Projecting or planning ahead is part of (4) ###### business planning. When creating a (5) ###### income statement , a business owner tries to determine how to reach the (6) ###### target. The annual profit must be sufficient to (7) ###### the owner a return for his or her time spent operating the business, plus a return on the investment. The owner 's target income is the sum of a reasonable salary for the time spent running the business and a normal return on the amount invested in the firm. After projecting the income needed, the business owner has to (8) ###### the target profit into a net sales figure for the forecasted period. The owner has to determine whether this sales volume is (9) ######. One useful technique is to break down the required annual sales into a daily sales figure to get a better (10) ###### of the sales required to yield the annual profit.
At this stage in the financial plan, the owner should create a (11) ###### picture of the firm’s expected operating expenses. Many books and business organizations give (12) ###### operating statistics data, based on a percentage of net sales. The business’s accountant can help you assign dollar values to anticipated expenses.
Developing a projected income statement is an important part of any financial plan, as the process forces the business owner to examine the firm’s future profitability.]]>