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3920u10 - New Venture and Small Business Management...

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New Venture and Small Business Management 1 Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved UNIT 10 MODULE 1 Estimating Financing Needs Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved fixed asset acquisitions product development initial inventory marketing rent payroll etc... accounts receivable fixed asset acquisition potential short-term losses FORMATION EXPANSION STABILITY Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved CAPITAL REQUIREMENTS START-UP COSTS OPERATING NEEDS + = Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved PROJECTED FINANCIAL STATEMENTS BALANCE SHEET INCOME STATEMENT CASH FLOW STATEMENT SALES PROFIT YEAR 2 Q1 Q2 Q3 Q4 YEAR 3 Q1 Q2 Q3 Q4 YEAR 1 M1 M2 M3 M4 M12 Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved THREE SCENARIOS... l most likely l most pessimistic l most optimistic Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Accounts Receivable 0 Inventory $40 000 Prepaids 0 $40 000 Fixed Assets $20 000 Total Assets $60 000 Accounts Payable ? Accrued Liabilities ? ? Debt ? Owner’s Equity Paid In ? Retained Earnings ? $60 000
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New Venture and Small Business Management 2 Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved FABRIC $30 000 BUTTONS $2 500 ZIPPERS $2 500 THREAD $5 000 Accounts Receivable 0 Inventory $40 000 Prepaids 0 $40 000 Fixed Assets $20 000 Total Assets $60 000 SHELVING $3 000 CUTTING TABLE $2 000 SEWING MACHINE $4 000 BUTTONING MACHINE $4 000 STEAM PRESS $5 000 OFFICE EQUIPMENT $2 000 CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved Accounts Receivable 0 Inventory $40 000 Prepaids 0 $40 000 Fixed Assets $20 000 $22 000 Total Assets $60 000 $62 000 10% CONTINGENCY CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Accounts Receivable 0 Inventory $40 000 Prepaids 0 $40 000 Fixed Assets $22 000 $33 000 Total Assets $62 000 $73 000 Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved Accounts Receivable 0 Inventory $40 000 $50 000 Prepaids 0 $40 000 $50 000 Fixed Assets $33 000 Total Assets $73 000 $83 000 INVENTORY $51 757 Cost of Goods Sold Turnover $250 000 (1- .234) 3.7 = = = CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved days x $250 000 $29 452 Accounts Receivable 0 $30 000 Inventory $50 000 Prepaids 0 $50 000 $80 000 Fixed Assets $33 000 Total Assets $83 000 $113 000 ACCOUNTS RECEIVABLE 43 365 = = CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved CHILDREN’S CLOTHING INC. (OPENING BALANCE SHEET) Accounts Receivable $30 000 $40 000 Inventory $50 000 $55 000 Prepaids 0 $80 000 $95 000 Fixed Assets $33 000 Total Assets $113 000 $128 000 I ( SMALL BUSINESSES )
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New Venture and Small Business Management 3 Copyright © 1999 Jon Kerr and Captus Press Inc. All right reserved SALES 3000 7000 12000 16000 19000 21000 COST OF GOODS SOLD VARIABLE 1950 4550 7800 10400 12350 13650 FIXED 2000 2000 2000 2000 2000 2000 GROSS PROFIT (950) (450) 2200 3600 4650 5350 SELLING, ADMIN AND FINANCES 4500 4500 4500 4500 4500 4500 NET INCOME (5450) (4950) (2300) (900) 150 850 CUMULATIVE (5450) (10400) (12700) (13600) (13450) (12600)
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