Economy & Finance


1. FINANCIAL PLAN HENDRY HARTONO, SE.,MM. 1 2. The financial plan is critical to the success of your businessplan – especially if it is for the purpose of getting a…
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  • 2. The financial plan is critical to the success of your businessplan – especially if it is for the purpose of getting a bank loan.The Cash Flow Forecast is arguably the most important partof the plan, but each of the other documents is important froma planning perspective. There are three sections in a financialplan:1. The Starting Balance Sheet2. The Pro-Forma (or Forecast) Income Statement3. The Cash Flow Forecast 2
  • 3. To assist you in this process, we havecreated a template written for MS/Excel.Tips :1. Be patient2. Get help3. Be consistent4. Use the simple template provided 3
  • 4.  Starting Costs ◦ Estimate Current Assets ◦ Estimate Capital Assets ◦ Estimate Start-up Expenses Starting Balance Sheet ◦ Total Assets (from above) ◦ Planned Investment (Equity) ◦ Planned Loans (Liabilities) ◦ Balance Sheet Formula ◦ Assets = Liabilities + Equity 4
  • 5.  Income Statement • Cash Flow ◦ Start-up Expenses – Estimate Monthly Sales ◦ Forecast Revenue – Adjust Monthly Sales for AR ◦ Forecast Cost of Goods – Account for loans & investments ◦ Forecast Overhead Expenses – Calculate Total Receipts ◦ Revenue – Expenses = Net – Estimate Monthly Purchase Profit – Adjust for AP – Estimate Monthly Overheads – Estimate Loan Repayment – Forward Start-up Costs – Calculate Disbursements 5
  • 6. The break-even point in your business is the point atwhich your sales revenue equals your total expenses. Atthat point you neither make money, nor do you lose any.The break-even lets you know what it is going to take insales just to survive. It provides a good indication of theviability of a business project. 6
  • 7. Jan is a home-based potter who Unit Variable Price Permakes custom mugs by the case. Fixed Cost Produced Cost UnitHer capacity is no more than 15cases of mugs per week. She has A B C (B+C) / Acalculated the variable cost for each 5 $ 3.000 $ 250 $ 650case, including clay, glaze and 6 $ 3.000 $ 300 $ 550packaging to be $50 per case. It 7 $ 3.000 $ 350 $ 479costs Jan $3,000 per week to run 8 $ 3.000 $ 400 $ 425her business, including her wage. 9 $ 3.000 $ 450 $ 383The cost per case, when we include 10 $ 3.000 $ 500 $ 350the $3,000 per week in fixed 11 $ 3.000 $ 550 $ 323costs, changes depending on the 12 $ 3.000 $ 600 $ 300number of cases produced each 13 $ 3.000 $ 650 $ 281week. This is calculated in the table 14 $ 3.000 $ 700 $ 264following. 15 $ 3.000 $ 750 $ 250 7
  • 8. Notice that the break-even is not a point, but it varies for each differentprice point. If she can get $425 per case for her mugs, she needs to beable to produce and sell eight cases of mugs per week. We can plot this ona graph as follows: 8
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  • 10. Sarah wants to start a retail gift store. She estimates her monthly fixedcosts at $9,000 per month. She determines that the industry standardGross Margin for a gift store is 45%. She calculates her break-even asfollows: Sarah must be convinced that this location is able to sell at least $20,000 per month (or $240,000 per year) before she starts her business. 10
  • 11. Assets = Liabilities + Equity1. Aset adalah sumber daya yang dimiliki oleh perusahaan, yang dapat digunakan oleh perusahaan dalam kelancaran aktivitas produksi, konsumsi dan pertukaran. Dengan demikian, aset merupakan kapasitas yang dimiliki perusahaan yang memberikan manfaat ekonomis di masa yang akan datang dan menghasilkan bagi perusahaan yang bersangkutan.2. Kewajiban adalah klaim atas aset tertentu. Bentuk sederhana kewajiban perusahaan adalah utang. Utang ini bisa timbul dari peminjaman uang, pembelian barang dagangan atau perlengkapan secara kredit yang digunakan untuk membantu kegiatan perusahaan.3. Ekuitas pemilik merupakan klaim pemilik atas semua aset yang ada di perusahaan, yang dihitung dengan cara total aset dikurangi dengan total kewajiban. Dengan demikian, total aset yang dimiliki perusahaan akan menjadi klaim dari para kreditor dan klaim pemilik. Klaim dari pemilik merupakan sisa dari klaim kreditor. 11
