Financial Plan
This is the third major section of the business plan.
You will provide the reader of your business plan with financial documents that will demonstrate how the money will be spent, how this will improve your business, how the loan will be repaid.
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Write My Essay For MeFinancial Plan
Historic Statements
Statements of Sources and Uses of Funds
Pro Forma Statements
Financial Statement Analysis
This is in a different order than the textbook because you don’t actually have a company, so you need to create the historic statements first.
Financial Plan
Historic Statements
Prepare spreadsheet of three years of operations (2017 – 2019).
Balance sheet – Excel or page 357 has a form
Income statement – Excel or page 359 has a form
Pages 100 – 111 in the textbook.
If your business is a start-up you can skip this part and move on to the Statement of Sources and Uses.
Financial Plan
Historic Statements
Statements of Sources and Uses of Funds
Pro Forma Statements
Financial Statement Analysis
Financial Plan
Statements of Sources and Uses of Funds
Source of Funds: Anything that increase money in a business
Uses of Funds: Anything that decreases money in a business
Financial Plan
Statements of Sources and Uses of Funds
Accounts Receivable goes up (from $2,000,000 to $3,000,000).
Is this a source or use of funds?
Financial Plan
Statements of Sources and Uses of Funds
Your company borrows $4,000,000 from the bank.
Is this a source or use of funds?
Financial Plan
Statements of Sources and Uses of Funds
Accounts Payable goes up (from $1,000,000 to $1,500,000).
Inventory goes down (from $20,000,000 to $18,500,000).
Equipment increases by $3,000,000.
Are these sources or uses of funds?
Financial Plan
Statements of Sources and Uses of Funds
Summary of Financial Needs
Loan Fund Dispersal Statement
These are 2 written paragraphs in the business plan.
Pages 81 – 82 in the textbook.
Financial Plan
Statements of Sources and Uses of Funds
Summary of Financial Needs
Why do you need a loan or investment funds?
How much capital do you need?
Working capital: Short-term loan used for temporary cash flow shortages. Repaid with cash flow.
Growth capital: Loan used to improve the business. Demonstrate an increase in cash flow/profits that will be used to repay the loan over time.
Equity capital: Permanent capital from investor seeking a return (dividends or capital gains). Uses of this capital are permanent.
Financial Plan
Statements of Sources and Uses of Funds
Summary of Financial Needs
Loan Fund Dispersal Statement
These are 2 written paragraphs in the business plan.
Pages 81 – 82 in the textbook.
Financial Plan
Statements of Sources and Uses of Funds
2. Loan Fund Dispersal Statement
How will the funds be used (expansion, marketing, equipment purchase, research and development, acquisition)?
Be specific. Detail the use and what it will do for the company. Explain how this will increase/improve the company.
Financial Plan
Historic Statements
Statements of Sources and Uses of Funds
Pro Forma Statements
Financial Statement Analysis
Financial Plan
Pro Forma Statements
Cash Out & Sources of Cash Worksheets
Pro Forma Balance Sheet
Pro Forma Cash Flow Statement (Budget)
Three-Year Income Projection
Break-Even Analysis
Pages 83 – 99 in the textbook.
Financial Plan
Pro Forma Statements
Cash Out & Sources of Cash Worksheets
Use the forms on page 351 and 352
Pro Forma Balance Sheet
Use the form on page 357 – show 2 – 3 FYE’s
Pro Forma Cash Flow Statement (Budget)
Use the form on page 353 – but change this to 2 – 3 year, don’t do monthly
Three-Year Income Projection
Use the form on page 355
Break-Even Analysis
Use the form on page 356
Financial Plan
Historic Statements
Statements of Sources and Uses of Funds
Pro Forma Statements
Financial Statement Analysis
Financial Plan
Financial Statement Analysis
Pages 112 – 118 in the textbook.
Focus on:
Net Working Capital and Current Ratio – liquidity
Gross Profit Margin – mark-up
Debt to Equity Ratio – leverage
ROI – how successful is your business
Financial Plan
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