financial statements

financial statements - e-Business Plan Financial...

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e-Business Plan: Financial Statements "Money is the lifeblood of business." This truism points out the importance of the financial statements section of the business plan. The financial statements (or the "financial plan") is one of the most closely scrutinized sections of any business plan. Investors have been known to go from the executive summary straight to the financial statements to judge the merit of a business plan. Your business plan must address the financial issues of cash flow, start-up capital and, of course, profit. However, this is not an accounting or finance tutorial. Furthermore, if you are a business student it is likely you have taken, or are taking, an accounting course. We don't propose to duplicate all that content here. Therefore, some knowledge of accounting principles and financial statements is assumed. The purpose of this lesson is to describe the fundamental requirements for a financial plan in an e-business plan and outline the financial statements that are required, without defining every accounting term that is used. For each of the financial statements, an Excel spreadsheet template has been developed and can be downloaded by clicking on the related link. You will need to add, delete, and change the items in the spreadsheet to meet the requirements of your individual business plan. This lesson concludes with some suggestions how to put all the e-business plan pieces together into a coherent plan. The lesson outline is: What is a Financial Plan? The Financial Statements --Start-up budget --Income and expense statement --Balance sheet --Cash flow statement Putting it All Together What is a Financial Plan? The previous sections of the business plan define what the business intends to produce and how it will do so. The financial plan estimates the monetary resources and flows that will be required to carry out the business plan. The financial plan also indicates when and by how much the business intends to be profitable. Finally the financial statements tell a lot about the entrepreneur in terms of business commitment and financial wherewithal to make the business a profitable success. In addition to the financial statements, a financial plan includes a list of assumptions upon which the financial statements are based. Clearly stating your financial assumptions serves two purposes: it allows investors to know what is behind the numbers and it helps you to know the financial impact when the basis of your assumptions changes.
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Assumptions are most important in "soft numbers" such as projected sales and interest rate projections. "Hard numbers" such as rent, computers, and Web site hosting costs can be
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This note was uploaded on 02/26/2012 for the course CSR 480 taught by Professor Staff during the Fall '08 term at Purdue.

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financial statements - e-Business Plan Financial...

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