This document discusses financial planning and analysis (FP&A), including what FP&A is, where it fits in an organization, typical education and skills needed, common reports and techniques used, and the future of the field. It provides examples of monthly budget reports for revenue and cost of goods sold for a company, including line items for sales, discounts, returns, expenses, variances, and more. It also lists typical FP&A data and reports such as trial balances, budgets, cash flow projections, business models, and reconciliations.

1. 1. What is FP&A
2. Position in the Organizational Chart
3. Education background / Foundation for FP&A
5. Examples of FP&A Reports
4. FP&A Consists of . . .
5. Examples of FP&A Reports
6. FP&A – techniques and methods
8. Starting FP&A
7. Future of FP&A
call Cliff (949) 813-1349

2. 1. Data store • Trial balance(24 mths)
• Changes to Trial balance (Mthly Revenue/COS/Expenses/Int/Taxes)
2. Budgets • Revenue > Forecasts
> Targets
> Previous
• GP(Margin reports)
• Expenses & Interest & Taxes
• EBITDA
3. Cash flow projections (incl DCF model)
4. Complete business model
5. Recons (EG: Cash flow v Net Profit)
5.1 Typical FP&A Data and reports

3. 4.2 Departmental budgets roll up

4. Top Pick Global Inc. Top Pick Global Inc.
2020 Monthly Trended BUDGET 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 21 2020 Monthly Trended BUDGET 3 4 5 6 7 8 9 10 11 12 13 14
20-Jan 20-Feb 20-Mar 20-Apr 20-May 20-Jun 20-Jul 20-Aug 20-Sep 20-Oct 20-Nov 20-Dec Q-1 Q-2 Q-3 Q-4 2020 21-Jan 21-Feb 21-Mar 21-Apr 21-May 21-Jun 21-Jul 21-Aug 21-Sep 21-Oct 21-Nov 21-Dec Q1 Q2 Q3 Q4 2020
BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET
REVENUE REVENUE
Gross Sales / Shipments - Wholesale 1,180,820 1,560,963 1,966,216 1,301,015 1,972,188 2,885,798 2,846,320 3,541,462 2,858,218 1,297,325 1,621,229 2,021,445 3,587,000 4,723,000 7,018,000 3,166,000 18,494,000 4_REV_01 Gross Sales / Shipments - Wholesale 813,569 1,503,688 1,117,268 341,972 492,812 1,678,641 501,025 668,034 501,025 979,435 1,265,104 1,836,441 3,434,526 2,513,425 1,670,085 4,080,979 11,699,014
Gross Sales / Shipments - External Ecommerce 1,121,000 1,436,000 2,228,000 1,774,000 6,559,000 4_REV_02
Gross Sales / Shipments - External
Ecommerce - - - - - - 589,693 1,152,583 938,149 - - - - - 2,680,425 - 2,680,425
Gross Sales / Shipments - In-House
Ecommerce 150,738 199,265 250,997 122,317 185,371 271,312 198,251 246,669 199,080 194,536 243,106 303,359 601,000 579,000 644,000 741,000 2,565,000 4_REV_03
Gross Sales / Shipments - In-House
