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Financial Plan2

Total capital requirements include fixed assets, pre-operating expenses, and working capital. The document determines if a loan is needed to finance the total capital required. It also identifies what security can be provided to a bank. Unit selling price is calculated to determine expected sales and profit. Cash flow, profit/loss, and balance sheet statements are analyzed. Return on investment and break-even point are calculated. Feasibility of the project is determined by assessing profitability, supply issues, and impacts of unrealized sales forecasts.

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raazoo19
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40 views6 pages

Financial Plan2

Total capital requirements include fixed assets, pre-operating expenses, and working capital. The document determines if a loan is needed to finance the total capital required. It also identifies what security can be provided to a bank. Unit selling price is calculated to determine expected sales and profit. Cash flow, profit/loss, and balance sheet statements are analyzed. Return on investment and break-even point are calculated. Feasibility of the project is determined by assessing profitability, supply issues, and impacts of unrealized sales forecasts.

Uploaded by

raazoo19
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Financial plan

What is the total capital requirement


Is loan needed
What security can be given to bank
What is unit selling price of the
product
What does profit and loss statement
indicate
What does the cash flow statement
indicate
What does balance sheet indicate
What is break even point
What is the return on investment (ROI)
Is the project feasible

Total capital requirement

Total capital requirement is


composed of three items:
Fixed

assets: building, machinery,


furniture, fixtures , etc.
Pre-operating expenses: these
include registration fees, training
cost, cost of preparing business
plan, etc.
Working capital: the amount of
money permanently needed in
cash or kind to keep business
operating.

Loan need

Determine the total capital


requirement and see if the
amount required is too much for
you to finance on your own. If
this is the case then loan is
needed.

Unit selling price

To Calculate the expected sales


for preparing profit and loss
statement, determine the unit
selling price of the product.

Return on investment

To calculate ROI;

divide earning before tax (net


profit) by the total capital
requirement.

Feasibility of the project

This section deal with the


questions like:
Is

the profit on the first year


sufficient to meet the loan and
interest payment
Can raw materials supply problem
overcome
What happens if sales forecast is
only 80% realised.

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