A budget that starts from the signed S&OP plan

Illustrative figures.

Next year’s budget for the same supplier, built month by month: revenue, cost of goods and stock from the signed plan in “Next year’s S&OP plan, in money”, working capital from payment and purchase terms, operating costs from each cost-centre owner. Laundry capsules at Retailer A, the pair these examples follow: 158 thousand cases, 4,980 thousand euros of net-net sales and a margin of 17.5%, against 12.2% this year.

The headline

Gross margin of 11,471 thousand euros comes straight from the plan, and EBIT is 2,906 thousand against 2,153 this year. The balance sheet balances and the cash reconciles.

Budget P&L

EUR thousandThis yearBudgetChange
Cases sold, thousand2,2002,248+48
Sales at list price61,65364,596+2,943
On-invoice discounts−5,060−5,310−250
Off-invoice trade terms−6,642−6,494+148
Net-net sales49,95152,792+2,841
Cost of goods−39,702−41,321−1,619
Gross margin, from the plan10,24911,471+1,222
Logistics and warehousing−2,646−2,735−89
Sales team−1,400−1,480−80
Consumer marketing−1,250−1,420−170
Administration−1,700−1,780−80
EBITDA3,2534,056+803
Depreciation−1,100−1,150−50
EBIT2,1532,906+753
Interest−330−275+55
Tax−365−526−161
Net profit1,4582,105+647

From the plan’s gross margin to EBIT

02,0004,0006,0008,00010,00012,000EUR thousand11,471Grossmargin−2,735Logistics−1,480Salesteam−1,420Marketing−1,780Admin−1,150Depreciation2,906EBIT
04,0008,00012,000EUR thousandGross margin11,471Logistics−2,735Sales team−1,480Marketing−1,420Admin−1,780Depreciation−1,150EBIT2,906

Balance sheet

EUR thousandEnd of this yearEnd of budget year
Fixed assets8,5008,850
Stock4,9155,122
Trade receivables7,6978,060
Cash1,9001,674
Total assets23,01223,706
Trade payables3,4633,612
Trade terms owed to retailers2,6702,710
Bank loan6,0005,000
Equity10,87912,384
Total liabilities and equity23,01223,706
Check: assets less liabilities and equity00

Cash flow

EUR thousandBudget year
Net profit+2,105
Depreciation+1,150
Stock−207
Trade receivables−363
Trade payables+149
Trade terms owed+40
Cash from operations2,874
Capital spending−1,500
Bank loan repaid−1,000
Dividend−600
Change in cash−226
Cash at the start1,900
Cash at the end1,674
Check: cash at the end less balance-sheet cash0

Five sign-offs, then the lock

PlannerCost-centre plannersSigned 24 Nov
Department headEach departmentSigned 27 Nov
ControllerFinancial controllerSigned 2 Dec
CFOFinance directorSigned 4 Dec
CEOManaging directorSigned 9 Dec

Locked on 9 December: the S&OP plan it starts from is signed, the balance sheet balances and the cash reconciles.

What the figures say

Nothing typed twice

Net-net sales of 52,792 and gross margin of 11,471 thousand euros are the signed plan’s own figures, priced through each retailer’s terms. Stock follows the supply plan.

Working capital from terms

Receivables and payables follow payment terms, and volume rebates are owed until they are paid, the year after, in March.

Cash pays for the year

Cash from operations of 2,874 thousand pays for 1,500 of capital spending, 1,000 of the bank loan and a 600 dividend, so cash ends the year 226 lower, at 1,674.

Key tables export to Excel with their formulas. Illustrative figures. Stock is held at 1.4 to 1.9 months of cost of goods; materials are 65% of cost of goods and are paid two months after purchase; promotion funding and display fees are paid two months after they are earned. Interest 5% on the bank loan, tax 20%.

Built on your own sales data and ledger.

Download this example as a one-page PDF Want this on your own figures? Write to us

Write to us

Tell us your business need, or ask for a worked example on your figures — we want to hear it.

Or email support@mistlight.eu