Pro-Forma Projected Expenses and Operating Costs for Robotics

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A pro forma projected financial statement

A pro forma projected financial statement is a leveraging tool for hypothetical assumptions and data for the future value of a project performance during a period yet to be covered. It forecasts financial statements for future periods in a business (Laurie, 2019). For this reason, a pro forma projected expenses and operating costs for robotics/AI could be developed through the following steps.

Step one

The first step in developing pro forma projected expenses and operating costs is the calculation of revenue estimates for robotics and AI. This step will incorporate reasonable market insights (Laurie, 2019). I will also look for asset accumulation, cash flow, and typical annual income by consulting experts and conducting research.

Step two

The second step will be the calculation of expenses and debts. In this step, credit and debt lines credit lines and loans. Insurance, rent, license, permit, employee wages, and other costs will be part of the budget. I will utilize profit estimates in step one and total expenses and obligations in this step to establish the projects first component. This step will give extra care to each expense. I will evaluate all costs of the project to determine what to cut.

3rd step

The third step will be the calculation of the projects cash flow. This section significantly increases future sales, stock-outs, earnings, sales, and varied financial performances.

4th step

The fourth step is the development of an accounts chart for the business. The chart of accounts is a three-to-five-year statement of the pro forma. The initial year of the business is divided into monthly installments, while the subsequent second and third are reduced into quarterly divisions. The fourth and fifth year is lowered annually.

Estimating business revenue is vital for entrepreneurs to help develop staffing and operational plan that contribute to the businesss success. Thus, revenue would be estimated by first forecasting expenses for different categories, such as fixed costs and variable costs. Fixed or overhead costs for accurate revenue estimation include utility bills, accounting, rent, legal insurance license fees, technology, salaries, marketing and advertising, and postage. Variable costs comprise costs of goods sold, packaging, customer service, material supplies, direct sales, customer services, and direct marketing (Laurie, 2019). The estimation for expenses will double estimates for marketing and advertisement expenses due to escalation beyond projection. The pro forma will triple estimates for legal licensing and insurance fees because they are unpredictable and exceed expected values.

Estimation would also be done with the aid of aggressive and conservative cases. Usually, fluctuating between aggressive dreams and conservative reality motivates the business. For example, conservative revenue estimation will presume assumptions that include two marketing channels, new products, low price points, and no sales staff. The aggressive case assumes a low price point for the base products and a higher price for premium products and numerous marketing channels (Laurie, 2019). Besides, key ratios are significant in making sound projections on a businesss revenues, fixed, variable, and margins. The ratio of all direct costs to the total revenue in a certain quarter of the year helps to achieve a positive gross margin. The operating profit margin is also estimated to trace revenue growth. In this case, overhead costs should take a small portion of total costs to increase profit margins.

Estimated figures for robotics are subject to strategic management decisions. Thus, the ROI calculator is significant in generating revenue and cost estimation figures. The calculator aids in analyzing the economic impact of robotics. It saves time in executing the values needed to forecast the future growth of the business (Laurie, 2019). It is advantageous over other means of obtaining values since it accounts for all total costs of ownership. Other ways of estimating figures include using formulas to provide values that cannot be automated. Historical data is also compared and estimated with the current market and robotics trends.

Robotics/AI pro forma financial statement

	1^stQuarter	2^ndQuarter	3^rdQuarter
Revenue Sales	15000	35700	40000
Costs of Sales	(9000)	(21200)	(23500)
Gross Profit	9000	21200	1000
Operating Expenses
Rent	2000	2120	4500
Advertising	700	(4500)	(5500)
Web cost	2500	6400	16700
Total Expenses	(3600)
Operating Income	4900	12800	16700
Net Income	5900	20000	35000

Variable costs are the total of materials and labor required to produce a unit of a product in a business. Estimated total variable cost is calculated by its formula as variable cost per unit multiplied by units produced. An accurate estimate will be achieved by considering variable costs per unit and total units produced. The figures are achieved by measuring resources used in each unit because variable costs increase proportionally with the number of required units (Laurie, 2019). Total variable cost is estimated by multiplying the total number of units by the cost per unit. For example, if one unit costs £50 for a product and ten units have been produced, the total variable cost is 10 multiplied by £50, or £600. Fixed costs do not vary with the number of produced products. It is calculated by summing warehouse space + website domain cost + production equipment. For efficiency, figures for the estimates can be arrived at using an ROI calculator for robotics/AI.

References

Laurie M. (2019). Developing a pro forma financial statement. Medical Group Management Association MGMA.

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