The financial forecasts and returns
One of the major elements of the success of Threadlaunch Venture depends on effective and accurate financial forecasts as well as returns. This is because financial forecasting will be vital in estimation of the future performance of our venture in relation to earnings, sales, and costs. In addition, this financial forecasting will be vital for financial planning inclusive of assessment of the future financial needs for production and human resource planning (De Franco et al., p. 896). Financial forecasting would be ideal for procurement of more financial resources towards expansion of our operations as well as diversification and adoption of lean manufacturing and production mechanisms. Moreover, financial forecasts will enable our venture to develop a valuable reputation and image among shareholders and stakeholders in valuation of the company and its securities.
Sales Data
Year Sales (Millions)
FY 2013 .85
FY 2014 1.65
FY 2015 2.45
FY 2016 2.60
FY 2017 2.75
FY 2018 3.15
Sales Growth Graph
The graph above is essential undersatding the growth of the sales across the period of six years through to 2018. This level of projection would be ideal for the organization to plan effectively and effciently in the market and industry of operation. In order to achivee these goals, our venture must focus on execute of extensive and substantive advertisment of the products and our service at the disposal of the consumers. In addition, there is need to enahnce diversification in our operations in the course of the five years. This is vital towards maintenace of relevance in the market as well as industry of operation.
Monthly Financial projections
Monthly Projections Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Revenues 0 0 300 600 1300 2600
Cost of Goods Sold 0 0 100 300 600 1300
Gross Profit 0 0 200 300 700 1300
Sales & Marketing Expense 400 500 700 900 1100 1200
General & Admin Expense 400 700 900 1100 1300 1600
Operating Income -800 -1200 -1400 -1700 -1700 -1500
Depreciation Expense 100 100 100 100 100 100
Interest Expense 100 100 100 100 200 200
Taxes 0 0 0 0 0 0
Net Income (Loss) -1000 -1400 -1600 -1900 -2000 -1800
Our venture focuses on the achievement of constant return to scale with the aim of gaining competitive advantage in the market and industry of operation. This is an indication that input or factors of production should have equal value in relation to output. The achievement of constant return to scale and quality advertisement process would be critical towards the achievement of financial goals and objectives of our venture.
Overhead Budget
Indirect Labor Costs $13,000
Utilities $6,000
Depreciation $4,000
Insurance and Taxes $5,000
Maintenance $2,000
Total Overhead Costs $30,000
Our venture will focus on the promotion of effectiveness and efficiency in the service and product delivery in the market and industry of operation. This will be reflected in the lean budget overhead and marketing mechanism aiming to reduce the cost of operations while maximizing opportunities and profits during the fiscal year. In addition, our venture will also invest adequately on the research and development mechanisms aiming to promote efficiency in marketing and delivery of products and services. The main objective of this financial forecasting is the achievement of sustainability as well as competitive edge among our competitors.
Work Cited
De Franco, Gus, S.P. Kothari, and Rodrigo S. Verdi. “The Benefits Of Financial Statement Comparability.” Journal Of Accounting Research 49.4 (2011): 895-931
