This document provides information about calculating key financial ratios that will help evaluate future funding applications. It instructs the user to calculate ratios using last year's financial data and estimates for future needs. The user will then estimate details of a potential new funding request, such as the interest on a loan. Typical funding rates can be researched online or discussed with advisors. The document concludes by explaining that an accountant can complete the ratios using business financial data if needed.

1. v
Your financial information
In Module 9: Strategic finance and funding, you will complete an exercise to calculate
different key financial ratios to those explored in earlier modules. This will help when you
consider your future financial strategy and potential funding applications.
You will calculate the ratios that are used by funders to evaluate applications. Using financial
information from your business, you will look at your last year of data and estimates for future
financing needs. You will then be asked to estimate details of a potential new funding request,
for example the interest charged on a loan. Do not be concerned if you have not yet considered
future funding and cannot enter this information. As the module progresses, you will discover
more about funding options and how they might benefit your business.
Predicting fundingrequests
As your plans develop, you will be able to predict potential values for the ratios. Typical rates
can be researched online. You can also ask your advisors or discuss options with other
businesses in your network. Estimates of amounts you may wish to borrow will be based on
your plans.
If you develop yourown accounts:
If you record your own finances, you will be able to access and gather the key information listed
in this document. If you feel you need to develop your confidence reviewing finances, you may
want to consider working with a financial advisor. If you are unsure of which data to include,
check the Financial terms glossary in the Resources section for definitions of the financial
terminology used. The ratios will be explained in more detail later in this module.
If you have an accountant:
If you already work with an accountant, financial advisor, or other specialist, ask them to
complete this form with the relevant data from your business.
MODULE 9: FINANCING YOUR BUSINESS GROWTH

2. YEAR 1
Operating income $6 million
Interest charge* 10%
Short-term loans $20000
Long-term loans $70000
Owners’ equity
100%
Investment amount*
$200K
Projected annual profits*
$8 million
Investors’ share %*
50%
Investment amount*
$200K
Valuation*
$4 million
*Estimated figures required.