Question

New Startup Restaurant

Could you please prepare:

-Pro forma balance sheet at the end of first year

-Pro forma Income statement for first year

-pro forma statement of cash flow for first year

with the informaton below

The capital needs of my start-up business for the first year:

Facility (building & land): $500,000

Appliances (freezers, stoves, etc.): $150,000

Furnishings (chairs, tables, décor, etc.): $75,000

Plates, silverware, and glasses: $20,000

Subtotal: $745,000

Working capital finances for first year

Salaries: $400,000

Utilities: $25,000

Groceries/Supplies: $50,000

Advertising: $15,000

Subtotal: $490,000

Adding up both subtotals, my restaurant will need a grand total of $1,235,000 to cover the first year’s business.

Please Describe how the figures in the pro forma financial statements were derived and why you think that they are accurate.

Please wrap up by preparing an explanation discussing how you arrived at the various figures.  

Thank you, I appreciate

Answer 1

Income Statement
Sales
Sales	660,000.00
Other Income
Total	660,000.00
Expenses
Payroll	400,000.00
Marketing & Other Expenses	15,000.00
Depreciation	74,500.00
Direct Exp - Groceries/Supplies	50,000.00
Utilities	25,000.00
Insurance	-
Rent	-
Payroll Taxes	-
Other	-
Total Operating Expenses	564,500.00
Profit Before Interest & Taxes
EBITDA	95,500.00
Interest Expense	30,000.00
Taxes Incurred	6,550.00
Net Profit	58,950.00
Balance Sheet
Assets
Current Assets
Cash	688,450.00
Inventory
Other Current Assets
Total Current Assets	688,450.00
Long-term Assets	745,000.00
Long-term Assets
Accumulated Depreciation	74,500.00
Total Long-term Assets	670,500.00
Total Assets	1,358,950.00
Liabilities and Capital
Current Liabilities	300,000.00
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital	1,000,000.00
Retained Earnings
Earnings	58,950.00
Total Capital	1,058,950.00
Total Liabilities and Capital	1,358,950.00
Cash Flow Statement
Cash Received
Cash from Operations
Cash Sales	660,000.00
Subtotal Cash from Operations
Additional Cash Received
Depreciation	74,500.00
New Current Borrowing	300,000.00
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received	1,000,000.00
Subtotal Cash Received	2,034,500.00
Expenditures
Expenditures from Operations	601,050.00
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Interest
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets	745,000.00
Dividends
Subtotal Cash Spent	1,346,050.00
Net Cash Flow	688,450.00
Cash Balance	688,450.00

Assumptions:

1. Sales is assumed on the basis of Expenses provided.

2. 10% Depreciation is taken on cost of Assets

3. Capital & Loan is assumed on the basis of requirement

4. Interest @10% on loan amount is taken.

5. 10% taxes are taken on net proift (net before tax)