The document is a presentation about creating a working financial plan and budget for a company. It discusses the objectives of creating a budget, key factors that determine profitability like gross profit and overhead, and how to use the sample budget Excel file provided. The presentation demonstrates how to modify data in the sample file and see the impact on financial metrics. It also provides tips for customizing the file template for a company's specific needs.

1. Constructing W ki
C t ti a Working
Financial Plan for Your
Company
October 25
O t b 25, 2011
Presented By
John Reed, CPA,
J h R d CPA CCIFP
©2011 LarsonAllen LLPP
P
©2011 LarsonAllen LL
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2. Today’s Learning Objectives
• Understand potential uses of a budget for your
company
• Gain an understanding of the factors that effect
gross profit recognition
• Understand how to use the sample budget to
create your Company’s budget
y p y g
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• Explore ways you might want to modify the
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Excel file to suit your Company’s needs
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3. Why Create a Budget for Your Company?
• Evaluate how much overhead your company
can support
• Use as an interactive tool to plan for cash flow
and profitability
• Support a better bonding program
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4. Three Key Variables Determine Profitability
• Gross Profit from job backlog
• Timing of work completion
• Overhead
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5. Using the Sample Excel Budget File
• History of the Model.
• Turn on Macros if asked
• The four tabs
– Overall Budget – Shaded cells
– Job Completion
– Job to Date Revenue
– Job to Date Cost
• Shaded cells
• Add job macro – CTRL+SHIFT+A
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6. Practice exercise 1
• Note that the 4th quarter net income is $3,537
• On the Job Completion tab, change the 4th
quarter 2012 percent complete for Job Number
2011-003 from 100% complete to 90%
complete. Click on the budget tab. The 4th
quarter net income should become a $16,463
loss.
• Change job 2011-003 4th quarter 2012 back to
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100%.
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7. Practice exercise 2
• Note that the 4th quarter net income is $3,537
• On the Job Completion tab, change the
Estimated Cost on job 2011 003 from
2011-003
$2,200,000 to $2,100,000. The Gross Profit on
job 2011-003 should change from 8.3% to
12.5%. Click on the budget tab. The 4th quarter
net income should change to $28,537.
• Change job the Estimated Cost on job 2011-003
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back to $
$2,200,000.
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8. Practice exercise 3
• On the budget tab change the 4th quarter
tab,
salaries to $50,000 (change the round formula to
be 200,000/4).
, )
• The 4th quarter net income should change to a
net loss of $21,463
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9. Practice exercise 4
• Click on the Job Completion Tab note the
Tab,
number of blank rows.
• Hold down CTRL+Shift+A
• Click on the Job Completion Tab and note the
number of blank rows
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10. Tips for use
• Fill in the date in cell A7 so that the budget print
out history can be tracked.
• Always enter 100% as the completion
p
percentage in all future columns for completed
g p
jobs. Otherwise the math doesn’t work correctly.
• Always save a copy without your latest changes
that can be used in the event of a problem.
• Save a blank template file.
• Save working copies with the revision date as
part of the file name.
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11. Modifying the Model for Your Company
• Change the operating expense line items to
what appears on your internal or external
financial statements.
• Some clients have changed the model from
quarters to months. To do that insert additional
columns in all the tabs and copy the formulas to
the right.
• When modifying, always test the calculations to
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make sure the results are correct.
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12. LarsonAllen Construction and Real Estate Group
• Nationally Oriented CPA & Business Consulting Firm
Established in 1953 by Rholan Larson & John Allen
• History & Focus on Privately-Owned, Owner-Operated
Businesses
• Primary Advisor Relationship – “Total Client Service
Total Service”
• Managed by the “LEADERS” culture
g y
• Ranked in the top 20 CPA firms in the U.S.;
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approximately 1 800 employees. 45 locations, 13 states
1,800
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13. LarsonAllen’s Office Locations
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14. Contact Us
• John Reed, CPA, CCIFP
Principal, Construction and Real Estate
Practice exclusive to construction and real estate in Florida
239.226.9903
jreed@larsonallen.com
LarsonAllen LLP
http://www.larsonallen.com/Construction_and_Real_Estate/
1715 North Westshore Blvd
Suite 950
Tampa, FL 33607
813.384.2700
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