  • 12. The first “Current Assets”.These are assets (things your business owns) which will be used upwithin the first year of doing business. Typically they includecash, inventory and pre-paid expenses (such as pre-paid insurance).Although Accounts Receivable is another example of a currentasset, there are no accounts receivables in a business start-up.The second “Capital Assets”.These are items you purchase with the intention of keeping them andusing them to run the business. For example, if you purchase a vehicleto use in the business, it is a capital asset. If you purchase a vehicle tore-sell it, however, then that vehicle is inventory. 12
  • 13. Forecasting Your AssetsA: Determine and Budget your Current Assets Starting Cash (You must have enough to cover your start-up expenses) IDR Starting Inventory IDR Pre-Paid Expenses (Usually Insurance) IDR Pre-Paid Rent IDR Other Current Assets IDR Total Current Assets (A) IDRB: Determine your Capital Asset needs. Machinery and Equipment IDR Office Furnishings, Fixturing & Other IDR Automobiles IDR Computers and Data Processing Equipment IDR Leasehold Improvements IDR Tools and other assets valued at Less than 2.000.000 IDR Computer Software (Excluding Systems software) IDR Other Capital or Intangible Assets IDR Total Capital Assets (B) IDR Your Total Assets are A + B 13
  • 14. Starting Balance SheetAssets Liabilities Current Assets Current Liabilities Cash Line of Credit Inventory Supplier Credit Pre-paid Expenses C Total Current Liabilities A Total Current Assets Non Current Liabilities Capital Assets Term Loans Machinery and Equipment Vendor Credit Office Furnishings, Fixturing and Other Shareholder Loans Automobiles D Total Non Current Liabilities Computers and Data Processing Equipment C+D Total Liabilities Leasehold Improvements Tools and other assets valued at less than 2M Equity Computer Software (excluding system software) Investment Other Capital or Intangible Assets E Total Equity B Total Capital Assets A+B Total Assets C+D+E Total Liabilities + Equity 14
  • 15. There are three things that need to be predicted toforecast your income statement:1. the sales projection, A sales projection (forecast) is a goal you set for the business that you proactively try to achieve. Price per unit Number of Units sold = Revenue2. the cost of goods projection Cost of goods = Number of units sold x Cost per unit3. and the overhead projection 15
  • 16. Why do a Cash Flow Forecast? A format for planning the most effective use of your cash (cash management). A schedule of anticipated cash receipts – follow through to see that you achieve it! A schedule of priorities for the payment of accounts – stick to it! A measure of the significance of unexpected changes in circumstances; e.g., reduction of sales tight money situations, etc. A list, on paper, of all the bill paying details which have been running around in your head, keeping you awake nights. An estimate of the amount of money you need to borrow in order to finance your day-to-day operations. This is perhaps the most important aspect of a completed cash flow forecast. An outline to show you and the lender that you have enough cash to make your loan payments on time. 16
  • 17. 1. Receipts ◦ Receipts from Operations ◦ Receipts from Loan Proceeds ◦ Receipts from Investments2. Disbursements ◦ Disbursements of Purchases / Sub Contracting / Piecework Labour ◦ Disbursement of Administrative Expenses ◦ Disbursements for Capital Purchases ◦ Disbursements for Debt Repayment or Dividends Calculation of Cash Flow 17
  • 18. 1. Equity Financing Equity is the investors’ financial stake in the business. With equity financing, an investor makes money available for use in exchange for an ownership share in the business.2. Debt Financing the lender charges interest for the use or rental of money loaned, but does not get a share or equity in the business. 18
  • 19. Many banks use the four C’s to evaluate loan proposals. Theyrepresent:  Capacity / Cash Flow: ability to pay the loan, ability to generate revenues  Collateral: The value of internal and external security that may be liquidated  Character: personal history to determine attitudes towards credit  Commitment: measure your capital to see the owner commitment in this business 19
  • 20. 1. Check your financial plant every month. Check against actual. This will help you anticipate problems before they arise2. Finance is difficult for most entrepreneurs. Use professionals such as accountants or consultants (or BINUS Entrepreneurship Center) to help you make sense of your financial statements. Financial plans and financial statements are a critical part of managing your business. Good luck with your planning and with your business. 20
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    Jul 23, 2017
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