CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE-OPERATION
ITEM COST SH
License 15000
Advertising 16500
Recruitment 50000
Professional fee 18000
Installation 10000
Rent deposit 13000
Utility bills 13000
TOTAL AMOUNT 135500

5.2 PRO- FORMAR BALNCE SHEET

Youngster brilliant electrical and electronics spare parts Balance sheet as at 31st
December 2021
Assets liabilities& capital

Fixed asset sh long term liability sh

Land 500000 loan 463000

Tools 10000 debenture 200000

Office equipment 63500 bank overdraft 110500

Break down 200000

TOTAL 773500 TOTAL 773500

Current asset sh short term sh

Debtors 100000 creditor 250000

Stock 200000 loan 300000

Cash in hand 500000 actual 250000

Cash in bank 1000000 total 800000

Capital (financial) sh

Capital 1000000

TOTAL 1800000 TOTAL

1800000

TOTAL 2573500 2573500

5.3 WORKING CAPITAL
CURRENT ASSET SH CURRENT LIABILITIES SH

Debtors 100000 creditors 250000

Stock 200000 loans 300000

Cash in hand 500000 actuals 250000

Cash in bank 100000

TOTAL 1800000 TOTAL 800000

Working capital = 1800000-800000

= 1000000
 5.4 CASH FLOW PROJECTION
5.4.1 cash flow projection for The Year 2022
RECEIPTS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
RECEIVED
Loans 300000
Sales 100000 200000 260000 150000 300000 216000 200000 220000 270000 280000 250000 270000
Debtors 10000 30000 20000 60000 5000 7000 3000 3000 15000 2000 1000 2000
Discount 70000 50000 20000 60000 5000 3000 20000 10000 5000 10000 5000 20000
received
Payments
Purchase 190000 20000 40000 10000 15000 5000 2000 5000 2800 30000 10000 15000
Salaries/wages 190000 1900000 1900000 190000 190000 1900000 1900000 190000 190000 1900000 190000 1900000
0 0 0 0 0 0
Creditors 10000 10000 5000 10000 5000 5000 10000 20000 10000 5000 10000 15000
Discount 5000 5000 5000 5000 10000 5000 10000 5000 10000 20000 15000 10000
allowed
Cash flow 40000 20000 18000 30000 110000 90000 20000 50000 50000 70000 60000 80000
projection
Balance 560000 600000 620000 638000 778000 868000 888000 928000 978000 1048000 668000 1108000
brought down
Balanced 600000 620000 638000 668000 778000 868000 888000 928000 978000 1048000 110800 1188000
carried down 0
 5.4.2 Cash Flow for the year 2023
RECEIPT(RECEIVED JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
)
LOANS 20000
SALES 100000 32000 21300 20000 30000 25000 20000 22000 25000 27000 260000 280000
0 0 0 0 0 0 0 0 0
DEBTORS 40000 10000 5000 20000 30000 40000 20000 25000 20000 20000 10000 10000
DISCOUNT 15000 5000 10000 20000 10000 10000 10000 5000 10000 10000 20000 10000
0 0
PAYMENT
PURCHASE 110000 11000 10000 10000 10000 20000 10000 50000 10000 10000 20000 5000
0 0
SALARIES/ WAGES 190000 19000 19000 19000 19000 19000 19000 19000 19000 19000 190000 190000
0 0 0 0 0 0 0 0 0
CREDITORS 10000 10000 5000 5000 10000 20000 10000 5000 20000 10000 50000 150000
DISCOUNT 8000 5000 5000 10000 5000 5000 10000 20000 10000 20000 15000 10000
ALLOWED
CASHFLOW 4000 50000 4000 5000 20000 5000 4000 20000 30000 40000 50000 20000
PROJECTION
BALANCE 40000 20000 18000 3000 11000 90000 20000 40000 50000 70000 60000 80000
BROUGHT DOWN 0 0
BALANCE CARRIED 560000 60000 62000 63800 66800 77800 86800 88800 96800 49800 104800 110800
DOWN 0 0 0 0 0 0 0 0 0 0 0
 5.4.3 Cash Flow for the year 2024
Receipt(receive JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
d)
Loans 30000
Sales 9500 2150 2500 2000 3000 4000 3500 3000 3000 4000 41000 3500
Debtors 10000 5000 10000 50000 1000 2000 1000 2000 5000 2000 3000 2500
Discount 5000 1500 1000 2000 1000 5000 10000 1000 5000 10000 10000 1000
received
Payment
Purchases 10000 5000 10000 5000 2000 10000 3000 3000 4100 4000 3500 10000
Salaries/ wages 250000 250000 250000 250000 250000 250000 250000 250000 250000 250000 250000 250000
Creditors 10000 5000 5000 1000 2000 10000 3000 10000 10000 3000 4000 10000
Discount 10000 5000 5000 10000 5000 10000 5000 5000 20000 20000 50000 50000
allowed
Cash flow 40000 1500 4000 50000 30000 1100 7000 5000 5000 9000 10000 10000
projection
Balance brought 118800 122800 124300 128300 128800 131800 142800 149800 154800 159800 168800 178800
down 0 0 0 0 0 0 0 0 0 0 0 0
Balance carried 122800 128300 124300 131800 142800 149800 152800 155800 159800 168800 178800 188800
down 0 0 0 0 0 0 0 0 0 0 0 0
5.5 PRO- FORMA INCOME STATEMENT
YEAR 1 YEAR 2 YEAR 3

SALES 2676000 2863000 3570000

COST OF SALES 298000 325000 250000

DOWN

GROSS PROFIT BROUGHT 2378000 4916000

TOTAL 2378000 4916000 8236000

EXPENSES YEAR 1 YEAR 2 YEAR 3

SALARIES AND WAGES 2280000 2280000 3000000

RENT

ELECTRICITY 10000 50000 100000

WATER 10000 50000 100000

TOTAL EXPENCES 2300000 2380000 3200000

NET PROFIT 78000 2536000 5036000

TAX 16% 124080 405760 805760

5.6 BREAK EVEN ANALYSIS
Break even points = fixed costs
Contribution per unit

= 200000
200
= 1000

Breakeven point in value = fixed costs x selling price

Contribution per unit

= 200000 x 500
200
= 500000

Contribution ratio = contribution per unit x 100

Selling price

= 200 x 100
500
= 40

Number of units = fixed cost+ target profit

Contribution per unit

= 200000 + 50
2000
= 1000.25

Sales for target profit = (fixed costs + target profit)

Selling price
= 200050 x 10
500
= 4001
5.7 DESIRED FINANCING
ITEM COST

Pre operation cost 135500

Working capital 1000000

Fixed assets 773500

TOTAL 1909000

5.8 CAPITALIZATION
ITEM COST

Owners contribution 5000000

Borrowed 800000

5800000

5.9 PROFITABILITY RATIO

Gross profit ratio = gross profit x 1000
Sales

= 3320000 x 100
250000
= 1328

Net profit ratio = net profit x 1000

Owners’ equity

= 5036000 x 100
100000 +5036000
= 5036000 x 100
6036000
= 83.4

Asset. Turnover = total sales

 Assets

= 357000
2573500
= 1.4

Quick duration = current asset – closing stock

Current liabilities

= 1800000 - 200000
800000
=2

Limpidity ration = current asset

Current liability

= 1800000
8000000
= 2.25