CPA Services Market

Analysis by Cynosure
Consulting, LLC
Projected Financial Statements as of June 7, 2016,
Independent Consultants Report

CYNOSURE CONSULTING, LLC

TABLE OF CONTENTS

Page
INDEPENDENT CONSULT ANTS REPORT

34

FINANCIAL PROJECTIONS AS OF JUNE 7, 2016

Debt to Equity Profile

Projected Net Income

Total Debt Profile

General Business Considerations

References

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SUMMARY OF CONTENTS
The forecast of the balance sheet and income statement items are presented here and are based on industry trends and circumstances unique to your
business. We utilized the best industrial data available to us to provide insight on what kind of results can be expected from your company based
on your investment or assumptions provided to us by you. We rely on data from companies that have been in operation for multiple years and are
comparable in size. As such, your actual financial results may vary as your company will be a startup and will be in its first year of operation and
will takes time to develop and reach the financial results of your competitors. However, note that based on the data that you provide to us, these
projection can serve as a benchmark to help you assess if your Company is operating as efficiently, worse or better than your competitors.
To help you understand the results that you can expect once your Company begins its operations, we have prepared projections of certain balance
sheet and income statement items. These statements are important for you as a business owner as they contain vital information about your
business that will be useful for you, potential lenders and creditors, as well as use them to get a good sense of whether your business is financially
healthy or headed for trouble. A brief summary of each type of statement is presented below to help you understand their importance and how to
read them.
BALANCE SHEET
A businesss balance sheet is a detailed list of its assets, liabilities (or money owed by the business), and the value of the shareholders equity (or
net worth of the business) at a specific point in time. Assets are anything of value owned by the business; liabilities are debts owed to outside
creditors or other parties; and shareholders equity is the amount owed to the business owners.
The balance sheet provides a picture of the financial health of a business at a given moment in time usually the end of a month or financial year.
It can tell you if you owe more money than what you currently have, the current value of your assets and the overall value of your business.
More importantly, if you familiarize yourself with using financial ratios, the balance sheet can provide critical data to assist with informed decision
making. The balance sheet is a vital financial statement you should be reviewing regularly, as it changes with every transaction.[3]
In our report we provide users with key items from the balance sheet along with key ratios including:
1. Equity (Provided by you)
2. Debt/Liabilities including Current and Non-Current liabilities
3. Debt to Equity Ratio

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INCOME STATEMENT
The income statement is important because it shows the profitability of a company. Businesses pay attention to the profitability of a company for
many reasons. For example, if a company was not able to operate profitablythe bottom line of the income statement indicates a net lossa
banker/lender/creditor or you may be hesitant to extend/invest additional capital into the company. On the other hand, a company that has operated
profitablythe bottom line of the income statement indicates a net income demonstrated its ability to use borrowed and invested funds in a
successful manner. A company's ability to operate profitably is important to yourself, current lenders and investors, potential lenders and investors,
competitors, and government agencies. [2]
In our report we provide users with key income statement projections including:
1. Sales
2. Expenses
3. Earnings before income tax (EBIT)
4. Net Income
5. Profit Margins

DISCLAIMER REGARDING INDEPENDENT CONSULTANTS FINANCIAL PROJECTIONS

This report includes forecasts, projections and other predictive statements that represent Cynosure Consultings assumptions and expectations in
light of currently available market information. The forecasts and information included herein this report are based on industry trends and
circumstances unique to the client, as such, they involve risks, variables and uncertainties. Further, the results are highly dependent on information
provided by the client. As such, The Companys (Client Name) actual performance results may differ from those projected herein this report.
Consequently, the Preparer (Cynosure Consulting) does not guarantee the accuracy of projected or implied forecasts, projections, or predictive
statements contained herein.

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Equity: Your total investment or ownership into the business

Debt: Consist of total liabilities that you would typically owe your vendors, banks, government, and employees based on the size of your business.
Equity to Debt Ratio: The amount of equity in this line of business at $50,000 of investment is generally 16%. The above chart indicates that once
your business is up and running, it can expect to have $312,500 in assets, of which debt will account for $262,500 (84%) while your ownership will
account for $50,000 (16%).

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Sales: Based on your initial investment, the amount of sales that a company in your line of business would typically achieve.
Expenses: Your expenses consist of costs required to operate your business, including cost of your services, salaries, office rent, cost of supplies etc. Note that
the operating expenses includes salaries to owners and partners. In your company's case, your competitors typically payout $147,000 in salaries to themselves.
EBIT: Represents Earnings Before Interest and Taxes (EBIT), basically your income before you have to pay tax
Net Income: The amount of money that you get to keep from your business, this can be used to increase payments to self or they can be used to pay off the
company's short term and long term debt. In addition, these earning can be reinvested to expand your business.

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Equity: Your total investment or ownership into the business

Debt: Consist of total liabilities that you would typically owe your vendors, banks, government, and employees based on the size of your business.
Equity to Debt Ratio: The amount of equity in this line of business at $50,000 of investment is generally 16%. The above chart indicates that once
your business is up and running, it can expect to have $312,500 in assets, of which debt will account for $262,500 (84%) while your ownership will
account for $50,000 (16%).

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GENERAL BUSINESS CONSIDERATIONS

1.

START UP BUSINESS FAILURE RATES BY INDUSTRY[1]

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REFERENCES
[1] "Statistic Brain." Statistic Brain. N.p., n.d. Web. 20 June 2016.
[2] "Income Statement (Profit and Loss Statement) | Explanation | AccountingCoach." AccountingCoach.com. N.p., n.d. Web. 20 June 2016
[3] Barned, Jan. "Why Is the Balance Sheet Important? - The Pulse Australia." The Pulse Australia. N.p., 19 June 2015. Web. 20 June 2016.

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