Section 9 - Financial Plan
In this section, you will prepare your financial plan.
For many readers, the financial plan is the most important section because it identifies your financing needs and shows the profit potential of your business. In addition, a good financial plan will give the reader confidence that you really understand your business.
A financial plan includes a statement, which compares your revenues and expenses to see if you are going to make any money. These include:
1. Product Sales / Service - Job Work Target
3. Raw Material
5. Working Capital
6. Total Project Cost
7. Finance Availability
8. Profitability Analysis
9. Financial Ratios
In addition, a financial plan also includes notes to the Financial Statements (which list some of your assumptions), a written description highlighting key parts of your financial plan and Break even Point, cost ratios, operating ratio, and operating cost. In this section, we will ask you to enter your financial assumptions into a series of numerical tables. Based upon this information, we will then produce Financial statement.
Be prepared to go back and forth between the financial statements a number of times before you come up with a financial plan that you are happy with.
Please note: you can only enter whole numbers into the numerical boxes. Do not use commas, Rs. signs or letters.
1. Product Sales / Services - Job Work Target
Instruction: In this section briefly project your product sales or service job work targets.
These target figures indicate the minimum quantity of product sales or service job work targets that will be achieved.
Instruction:This section consist of Work Place / Space and Plant & Machinery that you need to run your business. Specify below these in detail.
1. Working Place / Space: If the place where you are going to run your business is your own, mention rates and taxes (property taxes) per month, or if it is on rental basis, mention rent per month.
2. Plant and Machinery: This list contains all Plant / Machinery needed for working of your business. Also list office equipments like furniture, computer etc or any other items you require for running of your business. Mention the cost of each item.
Working Place/ Space: Own working place / Rental working place
Monthly rent/ Taxes:____________
3. Raw material:
Instruction: In this section briefly describe the raw materials required for your business. Also mention the monthly quantity and cost of each raw material required.
4. Salary / Wages Expenses:
Instruction: This section is related to Salary / Wages expenses that will be incured related to your business.
List all types of human resources you will require, eg. Managers, Supervisors, Officers, or Workers etc. Also Mention the salary / wages that you will offer to them.
5. Miscellaneous expenses:
Instruction: This section lists all the Miscellaneous / other expenses related to your business not listed or specified in the previous sub topics for eg. Maintenance or Office expenses etc.
Instruction: Utilities contain the expenditure incurred to run Plant and Machinery or other machinery for production purpose for example Electricity, Water, Fuel etc.
List all such items and mention approximate monthly cost of each.
7. Financial Summary :
Instruction: look at the Financial Summary. It contains :
1. Working Capital : It is broadly, the capital required to finance production expenses and business expenses from the time production commences till the time sales proceeds are realised.
2. Total Project Cost : It means the entire cost require to start the business.
This contains the Fixed Capital (cost of Plant and Machinery) and Working Capital
For how many months Working Capital you need:_____________
Source of Finance for Business
Enter the loan funds and own funds:
1. Loan Funds (Debt):
2. Own Funds (Equity):
8. Profitability Analysis:
9. Financial Ratios:
1. Debt to Equity Ratio: The Financial Strategy of a Company is expressed by its Debt - to - Equity Ratio.
Debt - to - Equity Ratio = Debt / Equity = 0 / 0 = 0
2. Percentage of Profit to Sales = NPBT * 100 / Sales = 0/0 *100 = 0%
3. Percentage of Profit to Fixed Assets = NPBT * 100 / Fixed Assets = 0/0 *100 = 0%
4. Debt to Fixed Assets Ratio = Debt / Fixed Asset = 0 / 0 = 0
5. Expenses to Sales Ration = Expenses / Sales == 0 / 0 = 0