Essay: Profit and Loss Forecast for Cold Stone Creamery Franchise

Sample Essay

The projected income statement of three years for the franchise presents the expected level of revenue in the first three years of business with the corresponding cost of sales and the operating expenses which will be incurred during business in these years.

The sales of the franchise have been implemented as presented in the sales forecast and a growth rate of 6 percent has been applied for the second and third year of business. The income statement does not include any advertising and marketing expenses as the parent company is responsible for the marketing and advertisement of products. The four operating expenses incurred by the company include royalty expense, salaries expense, depreciation expense and general expenses. The general expenses include all miscellaneous expenses related to operating the business such as rent, utilities and maintenance.

Cold Stone Creamery Franchise
Forecasted Income Statement
For the Fiscal Year
1 2 3
$ $ $
Net Sales 350,000 371,000 393,260
Cost of Goods Sold 87,500 92,750 98,315
Gross Profit 262,500 278,250 294,945
Operating expenses:
Royalty Expenses 21,000 22,260 23,596
Salaries Expense 49,000 51,940 55,056
Depreciation Expense 11,130 11,130 11,130
General Expenses 42,000 44,520 47,191
Total operating expenses 123,130 129,850 136,973
Earnings Before Interest and Taxes 139,370 148,400 157,972
Income Taxes 55,748 59,360 63,189
Net Income 83,622 89,040 94,783

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