Reference no: EM131794588

Kristin Raina Interior Designs has decided to request a bank loan to expand her business and the lender has asked for a one-year projection of revenue and expenses. In order to request the loan, you will need to create a Pro Forma one year budgeted income statement broken down over 12 months. You will need to take a look at the actual ending financial statements for February, March and April and use this data to help create the forecast for the next fiscal year of business.

For this project, you can assume that the company is expanding the business for any reason, however below are some possible options for seeking out a loan. You can use one of these options or create a unique creative alternative for expansion in building the one-year pro forma budgeted income statement:

Option 1: Kristin has decided to do a build out of a leased location.

Option 2: Kristin has decided to purchase a physical location for her business.

Option 3: A combination of the above or any other creatively unique expansion/company growth idea (consider a new product or new product line for example).

Keep in mind the request should be financially manageable and make sure to look ahead to next week's module where this budget will be the foundation for a presentation that uses financial ratios to demonstrate why the amount of the loan is manageable and why it is a good investment in light of the strengths and weakness of the company. Using financial ratios will be critical in supporting your argument and be aware that most bankers or lenders will not even consider a loan prospect without addressing, for example, the impact of additional debt on your debt to equity ratio.