Ecommerce 162,490 159,852 256,713 345,156 381,719 318,283 459,834 310,699 472,262 267,958 166,568 289,684 579,055 1,045,157 1,242,795 724,210 3,591,216
Total Gross Sales / Shipments 1,331,558 1,760,228 2,217,213 1,423,332 2,157,559 3,157,110 3,044,571 3,788,131 3,057,297 1,491,861 1,864,335 2,324,804 5,309,000 6,738,000 9,890,000 5,681,000 27,618,000 Total Gross Sales / Shipments 976,059 1,663,540 1,373,981 687,127 874,530 1,996,924 1,550,553 2,131,315 1,911,436 1,247,393 1,431,672 2,126,125 4,013,581 3,558,582 5,593,304 4,805,189 17,970,655
Handling andShipping 10,836 10,836 10,836 10,836 10,836 10,836 10,836 10,836 10,836 10,836 10,836 10,836 32,508 32,508 32,508 32,508 130,032 4_REV_21 Handling andShipping 9,181 3,285 7,018 12,284 14,664 15,297 - - - - - - 19,483 42,246 - - 61,729
Sales Discounts (1,332) (1,760) (2,217) (1,423) (2,158) (3,157) (3,045) (3,788) (3,057) (1,492) (1,864) (2,325) (5,309) (6,738) (9,890) (5,681) (27,618) 4_REV_22a Sales Discounts - Ecommerce (441) (122) (510) (388) (726) (315) - - - - - - (1,073) (1,429) - - (2,502)
4_REV_22b Sales Discounts - Warehouse - - - - - (1,857) - - - - - - - (1,857) - - (1,857)
Markdowns (19,973) (26,403) (33,258) (21,350) (32,363) (47,357) (45,669) (56,822) (45,859) (22,378) (27,965) (34,872) (79,635) (101,070) (148,350) (85,215) (414,270) 4_REV_23 Markdowns (553) - - (53,447) (553) - - - - - - - (553) (54,000) - - (54,553)
Sales Returns & Allowances (43,276) (57,207) (72,059) (46,258) (70,121) (102,606) (98,949) (123,114) (99,362) (48,485) (60,591) (75,556) (172,542) (218,985) (321,425) (184,632) (897,585) 4_REV_24a Sales Returns & Allowances (38,995) (27,282) (29,348) (38,151) (34,532) (62,083) - - - - - - (95,626) (134,766) - - (230,391)
4_REV_24b Sales Returns & Allowances (42,951) (25,605) (28,690) (9,594) (9,712) (12,966) - - - - - - (97,246) (32,272) - - (129,518)
4_REV_24c Sales Returns & Allowances (1,366) (3,914) (1,267) (88) (1,299) (2,389) - - - - - - (6,547) (3,776) - - (10,323)
Price Difference Earned - - - - - 4_REV_25 Price Difference Earned - - - - - - - - - - - - - - - - -
Co-op Advertising (13,316) (17,602) (22,172) (14,233) (21,576) (31,571) (30,446) (37,881) (30,573) (14,919) (18,643) (23,248) (53,090) (67,380) (98,900) (56,810) (276,180) 4_REV_26 Co-op Advertising (358) (13,963) (3,112) (4,724) (21,428) (11,998) - - - - - - (17,434) (38,151) - - (55,585)
Customer Deductions & Writeoffs (6,658) (8,801) (11,086) (7,117) (10,788) (15,786) (15,223) (18,941) (15,286) (7,459) (9,322) (11,624) (26,545) (33,690) (49,450) (28,405) (138,090) 4_REV_27 Customer Deductions & Writeoffs (2,494) (6,817) (5,258) (3,294) (3,471) (4,591) (103,887) (144,929) (129,978) (87,317) (100,217) (148,829) (14,569) (11,356) (378,794) (336,363) (741,082)
