Financial Plan - Essay Example

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Financial Plan

For preparing three major financial statements i.e. Income statement, cash flow and balance sheet necessary areas like sales projection, estimated cost, required capital and other investments needed to be determined properly. The following table depicts estimated cost for capital investment required for manufacturing unit and office equipments. Major capital investment includes software development cost for tablet PC and other machineries like computer and tools. For the offices, necessary furniture will also be required that will incur certain amount of cost. Besides, there will be certain fixed overhead that will be incurred in every month. The costs of necessary fixed overheads are given in the table for first two years. Therefore, based on the above required initial cost for the business, the necessary capital will be obtained from the shareholders’ contributions and from the long and short term loans. The following table presents source and cost of different capitals. After determining the estimated cost for the different activities like operations, manufacturing, development etc, the projected income statement can be prepared considering estimated sales. Monthly sales forecast has been estimated for the first two years, and the projected income statements have developed on monthly basis for the first years. The following table shows income statement for the first year. In the first, year of operation, the sales will be expected to very low, and on the other hand, the fixed expenses will higher due to high promotional and marketing, and depreciations. ...
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Summary

In the paper “Financial Plan“ the author analyzes the financial planning as the most crucial area that indicates the future viability and attractiveness in the process of developing a new business. The Track Table must focus on developing financial statement to attract a number of investors.

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