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The figure below shows that the net sales for the first 12 months of the company. The net sales of the company will be at peak during July and August and December because of the seasonal sales.
The company will face gross loss in the first few months that is expected to increase after June because of increase in the sales volume. The gross profits of the company will be highest during July and December.
The company will face net loss before tax during the first half of its operations because the company will incur high expenses and generate low sales volume. The company will be generating lesser profits before taxes on the company that are predicted to improve during July to October and December. However, the declining trend during August to October is expected which will again rise in December.
The projection for three years will vary according to the performance of the company. For the first year and second year the company will face loss before taxes because the company will be incurring higher proportion of expenses due to which despite making gross profits the company will generate a net loss in the first two years. In year 3, the company is expected to have net income before tax.
The company will incur various expenses to start its business. The company will make major expenses for buying office software and technology, putting inventory for sale and setting up fixtures for the business. Also, other start up business expenses will be incurred to ensure that the business can meet its operational expenditures of business such as recruitment, consultation, advertisement, staff salaries, and office supplies.