Dilution Task (25,000) (30,000) (25,000) (30,000) (80,000) - (30,000) - (110,000) 4_REV_28 Dilution Task - - - - - - - - - - - 50,000 - - - 50,000 50,000
Net Sales 1,232,840 1,629,290 2,062,256 1,343,786 2,031,390 2,967,469 2,862,077 3,558,421 2,843,995 1,407,964 1,756,786 2,188,015 $ 4,924,387 $ 6,342,645 $ 9,264,493 $ 5,352,765 $ 25,884,289 Net Sales 898,082 1,589,121 1,312,813 589,726 817,472 1,916,023 1,446,666 1,986,386 1,781,458 1,160,075 1,331,455 2,027,296 3,800,016 3,323,222 5,214,510 4,518,826 16,856,573
First Cost Commissions - - - - - - - - - - - - - - - - - 4_REV_41 First Cost Commissions 8 (4,294) (10,556) 838 (3,844) (1,349) - - - - - - (14,842) (4,355) - - (19,197)
Royalties/Licencefees - - - - - - - - - - - - - - - - - 4_REV_42 Royalties/Licencefees - - - - - - - - - - - - - - - - -
Total Revenue 1,232,840 1,629,290 2,062,256 1,343,786 2,031,390 2,967,469 2,862,077 3,558,421 2,843,995 1,407,964 1,756,786 2,188,015 $ 4,924,387 $ 6,342,645 $ 9,264,493 $ 5,352,765 $ 25,884,289 Total Revenue 898,090 1,584,827 1,302,256 590,564 813,628 1,914,675 1,446,666 1,986,386 1,781,458 1,160,075 1,331,455 2,027,296 3,785,173 3,318,867 5,214,510 4,518,826 16,837,376
Dilution % 7.4% 7.4% 7.0% 5.6% 5.8% 6.0% 6.0% 6.1% 7.0% 5.6% 5.8% 5.9% 7.2% 5.9% 6.3% 5.8% 6.3% Dilution %
COST OF GOODS SOLD COST OF GOODS SOLD
COGS at Standard - Wholesale - - - - - 5_COGS_01 COGS at Standard - Wholesale 663,208 1,185,479 805,946 239,364 267,604 1,095,290 - - - - - - 2,654,633 1,602,258 - - 4,256,891
COGS at Standard - External Ecommerce - - - - - 5_COGS_02 COGS at Standard - External Ecommerce 14,483 26,486 65,414 124,673 93,770 66,022 - - - - - - 106,383 284,465 - - 390,848
COGS at Standard - In-house Ecommerce - - - - - 5_COGS_03 COGS at Standard - In-house Ecommerce - - - - - - - - - - - - - - - - -
COGS at Standard 776,093 1,021,291 1,332,911 834,327 1,396,364 2,049,799 1,923,111 2,430,497 1,944,211 843,887 1,232,122 1,469,887 3,130,295 4,280,490 6,297,818 3,545,897 17,254,500 COGS at Standard 677,691 1,211,965 871,360 364,037 361,375 1,161,312 - - - - - - 2,761,016 1,886,723 - - 4,647,739
Non-Std COGS 5_COGS_21 Non-Std COGS - - - - - - - - - - - - - - - - -
FOB Variance - - - - - 5_COGS_22 FOB Variance (12,350) - 46,271 (46,282) - - - - - - - - 33,921 (46,282) - - (12,361)
Freight Variance - - - - - 5_COGS_23 Freight Variance (52,903) 3,311 636 (2,727) (9,747) (485) - - 0 - - - (48,956) (12,959) - - (61,915)
Duty Variance - - - - - 5_COGS_24 Duty Variance 2,174 1,954 - 375 220 (224) - - 0 - - - 4,129 371 - - 4,500
