You need a CASH Forecast. You need a reliable SALES Forecast.  You want a Rolling Forecast.  This Model Does It ALL.  It shows where you are Really HEADED!!
Executive Summary - Operations                    Margin Analysis             Factors Affecting Operating Costs           


Will your operating expenses in 2013 be inline with revenues generated?  Are you going to achieve your budget projections for 2013?  This company Model will keep you up-to-date on all the above PLUS provides you with a complete picture of what has been achieved and where you are headed in future months.  It comes complete with monthly presentation materials that are up-to-date and easy to use.

As COO (VP of Ops, EVP) your primary focus is to improve the quality of your products and services WHILE decreasing costs.  You may be responsible for:  

  • Continuous improvements initiatives and operations excellence
  • Strategic planning
  • Business strategies and initiatives to achieve company goals
  • Creating metrics and benchmarks that measure strategic plans and strategies (corporate performance management - CPM)
  • Ensuring operations are efficient and effective
  • Improving margins
  • Improving processes and systems that deliver products and services to customers
  • Management and coordination of all company resources in operations, distribution, and new products development
Each of the above require metrics (KPI's) to benchmark your progress.  Your achievements must be linked to your financial statements to measure and to validate progress.  In small to midmarket private companies, this has been a very difficult task.  The Fortune 500 companies have the time, talent and resources to make CPM happen seamlessly each month.  By whatever name performance analytics is called (CPM, BPM, EPM, BI), these large corporations use multi-million dollar software packages to link performance analytics to financials.

NOW, small to midmarket private companies can have this same advantage.  Within this business Model, operating metrics and KPI's are integrated into all executive summaries and reports.

If you spend more time compiling and organizing operating metrics than analyzing the results, you need this Model in your company today.  You will not require any additional IT staff to utilize this Model.  With your guidance, we customize and tailor the Model to meet your reporting and presentation requirements.

You may be responsible for and already have a:

  • 2013 Budget
  • 2013 Strategic Business Plan

As a company, we do not create strategic business plans.  There are numerous individuals gifted and experienced that perform this service very well.  We build Business Models and provide assistance to owners in a M&A transaction.  In the process of customizing this Model for your company, you will assist us in translating your strategic plans into measurable metrics that will be included within your Model.

Forecasts vs. Budgets vs. Rolling Forecast

Budgets are many times a reflection of where you hope to be and what you want to accomplish without the use of metrics or benchmark to measure your progress.  Many company budgets focus exclusively on the income statement and ignore the balance sheet; this eliminates the possibility of setting realistic goals and objectives for your most important assets.  Budgets are also many times frozen once published.  This rarely provides a realistic forecast for the company after actual results begin to vary from the Budget.  With a Rolling Forecast, this issue disappears.  Each quarter the original forecast is updated based on the most recently completed quarterly results, thus the term "Rolling Forecast".

Forecasts Within the Model

Forecasting is the heart of this company Model.  The forecasts are realistic projections of where your company is headed based upon your historical trends and management discussions related to changes and improvements in operations.  Both internal and external factors can also have a significant effect on your forecasts.  Some of these factors are listed below under Factors That Affect Operating Costs.  As COO, you will help us determine which of these factors are important within your forecasts.

Expense projections created for the income statement will never function correctly without a reliable sales forecast.  COGS expenses are always related to the level of revenues generated.  Our process for forecasting sales (revenues) is unique.  An individual forecast is created for each of your Product Segments.  Each product segment will generally have different factors that affect their sales projections.  Some of these factors are listed on the Sales Executive page under Factors Affecting Sales RevenuesAlong with historical results, these external factors are used to create the forecast for each product segment.  Total sales revenues are simply the sum of all product segment revenues for a particular period.  The method by which COGS expenses are forecast are detailed on the Income Statement Forecast page under Forecasting Expenses for the Income Statement.

In addition to your budget, there are three distinct types of forecasts built and maintained within this business Model:

  • Forecast to end-of-year (updated monthly)
  • 36 month Forecast (original forecast)
  • Rolling Forecasts

 Executive Summary for Operations

One of the most important, best practice features of the Model are the comparisons presented on each Executive Summary.  Best in Class financial reporting is employed.  In an instant, you and everyone else can see how the Actual results compare:

  • To Budget       To Forecast     •  To the Same Period of the Prior Year

In addition, all reports are divided into segments that present results summarized for the:

  • Current Month  • Current Quarter  • Year-To-Date  • TTM (trailing 12 months)

Best Practices require that all information to be utilized by executives be presented within each specific report.  All of this best practices information in one Executive Summary provides the opportunity for improved understanding and communications.  The Executive Summary for Operations is presented in the lightbox below.

To view a larger image, click on the image.  To scroll through the images, use the arrow keys on each side of the image.

Operations Executives can gain a competitive advantage over their competition by seeing where growth and profitability are being developed. This Business Model is NOT an accounting package; it is a reporting and forecasting package for sales, operations and finance executives. Through the performance analytics built into the Model, you can truly gain that competitive advantage.

Forecasts To End-of-Year

To fully understand where you are headed, you need all this information.  You are constantly being asked "Where are we going to end up at year end?", "Are we going  to achieve our earnings forecast for the year?".  With this Model, you now have a realistic answer.

