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Business Plan Part3 - Business Plans: Financial...

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SBusiness Plans: Financial Projections Introduction to Business
CoveredToday ì How to project an income statement ì Useful skill set for a job in finance, consul8ng, or business ì In general: basis + assump8onsàprojec8ons 1. Basis: What is the current state of the firm? 2. Assump8ons: What do we think will happen in the industry (external) and how will the company respond (internal)? 3. Projec8ons: What will the state of the firm be given our assump8ons about the industry and the company?
End Result
Basis ì Establish the current financial posi8on of the firm: ì Use most recent financial statements (if available) ì Specifically for the business plan assignment: ì Establish an ini8al revenue number for your current year ì If a company does not post a value for revenue, use “amount of capital raised” as a proxy ìAll other projec8ons are determined as a percentage of revenue
Assumptions ì Before projec8ng current values forward, establish a set of internal and external assump8ons ì Internal Assump8ons: What will the company do, and how will this affect its financial posi8on in the future?
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