Commission (Tariff) Variance 79,213 118,552 139,067 95,362 83,964 227,794 200,705 290,950 237,233 112,676 144,688 156,321 336,832 407,120 728,887 413,684 1,886,524 5_COGS_25 Commission (Tariff) Variance 569 (8,560) - 242 (1) (11,044) - - 0 - - - (7,991) (10,803) - - (18,794)
Inbound Variance - - - - - 5_COGS_26 Inbound Variance 59,395 18,683 (48,695) (19,989) 46,094 87,132 - - 0 - - - 29,383 113,238 - - 142,620
Inventory Reserves - - - - - 5_COGS_27 Inventory Reserves 33,900 (53,776) (34,756) 1,685 76,684 36,334 - - 0 - - - (54,632) 114,703 - - 60,072
Factory ClaimsRecovered (17,463) (31,038) (32,548) (25,712) (17,463) (58,920) (52,687) (74,161) (60,101) (29,754) (31,087) (36,232) (81,049) (102,095) (186,948) (97,073) (467,166) 5_COGS_28 Factory ClaimsRecovered (4,736) - - (195) (15,708) - (50,000) (60,000) -55000 (33,000) (40,000) (30,000) (4,736) (15,903) (165,000) (103,000) (288,639)
Standard Revaluation Variance - - - - - 5_COGS_29 Standard Revaluation Variance - 0 814 (869) (66) 1,882 - - 0 - - - 814 947 - - 1,761
COGS on returns 5_COGS_30 COGS on returns - - - - - - - - 0 - - - - - - - -
- - - - -
Total Cost of Goods Sold 837,843 1,108,805 1,439,431 903,977 1,462,865 2,218,673 2,071,129 2,647,286 2,121,342 926,810 1,345,723 1,589,976 3,386,078 4,585,516 6,839,757 3,862,508 18,673,859 Total Cost of Goods Sold 703,741 1,173,578 835,629 296,277 458,850 1,274,907 (50,000) (60,000) (55,000) (33,000) (40,000) (30,000) 2,712,948 2,030,035 (165,000) (103,000) 4,474,983
$ 758,630 $ 990,253 $ 1,300,363 $ 808,615 $ 1,378,901 $ 1,990,879 $ 1,870,424 $ 2,356,336 $ 1,884,110 $ 814,133 $ 1,201,035 $ 1,433,655 $ 3,049,246 $ 4,178,395 $ 6,110,870 $ 3,448,824 $ 16,787,335 - - - - -
- - - - -
GROSS PROFIT $ 394,997 $ 520,485 $ 622,826 $ 439,809 $ 568,525 $ 748,796 $ 790,948 $ 911,135 $ 722,653 $ 481,154 $ 411,063 $ 598,039 $ 1,538,308 $ 1,757,129 $ 2,424,736 $ 1,490,256 $ 7,210,430 GROSS PROFIT $ 194,349 $ 411,249 $ 466,627 $ 294,287 $ 354,778 $ 639,767 $ 1,496,666 $ 2,046,386 $ 1,836,458 $ 1,193,075 $ 1,371,455 $ 2,057,296 $ 1,072,225 $ 1,288,832 $ 5,379,510 $ 4,621,826 $ 12,362,393
Gross Profit % 32.0% 31.9% 30.2% 32.7% 28.0% 25.2% 27.6% 25.6% 25.4% 34.2% 23.4% 27.3% 31.2% 27.7% 26.2% 27.8% 27.9% Gross Profit % 21.6% 25.9% 35.8% 49.8% 43.6% 33.4% 103.5% 103.0% 103.1% 102.8% 103.0% 101.5%
Gross Profit % at Standard 35.8% 35.2% 33.6% 34.7% 31.4% 27.9% 30.2% 28.2% 28.6% 35.9% 26.2% 30.0% 34.7% 30.4% 29.0% 30.3% 30.7% Gross Profit % at Standard 24.5% 23.5% 33.1% 38.4% 55.6% 39.3% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
4.2 2021 and 2020 Budgets

