Report name: Sample Forecast
How the Forecast Assets and Liabilities Analysis is Calculated
Cash and cash convertible assets are the source of liquidity. Depreciated fixed assets represent residual useful working life, not sale value.
How the Forecast Assets and Liabilities Analysis is Calculated
Cash and cash convertible assets are the source of liquidity. Depreciated fixed assets represent residual useful working life, not sale value.
| forecast for year beginning the 1st. | May 2017 | May 2018 | May 2019 |
| Fixed assets | |||
| Main Pool Assets | 28,873 | 34,871 | 42,958 |
| Company Cars | 27,751 | 19,210 | 34,832 |
| Total Fixed Assets | 56,624 | 54,081 | 77,791 |
| Current Assets | |||
| Stock / Inventory | 125,000 | 150,000 | 170,000 |
| Sales Ledger | 86,092 | 93,178 | 146,549 |
| Dr / Cr Card Balance | 0 | 0 | 0 |
| Prepaid Letters of Credit | 0 | 0 | 0 |
| Vat Refundable | 0 | 0 | 0 |
| Cash at Bank | 0 | 27,770 | 216,366 |
| Factoring CR. Balance | 0 | 0 | 0 |
Asset Finance Interest in Suspense | 6,583 | 4,255 | 6,208 |
| Loan Interest in Suspense | 0 | 0 | 0 |
| Total Current Assets | 217,675 | 275,203 | 539,122 |
| Current Liabilities | |||
| Trade Creditors | 60,821 | 60,195 | 76,752 |
| Sundry Creditors | 13,428 | 17,381 | 21,374 |
Vat Payable | 5,731 | 7,899 | 10,606 |
| Hire Purchase | 21,350 | 17,865 | 21,333 |
| Loans | 0 | 0 | 0 |
| Bank Overdraft | 35,439 | 0 | 0 |
| Factoring Dr. Balance | 0 | 0 | 0 |
| Corporation tax Due | 143 | 158 | 455 |
Asset Finance Interest in Suspense | 4,270 | 3,573 | 4,267 |
| Loan Interest in Suspense | 0 | 0 | 0 |
Dividends Payable | 0 | 0 | 0 |
| Total Current Liabilities | 141,183 | 107,070 | 134,787 |
| Long Term Liabilities | |||
Asset Financing | 11,565 | 3,413 | 9,707 |
| Loan | 0 | 0 | 0 |
Asset Finance Interest in Suspense | 2,313 | 683 | 1,941 |
| Loan Interest in Suspense | 0 | 0 | 0 |
| Total Long Term Liabilities | 13,878 | 4,095 | 11,648 |
Net Current Assets (Working Capital) | 76,492 | 168,133 | 404,336 |
| Net Assets | 119,238 | 218,118 | 470,478 |
Also “non-current assets” fixtures and fittings, equipment, machinery, vans, trucks and property are typical examples of fixed assets.
Their role is as to support core operating activity and are not intended for resale in the normal course of business. Fixed assets are expected to have a useful working life of more than one year.
Charged to profit annually, the purpose of depreciation is to record the value of a fixed asset’s residual working life; not its fair value.
A fixed asset such as a computer with a perceived useful life of five years will be depreciated at 20% p.a. while plant and machinery with a 10 year useful life will be depreciated at 10% p.a.
Depreciation is always calculated from the asset cost excluding VAT.
While depreciation is a legitimate charge to profit and loss, it is not tax deductible.
New fixed assets are instead entitled to 100% tax relief in the year of acquisition up to a total of £1 million. This is known as AIA (annual investment allowance). That does not however apply to property, or company cars.
Accounts receivable, and stock for resale, reliably expected to be turned into cash within no more than a year are the principal current assets.
Net current assets are current assets to be turned into cash within twelve months less all debt payable within the same period. This is perhaps the most important number in any balance sheet forecast as it describes the anticipated ability of a business to pay its way going forward.
For that reason, net assets in deficit would call for re-examining your business plan in particular your own forecasts for gross profit margin, overheads and investment in fixed assets year-end stock and lastly, loans.
This can quickly and easily be done using Figurewizard's Interactive What If Calculator.
Debt payable within a year represents short-term liabilities, more than a year; long-term liabilities.
Interest debt, the value of which is incorporated from the start of a contract such as a hire-purchase agreement will be included. Interest arising from loans; for example a bank overdraft which is to be levied monthly is not included. That is only ever charged “as and when it arises”.
All Assets less all liabilities defines net assets. This is the crucial element in any balance sheet forecast as liabilities that are greater than assets describes insolvency.