Financial report

1. Financial Plan
Superior University
Shabbir Hussain
Aviation Faculty Member
PHD Scholar (Business Adm.)

2. “If you fail to plan, you are
planning to fail ”
Benjamin Franklin
2

3. Finance is the lifeblood of
a business enterprise.
3

4. Why
Financial
Planning?
“One cannot raise necessary funds to run a
start-up just by presenting his/her idea. There
needs to be a sloid financial plan for convincing
someone to invest/lend money”
4

5. COMPONENTS OF
FINANCIAL PLAN
Sources of
Finance
Start-up
Capital
Requirement
Financial
Attractiveness
5
Prospected
Financial
Statements

6. START-UP CAPITAL
REQUIREMENT
⊸ Facilities & Equipment Requirement
⊸ Working Capital requirement
6

7. Facilities & Equipment
Requirement
7
Sr.
No
Description No. Of Units
Cost per Unit
(Rs.)
Amount (Rs.)
1 Laptop/PC 05 35,000 175,000
2 Internet Connection 01 4,000 4,000
3 Electricity Connection 01 10,000 10,000
4 UPS/Electricity Generator 01 24,000 24,000
5 Air Conditioner 01 50,000 50,000
6 Furniture and Fixtures -- 40,000 40,000
7 Security Deposit(Office) -- 60,000 60,000
8 Printer 01 20,000 20,000
9 Digital Marketing -- 50,000 50,000
10 Legal Fee -- 10,000 10,000
Total 443,000

8. Working Capital Requirement
8
“Working Capital is used to run day-to-day operations”
Computation for a start-up
Sr. No. Description Per Month Cost(Rs.)
1 Office Staff Salaries
(Peon, Cleaner, others etc.)
60,000
2 Rent Expense 50,000
3 Electricity Bill 15,000
4 Other Utilities expense 6,000
5 Marketing Expense 10,000
Total 141,000
Required WorkingCapital
(141,000× 3)
423,000
“operating
expenses
of
first
3
to
6
months”

9. START-UP CAPITAL REQUIREMENT
Computation
9
Sr. No. Description Amount (Rs,)
1 Facilities & Equipment 443,000
2 Working Capital 423,000
Total Start-up Capital Required 866,000

11. Sources of Finance
11
Equity
Owners’ share
in a business
Sources: Venture
Capital, Business
Angels,
Crowdfunding,
Bootstrapping
Debt
Owed by the
businessto a party
different from
owner of business.
Sources: Commercial
Banks, Peer to Peer
Lending

12. Prospected Financial
Statements
⊸ Pro forma Income Statement (Cash basis)
⊸ Pro forma Balance Sheet
12

13. Pro forma Income Statement
13
⊸ Identify revenue streams
⊸ Prepare Sales budgetfor year-1 (through market research)
⊸ Estimate productioncost/unit (in case of tangible product)
⊸ Estimate annualoperating cost (already computed)
⊸ Apply taxation accordingto your sector
⊸ Use Growth and inflation rates for future projections

15. Pro forma Income Statement
15
Rs.
Revenue XXX
Less: CGS* (XXX)
Gross Profit XXX
Operating Expenses (XXX)
Operating Profit / (Loss) XXX
Less: Tax (XXX)
Net Income after tax XXX
ForTrading/Manufacturing
Business
For Service Business
Rs.
Revenue XXX
Operating Expenses (XXX)
Operating Profit / (Loss) XXX
Less: Tax (XXX)
Net Income after tax XXX

16. Pro forma Balance Sheet
16
Assets Rs. Liabilities & Equity Rs.
Laptop/PC 175,000 Debt 166,000
UPS/Electricity Generator 24,000 Equity 700,000
Air Conditioner 50,000
Furniture and Fixtures 40,000
Security Deposit(Office) 60,000
Printer 20,000
Preliminary Expenses
(Marketing etc.)
74,000
Cash
(Working Capital)
423,000
Total 866,000 Total 866,000

17. Financial
Attractiveness
⊸ Profitability Ratios
⊸ Break-even Analysis
⊸ Payback period for investor
17

18. Profitability Ratios
18
Gross Profit Margin =
Gross Profit
Revenue × 100
Net Profit Margin =
Net Profit after tax
Revenue × 100
Return on Equity =
Net Profit after tax
Equity at start of year
× 100

19. Break-even Analysis
19
“Break-even analysis predicts the sales volume (No. of Units)
at a given price, required to recover total costs”
Break Even =
Annual Operating Expenses
Per Unit Contribution
Note: Contribution = Selling Price – Variable Cost

20. Payback Period
20
“The time period in which investor will recover Principle amount of
his/her investment”
Payback period = Years before full recovery +
Operating Profit
Revenue
Note: Based on the cash flow investor is getting every year

22. Thanks!
Any questions?
You can find me at: shabbirhussain@.superior.edu.pk
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