The Simplified Financial Plan

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


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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