Part 2: Preparing A Financial Plan – Business Venture Feasibility: The Return on Investment

Business Venture Feasibility: The Return on InvestmentQuestion: “Is it worthwhile?” Now that you have determined sales, costs, and profits, you are in a position to take a hard look at the venture. There are two things in particular that you should look for: • The minimum value of the total sales you will require to … Read more

Balance Sheet Template

Projected Balance Sheet   Historical Projected   Year 1 Year 2 Opening Year 1 Year 2 Year 3 Assets             Current             Cash and bank accounts             Accounts receivable             Inventory         … Read more

Part 2: Preparing A Financial Plan – The Cash Flow Budget vs The Income and Expense Statement

The Cash Flow Budget vs The Income and Expense Statement There is a basic distinction between a monthly cash flow budget and the monthly income and expense forecast. The monthly cash flow statement shows all cash receipts the business expects to receive from every source and all cash payments the business expects to make. The … Read more

Part 2: Preparing A Financial Plan – Depreciation

Depreciation Depreciation is defined as the estimated amount of time a fixed asset decreases in value over the estimated useful life of the asset. Depreciation is computed annually, for tax and accounting purposes. There are different ways to calculate depreciation. Two widely used methods are 1) The straight line method and 2) The declining method … Read more

Part 2: Preparing A Financial Plan – Preparing the Income Statement

Preparing the Income Statement The items contained in a typical projected income statement are listed below along with explanations on how to calculate the more complicated items. Assumptions Sales Start your financial projections by forecasting the sales of your product or service. Sales forecasting is extremely important so always make realistic estimates. Review your market … Read more