05*Phone sales) ready in parts to be repaired.

Cash budget

In the cash budget, you can see what the cash inflow of our company was, together with the cash spent for purchasing the phones from China and all the SG&A expenses that were discussed in the SG&A sheet.

Thanks to this sheet we can see our ending cash balance for each quarter.

Income statement

In the Income statement, you can see the total income and expenditures of the company. The red numbers represent a subtraction, while the black represents an increase.

The corporate income tax rate in the UK is 19%, which can be seen represented in the Operating Expenses.

Cash flow statement

In the cash flow statement, you can see where the companies cash flows. You can see the depreciation added back as it is not a cash transaction.

You can see the 6000000 issued in shares, which helps us to maintain the expansion to the UK.

As mentioned in the sales budget, a part of the income will be received after 3 months from the original sale and is represented as Accounts receivable.

Balance sheet

In the balance sheet, all of our short and long-term assets can be seen. At the start, we calculated that we will need 12 million to successfully start the operation in the UK. We issued 6 million in common stock, which was described in the Cash flow statement, and the other 6 million were retained earnings that you can see in the opening balance.

The depreciation is the amount that our equipment-laptops depreciate annually, which is 33% each year.