Your forecast to the end of year is based on your year-to-date results.  Forecasts to the end-of-year are automatically updated each month when the monthly results are posted.  There are 3 variations created for the end-of-year forecasts:

  • Actual results + Budget to end-of-year
    • (your actual results to date + budget projections for balance of year)
  • Actual results + Forecast to end-of-year
    •  (your actual results to date + forecast projections for balance of year)
  • Actual results + Change from Prior end-of year
    •  (your actual results to date + adjusted prior year results for balance of year)

Below is an example of this End of Year forecast.  It displays the summary income statement using all three variations defined above.  In the process of customizing your Model, you choose the level of detail displayed within this projection.

                  This is what a projection should do - TELL YOU WHERE YOU ARE HEADED!

Financial Performance Trends

As Chief Operating executive, the financial performance of the company is one of your primary responsibilities.  This business Model presents performance trends:

  • Based on annual growth (percentage growth in TTM results)
  • Based on 2 Year CAGR (Compound Annual Growth Rate)

An example of the year-over-year trends in growth from the financial statements is below.

36 Month Forecast

Your 36 month forecast is a product of many factors.  Your total revenue forecast is composed of individual forecasts created for each product segment.  In a mature company, product segments come and go.  This is typically a major issue when creating forecasts.  This Model assumes that your business is constantly changing; growing sales, improving margins and reducing costs can be accomplished in so many different methods.

Rolling Forecasts

A Rolling Forecast is the ideal method for keeping your projections up-to-date.  The rolling forecast projects 12 quarters ahead (3 years or 36 months).  Each monthly forecast is updated in this process.  This process also updates all prior assumptions and provides a realistic re-projection based on the most recent information.  In our fluid, ever-changing business environment, this is an absolute necessity IF KNOWING WHERE YOU ARE HEADED IS REALLY IMPORTANT!!  Rolling forecasts are designed to be updated at the end of each quarter.   

Trailing Twelve Month (TTM) Trends

One of the most important measures in reviewing performance is the TTM trend. This trend should be the executive's "best friend".  This trend is your guide to understanding Where You Have Been and most importantly, Where You Are Headed.    This trend is presented on all applicable reports and scorecards.  When the historical TTM trend is combined with the TTM projections, a clear visual picture is developed.  Look at the example graph below.


 Margin Analysis

This Model uses the EBITDA approach in the presentation of the income statement (AKA, profit & loss statement, i.e., P&L)EBITDA represents Earnings Before Interest, Taxes, Depreciation and Amortization.  EBITDA provides a common measure of profitability between companies by eliminating the effects of the asset base, goodwill, costs of debts and taxes.  EBITDA ignores changes in working capital, capex expenditures, interest and taxes.  EBITDA represents the Operational Profitability of a business.  

Throughout this company Model, all margins are expressed as a percentage of Net Income.  They represent the absorption of net revenues and the contribution to profits. These include:    •   Gross Profit Margin       •   Gross Margin
                                           •    Operating Margin          •    Net Margin

Gross Profit throughout the Model is the profit contribution after COGS expenses are subtracted from Net revenues.  Gross Margin is the profit contribution after Costs of Sales are subtracted from Gross Profit.  Operating Margin is simply EBITDA; it is calculated as Gross Margin less G&A costs.  Net Margin is simply Net Income; it is calculated as Operating Margin less all other costs on the income statement.  A complete section of the Executive Summary For Operations focuses on Margin Analysis.  To illustrate the change in margins over time, charts and graphs are used extensively throughout the Model.  An example of one chart below illustrates the margins earned over time based on a certain level of monthly revenues.

Balance Sheet Responsibilities

As COO, you also have certain balance sheet responsibilities.  These normally include Inventory, CAPEX and fixed assets.  Within your Executive Summary For Operations, these balances sheet accounts are summarized and analyzed; all within one report.  No more are you required to reference other financial statements simply to understand your areas of responsibility; everything under your responsibility is included in one report for improved understanding and communications.  As we tailor the contents of the Executive Summary For Operations to meet your specific needs, the balance sheet accounts you utilize to successfully manage your responsibilities are included.  Best Practice reports and chart formats are employed throughout the entire Model.   An example is below.

 Major Factors That Affect Operating Costs

Factors that influence your operating costs
are numerous.  As COO you will be responsible for assisting in the creation of the forecasts for this Model.  You know the basic factors that affect monthly operating costs.  Every company is different.  Some of the more common factors effecting monthly operating costs include:

  • Labor costs (generally one of the most important)
  • Material costs
  • Number of working days per month
  • Inventory changes
  • New product / service introductions
  • Economic conditions (local, SMSA, state, region, country)
  • Transportation costs
  • Vendor performance
  • Currency exchange rates

The list does not end.  Working together, we customize your operating forecasts; we discuss and create the list of factors that effect your costs.  Your forecasts will use these factors to assist in creating the 36 month forecast.  Where you have not maintained or identified precisely which factors affect product and services costs, you have the opportunity with this Model to begin collecting and maintaining this data for future use.


Through financial modeling Operations Executives can see where growth and profitability are being developed and where they need to be developed. This Business Model is NOT an accounting package; it is a reporting and forecasting package for sales, operations and finance executives. Through the performance analytics built into the Model, you can truly gain that competitive advantage.

To view how the Model integrates metrics into the Income Statement, click on this link to the Income Statement Forecasting page.  To view the metrics and performance analytics included within the Balance Sheet, clink on this link to the Balance Sheet Forecasting page.

This Model has been designed to show you where you are Headed.

Streamlining operating costs is a delicate and time-consuming process.  Forecasting the results of these changes  BEFORE they are implemented is one of the advantages of this Model. 

As COO - EVP, you can now have an affordable business model for managing operations like the Fortune 500.






To Order this Model TODAY, simply email to schedule a time to begin OR call 512-800-2458 to discuss your needs