The Simplified Financial Plan

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This is the third milestone of your business plan—the financial plan.

Tasks:

Research the costs, financial statements, cash flow, and  risks of your chosen project. Based on your research and the knowledge  you have gained from the course, create a simplified 4- to 5-page  financial plan including tables and charts. For the financial plan:

  • Estimate the capital requirements, use of capital, start-up  requirements (if applicable), and other probable costs involved in the  implementation and subsequent operation of your project.
  • Identify the sources of financing.
  • Define a payback period.
  • Prepare cash flow projections.
  • Prepare a projected balance sheet  representing the end of the first calendar year of operations and  defining assets and liabilities, both current and long term.
  • Prepare income statement projections for  the end of the first calendar year of operations, including charts  showing gross revenues, gross profit, and net income.
  • Define the meaning of a break-even analysis and prepare an analysis appropriate for your project.
  • Prepare a ratio analysis, including the  definition and value of the following ratios (whichever  applicable)—current, quick, debt, debt-to-equity, average inventory  turnover, receivables turnover, payables turnover, net sales to working  capital, net profit to sales, and net profit to equity.
  • Prepare a list of possible risks  associated with the implementation and future operation of your project  and describe the significance of each of them.

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