Cost Estimation & Budget Plan - KU-SKE17/Software-Process GitHub Wiki

• Assets & Income
  • Balance Sheet
  • Income Statement
  • Company vs Individual Spending
  • Depreciation vs Amortization
• Budget Planning

Assets = Liabilities + Equity

• Assets (Resources of the business, cash)
• Liabilities (credit, in debt item)
• Equity (object) = Net Asset, Net Worth, Capital

Company Income -> Revenues

Revenues = Price per Unit * Unit Sold

• Revenues Unit -> Income/Revenue

Revenues - CoGS = Gross Profit

• CoGS (Cost of Good Sold) -> Production Cost (raw material, shipment cost)
• Gross Profit -> Gross Margin

Gross Profit - Operating Expenses = Operating Profit

• Operating Expenses -> Selling, General and Admin (SG&A) (business, rent, salaries)
• Operating Profit/Income -> represents the pretax income earned (or loss) from the core operations of the business

+ Operating Profit = Income before Interest & Taxes

• Operating Profit -> Other income and expense

Operating Profit - Non-Operating Expenses = Net Profit

• Non-Operating Expenses -> Income Taxes, EBITDA (Earning Before Interest, Taxes, Depreciation & Amortization)
• Net Profit -> Net Income/Lost, Bottom Line

• Depreciation

  • Method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.
  • Straight Line Depreciation Method (example)

    Current Price of Asset = (Purchase Price of Asset - Approximate Salvage) % Estimated Useful Lift of Asset
    

  • Note.
    • ค่าเสื่อมราคา -> คิดจากสินทรัพย์ที่ 'มีตัวตน'
    • เช่น พวกที่ดิน อาคาร อุปกรณ์

• Amortization

  • Method of reducing the cost of an intangible asset over a specified period of time.
  • Also, a way of paying off a debt by spreading payments
  • Note.
    • ค่าตัดจำหน่าย -> คิดจากสินทรัพย์ที่ 'ไม่มีตัวตน'
    • เช่น สิทธิการเช่า ลิขสิทธิ์

=================== ไปอ่านสไลด์เถอะ ===================

• Predict Income

• Calculate Budget

  1. Estimate Required Assets (Cost)

     • Estimate Depreciation Period (i.e. 5 Years)
     • Estimate annual Maintenance Fee (i.e. 10%++)

  2. Estimate Earning Capability (Unit)

     • The number of units that you can shift to the market per year.

  3. Estimate Production Cost

  4. Estimate Operation Cost

     • Estimate Sale & Marketing Fee
     • Estimate Human Resource Cost (Salary, Bonus, Personal Expense)
     • Estimate Salary Increase (10%)

• Thinking About Procurement

• Income Statement Plan (Benefits & ROI)

  find Net Profit per year

  Income
  - Production Cost = Gross Profit
  - Operation Cost = Operation Income
  + Other Income = Income before Interest & Tax
  - Interest
  - Tax
  = Net Income
  

  Good Investment should be sufficient to cover

  1. Estimated Required Equipment
  2. First Year Cost (Exclude Depreciation)

  In conclusion, it should be available to provide sufficient Cash Flow

  ROI (Return Of Investment)

  "ROI within <NUMBER> years if Investment = <AMOUNT_OF_MONEY>"