5. 4.3 Actuals v forecast:
Report - YTD Comparison 2020-March
YTD Actual 2020-March YTD Forecast 2020-March
US UK Total US UK Total
OPERATING EXPENSES
Advertising & Promotion 9,179 1 9,180 14,866 2 14,868
Product Advertising 700 1 701 14,866 2 14,868
Product Promotion 8,479 8,479 - -
Marketing 154,554 - 154,554 77,870 - 77,870
Software license fees - - 21,570 21,570
Technology resources - - 14,200 14,200
Digital marketing resouces 154,554 154,554 42,100 42,100
Selling (samples/trade shows) Expense 152,908 - 152,908 32,299 - 32,299
Product Development Costs 16,644 16,644 3,484 3,484
Samples Net 35,279 35,279 5,500 5,500
- - - -
Trade Shows - Fees, Booth & Other 100,985 100,985 23,315 23,315
Product Development Costs/Trade Shows - - - -
Complete report:
Extract

6. We will penetrate the market by distributing our product for free – this will bankrupt the competition who are
dependent on selling theirs (EG: Netscape)
We will provide a ‘free’ version and charge for the ‘premium’ version (WinZip – Nico Mak Computing)
We will allow our product to be hacked so that we penetrate the market – after a base is established, we will
‘fix’ the security (EG: Lotus 123) – this was probably not the intended strategy but that was how it worked out
Henry Ford – Model T “Any color as long as it is Black!”
Winston Churchill (Paraphrased) “We won’t let them know we have cracked their Enigma code”
Sears Robuck “You can buy anything from our catalogue”
Other example strategies include:
Cross selling Innovation
Expand our product line Improve customer service
Target the ‘young’ market Product differentiation
Pricing strategies Tech advantage
5.2 Examples of Strategy/Tactics

7. 5.3 Typical FP&A Basis for Reporting
1. Basis • Linear projections
• Prior period comparison
• Zero-based
• Scenarios
2. Additional Reports > KPI’s - Dupont model
- other
> Best/Worst/Likely
> Custom
> Departmental/Divisional
> Group

8. 1. No consistency of presentation
2. Different ‘pictures’
3. Confusing
5.4 Some Problems with FP&A Reports
4. Communication - ineffective
5. No rules
6. Every Co has different

9. Financial modeling is a quantitative analysis commonly used for either asset pricing or general
corporate finance. It is the process wherein a company’s expenses and earnings are taken into
consideration (commonly into spreadsheets) to anticipate the impact of today’s decisions in the future.
The financial model also turns out to be a very impactful tool for the following tasks:
 Estimate the valuation of any business
 Compare competition
 Strategic planning
 Testing different scenarios + optimization
 Budget planning and allocation
 Measure the impacts of any changes in economic policies
 Rolling forecasts/updates
 Variance analysis + reasons/causes (interpretation)
 KPI’s
Since financial modeling is one of the most important primary skills, you can also share your experience
through different financial models including the discounted cash flow (DCF) model, initial public offering
(IPO) model, leveraged buyout (LBO) model, consolidation model, etc.
5.6 Explain ‘Financial Modeling’

10. 5.7 Operations Budget
Sales
Sales
&
Marketing
Admin
Expenses
Operations Cash Budget
Production
Note: This considers only operations
Materials Labor Overhead

11. 5.8 Forecasting techniques
3 types of forecasting methods:
1. Qualitative
2. Time series
3. Causal models (eg: Scenario Planning)
6 statistical methods
1. Linear regression
2. Moving average
3. Multiple linear regression
4. Productivity ratios
5. Time series analyses
6. Stochastic analysis (a random probability distribution)
Of course there is
always the Crystal Ball
Remember that these are mostly mathematics
– the real expertise is to choose the
appropriate method
- the technique, any techy can handle that

12. Return on equity (ROE) is evaluated:
 Net Profit Margin: = Net Income /Revenue
 Asset Turnover Ratio: = Net Sales (or Revenue) / Average Assets
 Financial Leverage: = Average Assets / Average Equity
5.9 Components of the Dupont Model?

14. 5.11 2022 Data Store- Trial Balances (Mthly Rev only)

15. 5.12 2022 Data Store- Trial Balances (Bal Shts)

16. 5.15 Budget – Illustrating ‘out-of-date’ format

17. 5.16 Essential FP&A Business Models

18. 5.17 FP&A - Equity Trend Report (2014 style)

20. 5.19 FP & A activities depends on what the CFO wants!

