Notes to financials

Notes to the financial statements

Investors and bank managers often require that you include the notes to the financial statements with your business plan. We have provided a worksheet with a summary of the structure of the business plan, with the most relevant notes, calculations and assumptions. Most of the numbers are automatically filled from the assumptions and the respective worksheets.

This is an open worksheet, you can add or edit additional information as is needed. Items shown here in RED are automated.


Projection time horizon 5 years
Basis 3 years monthly and quarterly, 5 years annual summarized.
... ...
Balance sheet
Cash/Bank Cash balance is derived from the end balance of the same month/year of the cash flow forecast.
Debtors/Accounts receivable Accounts receivable balances are calculated from an estimated 75% sales on credit, 30 days collection on sales and 60 days collection from credit card companies.
Stock/Inventory Based on the minimum stock level of each product line (see inventory account sheet for details). The beginning inventory not sold in any particular period is carried forward accordingly.
Other current assets It includes notes receivable, investments, marketable securities (f.e. government bonds and notes, commercial paper, and/or stock and bond investments in public corporation).
Fixed assets Includes the original book value of the assets.
(see the depreciable assets 5 year summary for depreciation details for each fixed asset type)
Depreciation Depreciation is provided for physical properties on a [straight-line, fixed-declining balance, double-declining balance, sum-of-the-years' digits] basis over the estimated useful life of the property as follows:
Buildings = 40 years, Office equipment = 5 years, Electronic equipment = 3 years, Furniture & Fixtures = 5 years,  Machinery = 10 years, Vehicles = 8 years, Goodwill = 15 years, Start-up costs = 2 years.
Goodwill Goodwill includes ...
Creditors/Accounts payable Estimated by utilizing 30 days payable and the expense items not paid in cash. It also includes any unpaid accumulated interest from deferred loans.
Suppliers' credit Derived by utilizing 80% purchases on credit and 60 days payable.
Sales tax Sales tax payable as calculated in the sales tax account.
Income tax The company income tax payable.
Shareholders' capital Consists of the initial shareholders' investment of 75,000 US$ plus an additional stock sale of 237,500 US$ over 5 years as entered in the funding worksheet.
Retained earnings Previous year's net earnings (net profit) not paid out as dividends.
Provisions ...
Contingent liabilities ...
Contingent assets ...
Cash flow
Cash sales Estimated 25% cash sales.
Collections from debtors Assumptions are 75% sales on credit, 60 days collection from credit card companies and 30 days collection on sales.
Sales tax in Total incoming sales tax as calculated in the sales tax account.
Other cash receipts ...
Cash purchases Estimated 20% cash purchases.
Suppliers payment Derived by utilizing 80% purchases on credit and 60 days payable.
Other cost of goods Includes any sales commissions, packaging, and shipping.
Operating expenses Includes the expense items paid in cash and the creditors payments (with 30 days payable).
Franchise fees A 10% fee on gross profit.
Short/Long term loans repayment Principal repayments, excluding interest.
Change in other current assets Adjustments of other current assets (increase/decrease) in the balance sheet for any particular period.
Sales tax payment Paid on a bimonthly basis. A negative amount is a refund.
Dividends 25% of the net earnings paid on a quarterly basis.