Chapter 15.docx - Chapter 15 Financial Plan A comprehensive...

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Chapter 15 Financial Plan: - A comprehensive assessment of the business’ current financial sate based on forecasting sales, assets, and withdrawal plan - It projects over 3 to 5 years - It provides a tool for sound financial management: assessment of a business’ financial info. A financial plan consists of the financial statement Financial statement: - Provides info on the business performance as well as sources of financial resources - Consist of three components 1. Income statement 2. Balance sheet 3. Statement of cash flow 6 step process to writing a financial plan: 1. Conducting a sales forecast a. Estimate of future sales (revenues) b. Price x # customers served 2. Developing an example budget a. Estimate of expenses incurred b. Examines all operating expenses & COGS (In my case I won’t have COGS) 3. Developing cash flows projections a. Cash flow b. Flow of money in/out the business 4. Developing income projections a. Projection of financial results of operations 5. Identifying assets and liabilities 6.
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