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The Financial Plan

The Financial Plan. Operating & Capital Budgets. Who works on budgets? Sales Operating Costs List fixed costs Capital Budgeting Long-term buying. Pro Forma Income Statement. Sales How to forecast? Cost of Good Sold Selling Expenses Salaries & Wages Insurance and Other Expenses

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The Financial Plan

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  1. The Financial Plan

  2. Operating & Capital Budgets • Who works on budgets? • Sales • Operating Costs • List fixed costs • Capital Budgeting • Long-term buying

  3. Pro Forma Income Statement • Sales • How to forecast? • Cost of Good Sold • Selling Expenses • Salaries & Wages • Insurance and Other Expenses • Investors • Timeframe • Estimates

  4. Pro Forma Cash Flows • Why are cash flows necessary? • Cash v. A/R • Receipts > Disbursements • Receipts < Disbursements • How to calculate cash and disbursements? • Percentages for each month

  5. Assets “Actual cost or amount expended” Current Fixed Liabilities Current Long-term Pay immediately? Owner’s Equity “Net worth of a business” Pro Forma Balance Sheet

  6. Break-Even Analysis • Why use it? • TFC/ (Price-UVC)

  7. Pro Forma Sources and Applications of Funds • Sources • Loans • Personal funds • Net Income • +Depreciation • Application • Increase assets • Decrease L-T liabilities • Decrease owner’s equity

  8. Software • Microsoft Excel • Advantages • Other Software and Functions • Peachtree • Oracle Business Suite

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