21. 5.20 2001 Presentation Style

22. Consolidated Global Inc.
2020 Budget - Complete
20-Jan 20-Feb 20-Mar 20-Apr 20-May 20-Jun 20-Jul 20-Aug 20-Sep 20-Oct 20-Nov 20-Dec 20-Q1 20-Q2 20-Q3 20-Q4 2020 Annual
Actual Actual Actual Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast Actual Actual Actual Forecast Forecast
SALES
Gross Sales / Shipments - Wholesale (813,569) 1,503,688 1,117,268 341,972 492,812 1,678,641 1,430,996 1,465,252 925,496 1,297,325 1,621,229 2,021,445 1,807,387 2,513,425 3,821,745 4,940,000 13,082,557
Gross Sales / Shipments - External Ecommerce (162,490) 159,852 256,713 345,156 381,719 318,283 253,936 227,924 310,499 - - - 254,074 (4,355) (822) - 248,897
Gross Sales / Shipments - In-House Ecommerce - - - - - - - - - 194,536 243,106 303,359 - - - 741,000 741,000
Total Gross Sales / Shipments (976,059) 1,663,540 1,373,981 687,127 874,530 1,996,924 1,684,932 1,693,176 1,235,996 1,491,861 1,864,335 2,324,804 2,061,462 2,509,070 3,820,923 5,681,000 14,072,455
Handling and Shipping (9,181) (3,285) (7,018) (12,284) (14,664) (15,297) (11,550) (9,039) (7,659) 10,836 10,836 10,836 (19,483) (42,246) (28,247) 32,508 (57,468)
Sales Discounts 441 (122) (510) (388) (726) (2,171) (213) (543) 1,147 (1,492) (1,864) (2,325) (192) (3,286) 391 (5,681) (8,767)
Markdowns - - - - - - - - - (22,378) (27,965) (34,872) - - - (85,215) (85,215)
Sales Returns & Allowances 83,865 (56,801) (59,306) (101,833) (45,543) (77,437) (91,770) (42,459) (47,626) (48,485) (60,591) (75,556) (32,241) (224,813) (181,855) (184,632) (623,542)
Price Difference Earned - - - - - - - - - - - - - - - - -
Co-op Advertising - - - - - - - - - (14,919) (18,643) (23,248) - - - (56,810) (56,810)
Customer Deductions & Writeoffs 2,852 (20,780) (8,370) (8,018) (24,899) (16,589) 12,033 (66,482) (10,316) (7,459) (9,322) (11,624) (26,299) (49,507) (64,766) (28,405) (168,976)
Dilution Task - - - - - -
Net Sales (898,082) 1,744,528 1,449,185 809,650 960,363 2,108,419 1,776,432 1,811,699 1,300,449 1,575,758 1,971,884 2,461,593 2,139,677 2,828,921 4,095,400 6,009,235 15,073,233
First Cost Commissions (8) (4,294) (10,556) 838 (3,844) (1,349) (492) (331) - - - - (14,858) (4,355) (822) - (20,035)
Royalties/Licence fees - - - - - - - - - - - - - - - - -
Total Net Revenue (898,090) 1,740,234 1,438,629 810,488 956,519 2,107,071 1,775,941 1,811,368 1,300,449 1,575,758 1,971,884 2,461,593 2,154,535 2,833,276 4,096,222 6,009,235 15,093,268
Dilution %
COST OF GOODS SOLD
Total Cost of Goods Sold 703,741 (1,173,578) (835,629) (296,277) (458,850) (1,274,907) (1,208,092) (1,219,615) (704,500) (760,964) (1,118,522) (1,349,799) (1,305,467) (2,030,035) (3,132,208) (3,229,285) (9,696,994)
5.21 2021 Presentation Style
Example of Budget:
Informative, clean style, good communication, logical and understandable

23. Note:
GP = 13,723,502
Cash = 12,814,700
Diff mostly due to increase in
Inventory
2021
Presentation
Style

24. 2006 Presentation Style
5.23
2006 Presentation Style

25. IS YOUR LIFE
NOW CHANGED?
The End

26. 26
CliffB