A website consultancy generates profits by charging 2-3x what it costs to produce a website. For the sake of this model, consider that websites take about three months to produce (which is over-simplified for the sake of the model — all websites and clients are different). Notice when you reduce from four projects per quarter to three (cell B7), profits become dangerously low, so this model tells you how many website contracts per quarter you need to sell to create a healthy consulting business. Businesses are never as clean as their models – some months you’ll close three new contracts at once and then you’ll go many months with none. This model illustrates one possible scenario around expenses, cost, and cash flow, reminding you to save funds on good months so you can cover expenses in months when there are no checks coming in.
I recommend that you use the Rubric to complete Week 4 and Week 8 Assignment.
Please review and analyze the Financial Statement Model and explain each component in Dark Blue Such as % Growth per month, Revenue, Expenses, Operating Cash Flow, etc. Please review the Sample Financial Statement as a reference.
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