COLLEGE LEVEL‎ > ‎

Section 9 - Financial Plan

e
Introduction:
In this section, you will prepare your financial plan. 
For many readers, the financial plan is the most important section because it identifies your financing needs and shows the profit potential of your business. In addition, a good financial plan will give the reader confidence that you really understand your business. 

A financial plan includes a statement, which compares your revenues and expenses to see if you are going to make any money. These include:
1. Product Sales / Service - Job Work Target 
2. Infrastructure
3. Raw Material
4. Expenses
5. Working Capital
6. Total Project Cost
7. Finance Availability
8. Profitability Analysis
9. Financial Ratios

In addition, a financial plan also includes notes to the Financial Statements (which list some of your assumptions), a written description highlighting key parts of your financial plan and Break even Point, cost ratios, operating ratio, and operating cost. In this section, we will ask you to enter your financial assumptions into a series of numerical tables. Based upon this information, we will then produce Financial statement.

Be prepared to go back and forth between the financial statements a number of times before you come up with a financial plan that you are happy with.
Please note: you can only enter whole numbers into the numerical boxes. Do not use commas,  Rs. signs or letters.

TOPICS:
1. Product Sales / Services - Job Work Target
Instruction: In this section briefly project your product sales or service job work targets.
These target figures indicate the minimum quantity of product sales or service job work targets that will be achieved.

 Sr.no.   Details of Product/ Service/ Job Work  Per Month (units)Value per unit Sales per monthSales per year
  

    
  

    
   

   
    TOTAL  


2. Infrastructure:
Instruction:This section consist of Work Place / Space and Plant & Machinery that you need to run your business. Specify below these in detail.
1. Working Place / Space: If the place where you are going to run your business is your own, mention rates and taxes (property taxes) per month, or if it is on rental basis, mention rent per month.
2. Plant and Machinery: This list contains all Plant / Machinery needed for working of your business. Also list office equipments like furniture, computer etc or any other items you require for running of your business. Mention the cost of each item.

Working Place/ Space: Own working place / Rental working place
Monthly rent/ Taxes:____________

 Sr. No.Description of Plant & Machinery Number of Units Cost per unit Total Cost 
     
     
   TOTAL:  



3. Raw material:
Instruction: In this section briefly describe the raw materials required for your business. Also mention the monthly quantity and cost of each raw material required.


 Sr. No.Description of Raw MaterialMonthly QuantityRate per unit Cost per month Cost per year 
      
     
 
    TOTAL:  


4. Salary / Wages Expenses:
Instruction: This section is related to Salary / Wages expenses that will be incured related to your business. 
List all types of human resources you will require, eg. Managers, Supervisors, Officers, or Workers etc. Also Mention the salary / wages that you will offer to them.


 Sr. No.DesignationNo. of personsCost per month  Cost MonthlyCost yearly 
      
     
 
    TOTAL:  

5. Miscellaneous expenses:
Instruction: This section lists all the Miscellaneous / other expenses related to your business not listed or specified in the previous sub topics for eg. Maintenance or Office expenses etc.

 Sr. No.Description of the Expenses Monthly Cost  Yearly Cost
    
   
 
 
 TOTAL:
  


6. Utilities:
Instruction: Utilities contain the expenditure incurred to run Plant and Machinery or other machinery for production purpose for example Electricity, Water, Fuel etc. 

List all such items and mention approximate monthly cost of each.


 Sr. No.Description of the Utility Monthly Cost  Yearly Cost
    
   
 
 
 TOTAL:
  

7. Financial Summary :
Instruction: look at the Financial Summary. It contains : 
1. Working Capital : It is broadly, the capital required to finance production expenses and business expenses from the time production commences till the time sales proceeds are realised.
2. Total Project Cost : It means the entire cost require to start the business.
This contains the Fixed Capital (cost of Plant and Machinery) and Working Capital

Exercise:
For how many months Working Capital you need:_____________

 Item     Monthly    Working capital 
 1. Total - Rent / Taxes  
 2. Total - Raw Materials  
 1. Total - Salary / Wages  
 1. Total - Misc. Expenses  
 1. Total - Utilities  
 TOTAL:
  

 Total Project Cost 
 1. Fixed Capital 
 2. Working Capital 
 TOTAL:
 

Source of Finance for Business
Enter the loan funds and own funds:
1. Loan Funds (Debt):  
2. Own Funds (Equity): 
 TOTAL:
 

8. Profitability Analysis:
 
DescriptionMonthly  (Rs.)   Annual (Rs.)
 1. Sales  
 2. Expenses  
3. Bank Interest  
4. Depreciation
Average 10% on Fixed Assets
  
5. Net Profit Before Tax (NPBT)
{1 - (Sum of 2 to 4) }
  

9. Financial Ratios:
1.  Debt to Equity Ratio: The Financial Strategy of a Company is expressed by its Debt - to - Equity Ratio. 

Debt - to - Equity Ratio = Debt / Equity = 0 / 0 = 0

2. Percentage of Profit to Sales =  NPBT * 100 / Sales = 0/0 *100 = 0%

3. Percentage of Profit to Fixed Assets =  NPBT * 100 / Fixed Assets = 0/0 *100 = 0% 

4. Debt to Fixed Assets Ratio = Debt / Fixed Asset = 0 / 0 = 0

5. Expenses to Sales Ration = Expenses / Sales == 0 / 0 = 0