Financial Analysis: Making Business Projections

Analyze past performance data and get a realistic picture of your company's future performance using Microsoft Excel.

Introduction

• Welcome
• What you should know before watching this course

1. Financial Projection Basics

• Financial projections
• The difference between forecasting and planning
• Treating start-ups and established businesses differently
• The top-down and bottom-up approaches
• Volatility and the treatment of exceptional elements

2. Estimating Volumes, Price, and Revenue

• Revenue projection basics
• Preparing past P&Ls
• Projecting revenue based on your resources
• Adjusting for changes in productivity
• Adjusting for changing resources
• Detailing your plan by month using seasonality
• Creating a product-level projection
• Adding back exceptional elements using pipeline information
• Market-driven forecasting

3. Estimating Cost of Production and Margin

• Gross-margin projection basics
• Determining which gross-margin profile to use
• Combining product performance with product margins

4. Estimating Operating Expenses

• Operating expenses (OPEX) projection basics
• Excluding exceptional items
• Projecting fixed OPEX
• Projecting variable OPEX
• Adding back exceptional elements

5. The Top-Down Approach

• Explaining the top-down approach
• The revenue trajectory method
• The exit methodology
• Projecting gross margin and OPEX

6. Setting Up Targets

• Finding balance between the two approaches
• Moving from forecast to plan
• Adapting projects for start-ups
• Developing worst-case scenarios

Conclusion

• Next steps