From the course: Financial Analysis: Making Business Projections
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Projecting gross margin and OPEX - Microsoft Excel Tutorial
From the course: Financial Analysis: Making Business Projections
Projecting gross margin and OPEX
- Now that we have a projection of our revenue we need to add to it a gross margin and opex element in order to have a complete view of our P and L. To do so, for the top down view, we will simply assume that we will remain on the same levels that we have seen in the past. For both gross margin and opex we first need to calculate what each represents as a percentage of the revenue of the same period. To do so, we simply need to divide gross margin by revenue, and opex by revenue. If, for example, we have generated $25,000 worth of gross margin for $100,000 of revenue, then our gross margin percentage will be equal to 25 percent. And similarly, during the same period of time, we have spent $20,000 worth of opex, then we would have 20 percent of revenue there. Once those figures have been calculated we simply need to apply them to our revenue projection. If we take our previous revenue projection example, we projected a revenue of 1.6 million dollars for the year. Based on the above…
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