This document outlines the key components of a financial plan for startups and existing businesses. A financial plan provides projections of revenues, costs, profits and cash flows. It determines funding needs and profitability. The financial plan includes total project costs, projected income statements, cash flow statements and balance sheets over multiple years. Key metrics like break-even point, return on investment are also calculated to evaluate business performance and viability.

1. Provides an account of a company’s financial needs
sources of financing and projection of its revenues,
costs and profits.

2. 
For Start-ups:
 To know how much is needed to put up the business
 To plan out how to come up with the needed capital
 To have realistic projections
 To check the profitability of a business
Importance of a Financial
Plan

3. 
For Existing Businesses:
• Forecast the future of a business
• Diagnosis for a problematic business
• Profitability check
Importance of a Financial
Plan

4. 
 Total project cost schedule
• Fixed investments, working capital and the pre-operating
expenses
• Working Capital is the minimum cash balance needed for
one cycle to pay your raw materials, direct labor,
manufacturing overhead, operating expenses
 Projected Income Statement
• The net result of a company’s revenues, minus expenses ,
over a given period
• Income = Revenues - Expenses
• Determines if the business will be profitable or not
What to consider?

5. 
 Projected Cash Flow Statement
• Shows the amounts of money you expect to be
coming into and going out of your business in a
given time frame
• shows if a business is running out of money
• If cash flow from operations is declining, too small,
or even negative, it is important to evaluate the
business for improvement (accts. Receivable,
inventory, accts. Payable)
What to consider?

6. 
 Projected Balance Sheet
• Summarizes a company’s Assets, Liabilities and
Owners’ Equity (Net Worth) at a specific point in
time
 Break-even Point Sales Volume
• The amount of product that needs to be produced
and sold to cover all total costs of production
• BEP
What to consider?

7. 
 Break-even Point Selling Price
• Determines how many units of products that needs
to be sold to cover all costs
 Return on Investment (ROI)
• Evaluates the profitability of an investment
• ROI= Net Profit
Total Assets
What to consider?

8. 
TABLE 20
Total Project Cost
DEBT EQUITY TOTAL
Total pre-operating expenses (from Table
18)
Fixed investment (from Table 4)
Working capital (minimum cash balance
you need for one cycle to pay your raw
materials, direct labor, manufacturing
overhead, operating expenses)
TOTAL PROJECT COST (Total pre-
operating expenses + fixed investment
+ working capital requirement)
Proportion of debt:equity

9. 
Projected Income Statement
for Manufacturers and Traders
Table 3
Year 1 Year 2 Year 3
Total sales (Table 1-A or 1-B)
Less: Cost of goods sold (Table 14 or 15)
Net of Sales
Gross profit from sales
Less: Selling expenses (from Table 3)
Less: Administrative expenses (from Table 19)
Net operating profit
Less: Interest charges (from Table 21)
Net income before taxes

10. 
TABLE 24
Projected Cash Flow Statement
Pre-
Operating
Year 1 Year 2 Year 3
Cash Inflows
Loan proceeds
Owners Equity
Cash sales
Add: Collection of receivables
TOTAL CASH INFLOWS
Cash Outflows
Pre-operating expenses
Fixed investment
Materials purchases (from Table 11)
Direct labor
Production overhead minus depreciation (from Table 11)
Selling & administrative expenses minus depreciation
and amortization of pre-operating expenses
(from Tables 3 & 19)
TOTAL CASH OUTFLOWS
NET CASH FLOW
Add: Beginning cash balance 0
Less: Principal repayments/interest payments (from
Table 21)
ENDING CASH BALANCE

11. 
TABLE 25
Projected Balance Sheet
Pre-Operating Year 1 Year 2 Year 3
ASSETS
Cash
Accounts Receivable
Raw materials inventory
Finished goods inventory
Merchandise inventory
Supplies/spare parts inventory
TOTAL CURRENT ASSETS
Property, plant, and equipment
Less: Accumulated depreciation
NET PROPERTY, PLANT, AND EQUIPMENT
Pre-operating expenses
Less: Amortization of pre-operating expenses
NET PRE-OPERATING EXPENSES
TOTALASSETS
LIABILITIES AND OWNER’S EQUITY
Accounts payable
Short-term loans payable
TOTAL CURRENT LIABILITIES
Long-term loans
TOTAL LIABILITIES
Owner’s equity
Retained earnings
TOTAL OWNER’S EQUITY
TOTAL LIABILITIES & OWNER’S EQUITY