Terran Mining Corporation

Financial forecast and model


A basic percentage of sales model to forecast an income statement and balance sheet for Terran Mining Corporation (TMC).

This is a simple spreadsheet which will accept and calculate a wide range of values including negative interest rates and even a tax rate over 100%.
I leave it up to you. Please read the notes for book entry clarifications!


Model inputs (edit value boxes):

Warning! As with all forecasting approaches, the percentage of sales model has limitations - inputting extreme values may make the results meaningless.

Item Value Description
Sales growth rate 10 (%) Rate at which sales revenue will grow each year.
Dominion tax rate 30 (%) Anticipated Dominion government tax rate.
Interest rate 9.5 (%) Interest rate on debt and loans.
Payout ratio 25 (%) Amount of net income paid out as dividends.



Income Statement Forecast

All figures in thousands of credits

Year 0 Year 1 Year 2 Year 3
Income Statement 2481 2482 2483 2484
Mineral sales revenue 9,531 - - -
Mining operating expenses:
          SCV salaries and wages* 4,660 - - -
          Building repair/maintenance 586 - - -
          Security unit upkeep 1,420 - - -
Research & development expenses 975 - - -
General & administrative expenses** 850 - - -
Depreciation expense*** 221 - - -
Operating income 819 - - -
Interest expense 285 - - -
Income before Dominion taxes 534 - - -
Dominion tax expense**** 160.2 - - -
Net income 373.8 - - -
Dividends 93.45 - - -
Addn. to retained earnings 208.35 - - -

Notes:
* SCVs need to eat too!
** Covers administration and usage costs of the command center.
*** MULEs that expire after their limited battery lives are recorded as equipment depreciation expense.
**** Regardless of tax rate, the tax expense will be 0 if TMC is making an operating loss. It is also assumed that TMC will not pay dividends if they have a negative net income.

Balance Sheet Forecast

All figures in thousands of credits

Year 0 Year 1 Year 2 Year 3
Balance Sheet 2481 2482 2483 2484
Assets
Current assets:
          Credit chips* 650 - - -
          Accounts receivable 83.65 - - -
          Total current assets 733.65 - - -
Property, plant, and equipment 3,606.7 - - -
Total assets 4,340.35 - - -
Liabilities
Current liabilities:
          Accounts payable 83 - - -
          Accrued expenses payable 549 - - -
          Total current liabilities 632 - - -
Notes payable** 3,000 - - -
Total liabilities 3,632 - - -
Stockholders' equity:
          Common stock (0.01 credits par) 500 - - -
          Retained earnings 208.35 - - -
          Total stockholders' equity 708.35 - - -
Total liabilities & stockholders' equity 4,340.35 - - -
Required external financing*** 0

Notes:
* Sometimes referred to as "cash".
** The balancing item, increases by required external financing. If no external financing is required, balance decreases to reflect company's decision to pay off long-term debt.
*** A "negative" external financing requirement suggests that internal growth is sufficient. Otherwise, possible sources of funding include various banks and the Moebius Foundation.