STEP 3 -  FORECAST THE SALES PERCENTAGES FOR YOUR PRODUCT LINE

So far you have created a product line list and a list of all the products you plan to sell within each of your product lines. The next task is to assign sales percentages to your product line. In other words, you must forecast the rate at which you feel customers will purchase each product line. In our retail clothing store example, assume John assigns the following sales percentages to his product line:

SIX (6) SECTIONS OF THE INCOME STATEMENT:

Heading: ( first section of the income statement)

The heading outlines the name of the company, the type of statement that follows (in this case, the income statement) and the time frame of the statement. Here is the heading of the company TRY OUR BIKES.

TRY OUR BIKES
Income Statement
For the Period Ending August 31, 200X

LIQUIDITY RATIOS:

STEP 5   -  DETERMINE YOUR COST(S) FOR EACH PRODUCT

To this point, we have used only percentages as our major forecasting tool. Now its time to determine the cost of each product you plan to sell.