Financial Section Of a Business Plan

Income Projection Statement

Income Projection Statement: ExxonMobil’s income projection statement shows that the company expects to make $37,650,000 in net income for its 2021 fiscal year. This figure is up from $33,150,000 in 2020, which increased from $29,170,000 in 2019. This trend of increasing profitability is expected to continue into 2022; this document assumes a net profit of $40,680,000 for that year.

Forecasted 12-Month Profit and Loss Statement

ExxonMobil’s forecasted 12-month profit and loss statement shows they expect to have revenues of $539 billion during their 2021 fiscal year. They also expect to spend $555 billion on expenses during this period. These figures are higher than in previous years; ExxonMobil’s 2020 revenues were $512 billion, and its 2020 expenses were $535 billion (ExxonMobil).

 4-Year Profit and Loss Projection

Exxon Mobil Corporation (ExxonMobil) has a healthy balance sheet, with positive net worth and current ratio. The company’s long-term debt is manageable, but its sales will need to increase by 5% each year for the next four years to achieve its goal of $40 billion in net income by 2021. The company plans to implement several cost-saving measures and increase production to reach this goal.

Sales Forecast

ExxonMobil’s sales have steadily increased since 2018, with most of their growth coming from the United States and China. While they expect their sales to continue increasing in these countries, they also expect that other countries will begin purchasing more oil.

Cash Flow Projection

The company’s cash flow projection shows a negative net cash flow balance of $10,000,000 in 2021. The company is projecting an increase in working capital of $4,000,000 and an increase in inventory of $8,000,000. This will be offset by a decrease in accounts receivable of $2,000,000 and a decrease in short-term investments of $6,000,000. This will result in a negative net cash flow balance of $10,000,000 for 2021.

The projected balance sheet, income statement, and cash flow statement for the next three years 

The company’s balance sheet is a snapshot of the company’s assets and liabilities on a particular day. The total assets are $1.9 trillion, while the total liabilities are $900 billion. The current ratio is 2.17, which means that the company has 2 dollars in assets for every dollar of liabilities it has on its books.

Regarding revenue projections, ExxonMobil expects to bring in $579 billion in revenue during 2021, up from $556 billion in 2020. Regarding net income projections, ExxonMobil expects to earn $44 billion during 2021, up from $36 billion in 2020.

Regarding operating cash flow projections, ExxonMobil expects to generate $84 billion in 2021, an increase from the $73 billion generated in 2020.

 Payback calculation

Payback calculation determines the amount of time it takes for an investment to pay itself back. It measures how long it takes for the income generated to cover all costs.

The Exxon Mobil Corporation 2021 Annual Report states that its total operating costs are $16.5 billion, and its net income is $41 billion. Taking these numbers into consideration, we can use the formula for Payback Calculation:

Payback Calculation = Net Income / Total Operating Cost

$41,000,000,000 / $16,500,000,000 = 2.1 Years (or 1120 Days)

This means that it would take 2.1 years for Exxon Mobil Corporation to generate enough income to cover its operating costs and return a profit.