Let’s Analyze and Adjust a
Small Business Budget
“Green Thumb” Landscaping Business
Monthly Budget
Directions:
First, calculate the Costs Total, Revenue, Profit,
and monthly credit card payment. For numbers
1-7, explain how each event affects the budget
monetarily. After you have adjusted your budget
based on the following events, explain the affect
it had on your Costs Total, Revenue, and Profit.
Finally, would you make any adjustments? Why
or why not?
How to Calculate Costs Total
Costs total equals the sum of all five
categories. We will use functions to
perform this tasks like we did in lesson 3.
1) Watch me use the function then 2) copy
the totals on your worksheet.
How to Calculate Costs Total
Select the cost cell next to Costs Total
Select sum under the function drop down
menu
Select the cost cell next to the Personnel
Total
Hold the Ctrl button and select the four
remaining category totals
Hit Enter
How to Calculate Revenue
For this assignment we will calculate our revenue by
multiplying our cost by 150%.
Select the cost cell next to Revenue
Select product under the function drop
down menu
Select the cost cell next to Costs Total
for Number1
Enter 1.5 for Number2
Click Ok
How to Calculate Profit
Profit = Revenue – Costs
To do this task, use the SUM function.
Adding a negative number is the same
as subtracting. Note: There is
no SUBTRACT function in Excel. Use the
SUM function and convert any numbers
that you want to subtract to their negative
values.
How to Calculate Profit
Select the cost cell next to Profit
Select sum under the function drop down
menu
Select the cost cell next to Revenue
Place a comma after the cell name (E13)
and type –E11 (the cell name for the Costs
Total)
Hit Enter
How to Calculate Credit Card
PYMT
Equipment monthly min. pymt. on credit card is
5% of balance @ 14% interest.
*Monthly budget allows for double payments.
$1,435.00 x 5% = $71.75
$71.75 x 14% = $10.05
$71.75 + $10.05 = $81.80
$81.80 x 2 = $163.60
1) Your business is great! As
result of your hard work, your
Profit is consistently
increasing by 2.5 percent
every other month. What will
your monthly profit be in 6
months (two increases)?
In 6 months (two increases) the
profit will be $1,310.98
$1,247.80 X 2.5% = $31.20
$1,247.80 + 31.20 = $1,279.00
$1,279.00 X 2.5% = $31.98
$1,279.00 + 31.98 =$1,310.98
2. This month your Gas (Travel)
expenses doubled.
As a result of the gas expenses doubling
this month, my overall travel expenses
increased to $685.00, reducing my profit
to $1,147.80.
3. Both of your Employees are due
for a 10% raise this month.
The 10% raise increased my personnel
cost from $1,360.00 to $1,496.00. This
caused a $136.00 decrease in profit.
4.There was a 30% increase this
month for your Facility cost.
The 30% increase in facility cost is $75.00.
This also caused cost to increase and
profit to decrease.
5.You were a victim of theft. You have to
replace three of your least expensive
pieces of Equipment.
The three least expensive pieces of
equipment are a push broom ($25), rake
(22.50), and garden hoe ($15.00). The total
cost for replacement is $62.50, increasing
the equipment total from $1,435.00 to
$1,497.50. This also increased the
minimum monthly credit card payment by
$7.12 to $170.72.
6) Your Materials expenses were
12% cheaper this month.
A 12% deduction in materials amounts to
$16.44 which will decrease costs total and
increase profit.
7) Recalculate your budget based on the previous events here then
explain the affect they had on your Costs Total, Revenue, and
Profit. Calculate your current revenue and profit based on your
previous costs total adjusting for the recent expenses.
Previous
Current
Costs Total = $2,495.60
Costs Total = $2,952.66
Revenue = $3,743.40
Revenue = $3,743.40
Profit = $1,247.80
Profit = $790.74
8) Would you make any adjustments? Why or
why not?
As a result of the profits decreasing
significantly (-$357.06), I would not
continue to make double credit card
payments. The smaller profit margin
increases risk if more unforeseen events
arise. If next month is stable I will restart
double payments. I will also look at ways
to lower gas costs and look for a cheaper
storage (Facility).