Financial Modeling

Crafting a financial plan allows the business owner to not only showcase its strengths to potential investors, but to identify future needs, prioritize expenditures both long- and short-term and plan for the day-to-day success of the company. Reviewing how close forecasts come to reality helps hone financial abilities and paints an accurate, detailed portrait of a company’s health, stability and financial well-being. A well-organized and efficient financial report, part of what Wise provides to every client, includes:

A Profit & Loss Statement/Income Statement:

A P&L statement shows the revenue recognized by the company during a specific period of time, minus expenses. The purpose of the P&L income statement is to show executives, banks and potential or present investors whether the company made or lost money during the period being reported. This statement is an extremely important part of the financial planning process.

A Revenue Forecast:

This financial forecast predicts future outcomes for the company. The revenue forecast is essentially an educated guess about how the company will perform during the next five years, but as the business owner, your guess is expected to be very educated and therefore accurate enough to be trusted by investors.

A Balance Sheet:

The balance sheet provides a snapshot of the company’s financial condition at the time of the report. A standard company balance sheet shows three key values: assets, liabilities and ownership equity. The balance sheet is the only financial statement that applies to a single point in time during a business’s calendar year.

A Break-Even Analysis:

The break-even analysis shows the total revenue needed to cover the company’s total costs. It identifies the point where revenue and costs are equal, with no gain and no loss. The break-even value is illustrated graphically and falls at the point where the total revenue and total cost curves meet on the graph. This is a key value of great utility to you as a business owner.

A Cash Flow Statement:

Cash flow is the movement of money into or out of the business during a specific range of time. It can help you recognize trends and thus stay ahead of potential spending issues.

A Sensitivity Analysis:

The sensitivity analysis is a detailed study of how the variation of uncertainty in the output of a statistical model can be attributed to different variations in the inputs of the model. As a result of this study, is the “best” and “worst” case scenarios based on a set of variables can be identified, quantified and charted.