From the course: Financial Analysis: Making Business Projections

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The exit methodology

The exit methodology - Microsoft Excel Tutorial

From the course: Financial Analysis: Making Business Projections

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The exit methodology

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- The second methodology is even simpler to calculate. It is based on the performance you've been having since the beginning of the year, and compares it to your performance the previous year. If, for example, you're at the beginning of May and have generated $400,000 worth of revenue, with this methodology you will want to compare it to how we performed last year at the same time and compare it to where we actually finished the same year. So, if for example, last year we generated $300,000 of revenue by that time of the year, and the year finished at 1.2 million dollars of revenue for the full year, then we would simply calculate that we have generated 25 percent of our revenue by the end of April by dividing 300,000 by 1.2 million dollars. Then, we would simply assume that whatever we generated this year by the end of April, would be equal to 25 percent of the full year. So in this case, since we have generated $400,000 by the end of April, and this is supposed to represent 25…

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