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Tool 1: Sample Balance Sheet

If you have a real business idea in mind, try filling out this form (possibly with some small adaptations) for your proposed product or service. What conclusions do you draw?

  Current Year Forecasted periods
Assets $ $
Current Assets    
Cash (Note)    
Inventory (Note)    
Prepaid Expenses    
Total current assets    
Property equipment (Note)    
Office furniture and fixtures    
Leasehold improvements    
Less - accumulated depreciation and amortization    
Other assets:    
Organization costs, net of accumulated amortization (Note)    
Liabilities and stockholders' equity    
Current liabilities    
Current portion of long-term obligations    
Accounts payable (Note)    
Accrued expenses    
Federal and state income taxes payable    
Total current liabilities    
Long term obligations (Note)    
Stockholders' equity    
Common stock, no par value    
Authorized - shares    
Issued and outstanding - shares    
Retained earnings (accumulated deficit)    

A business plan should include at a minimum the current year's financial results and a forecasted financial statement which includes significant forecast assumptions. The forecasted financial statements should be presented for a minimum of three years with five years preferred. The forecast should be presented monthly for year one, quarterly or monthly for year two, and annually for all subsequent forecasted periods.

Practical note: Total liabilities and stockholders' equity should equal total assets.

Tool 2: Sample forecasted statements of income and retained earnings

  Current Year Forecasted periods
Revenue (Note) $ $
Cost of sales (Note)    
Salaries and wages    
Payroll taxes and fringe benefits    
Product costs    
Rent expense    
Equipment lease    
Depreciation and amortization    
Total operating expenses    
Gross margin (deficit)    
Selling, general, and administrative expenses (Note):    
Salaries and wages    
Payroll taxes and fringe benefits    
Depreciation and amortization    
Total selling, general, and administrative    
Income from operations    
Other (income) expenses    
Interest expense    
Interest income    
Total other (income) expense    
Income before provision for income taxes    
Provision for income taxes (Note):    
Current federal and state income taxes    
Net income (loss)    
Retained earnings, beginning of period    
Retained earnings, end of period    

Practical note: Ending retained earning should agree with the ending retained earnings number on the balance sheet.