Forecasting and Preparing Financial Statements

This is the third milestone of your business plan—the financial plan.

Tasks:

Research the costs, financial statements, cash flow, and risks of your chosen project. Based on your research and the knowledge you have gained from the course, create a simplified 4- to 5-page financial plan including tables and charts. For the financial plan:

• Estimate the capital requirements, use of capital, start-up requirements (if applicable), and other probable costs involved in the implementation and subsequent operation of your project.
• Identify the sources of financing.
• Define a payback period.
• Prepare cash flow projections.
• Prepare a projected balance sheet representing the end of the first calendar year of operations and defining assets and liabilities, both current and long term.
• Prepare income statement projections for the end of the first calendar year of operations, including charts showing gross revenues, gross profit, and net income.
• Define the meaning of a break-even analysis and prepare an analysis appropriate for your project.
• Prepare a ratio analysis, including the definition and value of the following ratios (whichever applicable)—current, quick, debt, debt-to-equity, average inventory turnover, receivables turnover, payables turnover, net sales to working capital, net profit to sales, and net profit to equity.
• Prepare a list of possible risks associated with the implementation and future operation of your project and describe the significance of each of them.

Submission Details:

• By the due date assigned, save your paper as M3_A2_lastname_firstinitial.doc and submit it to the Submissions Area.

This assignment is worth 100 points and will be graded according to the following rubric.