Section 8

Financial Plan
5.0 INTRODUCTION TO FINANCIAL PLAN

The financial is the last step in the preparation of the business plan. It is the most crucial aspect of the
business plan and involve the calculation of the total project cost, the choices of financial source and
the preparation of financial projection in term of proforma statement which include the cash flow,
income statement and balance sheet.

In addition, the financial statement should be supported by depreciation schedule for every fixed
asset owned as well as amortization schedule loan for repayment. The financial plan is prepared after
all budgets pertaining to marketing, operation and administrative aspects are completed.

THE IMPORTANT OF FINANCIAL PLAN

 To determine the size of investment
 To ensure the initial capital is sufficient
 To identify the relevant cost of finance
 To be used as a guideline in running the business

PURPOSE OF FINANCIAL PLAN

 To control and ensure the flow of money is in the right position
 To make a budget for the next accounting period
 To provide a bonus if generate income higher than previous

THE SOURCES OF DATA USED IN FINANCIAL BUDGET

 Administration expenses
 Operation expenses
 Marketing expenses
  Project Implementation Cost Schedule

Project Implementation Cost

Requirements Cost

Fixed Assets

Land & Building 5,000

Office furniture and fittings 6,900

Office Equipment 6,760

Signboard 1,000

Machinery and equipment 9,898

Working Capital months 1 34,275

Other Expenses 4,262

Contingencies 5% 3,405

TOTAL 71,500
  Sources of Finance Schedule

Suggested Sources of Financing

Loan Hire-Purchase Own Contribution

Cash Existing Assets

- - 5,000 -

- - 6,900

- - 6,760 -

- - - -

- - - -

- - 1,000 -

- - - -

- - 9,898 -

- - - -

- - - -

- - - -

34,275 -

4,262 -

3,405 -

41,942 - 29,558 -
  Loan Amortization (Repayment) Schedule

LOAN REPAYMENT SCHEDULE

Total 41,942

Interest Rate 7%

Duration (years) 6

Method Flat Rate

Year Principal Interest Total Payment Principal Balance

- - 41,942

1 6,990 2,936 9,926 34,951

2 6,990 2,936 9,926 27,961

3 6,990 2,936 9,926 20,971

4 6,990 2,936 9,926 13,981

5 6,990 2,936 9,926 6,990

6 0 0 - 6,990

7 0 0 - 6,990

8 0 0 - 6,990

9 0 0 - 6,990

10 0 0 - 6990
  Fixed Asset Depreciation Schedule

Name of Assets Office furniture and fittings

Cost (RM) 6,900

Method of Depr. Straight Line

Duration (years) 5

Annual Accumulated

Year Depreciation Depreciation Book Value

- - 6,900

1 1,380 1,380 5,520

2 1,380 2,760 4,140

3 1,380 4,140 2,760

4 1,380 5,520 1,380

5 1,380 6,900 -

6 0 0 -

7 0 0 -

8 0 0 -

9 0 0 -

10 0 0 -

Name of Assets Office Equipment

Cost (RM) 6,760

Method of Depr. Straight Line

Duration (years) 5

Annual Accumulated

Year Depreciation Depreciation Book Value

 - - 6,760

1 1,352 1,352 5,408

2 1,352 2,704 4,056

3 1,352 4,056 2,704

4 1,352 5,408 1,352

5 1,352 6,760 -

6 0 0 -

7 0 0 -

8 0 0 -

9 0 0 -

10 0 0 -

Name of Assets Signboard

Cost (RM) 1,000

Method of Depr. Straight Line

Duration (years) 5

Annual Accumulated

Year Depreciation Depreciation Book Value

- - 1,000

1 200 200 800

2 200 400 600

3 200 600 400

4 200 800 200

5 200 1,000 -

6 0 0 -

7 0 0 -

8 0 0 -

9 0 0 -

10 0 0 -
Name of Assets Machinery and equipment

Cost (RM) 9,898

Method of Depr. Straight Line

Duration (years) 5

Annual Accumulated

Year Depreciation Depreciation Book Value

- - 9,898

1 1,980 1,980 7,918

2 1,980 3,959 5,939

3 1,980 5,939 3,959

4 1,980 7,918 1,980

5 1,980 9,898 -

6 0 0 -

7 0 0 -

8 0 0 -

9 0 0 -

10 0 0 -

 Proforma Cashflow Statement

Rafen’s Cafe

PRO FORMA CASH FLOW STATEMENT

YEAR YEAR
MONTH 1 2 3 4 5 6 7 8 9 10 11 12 TOTAL
2 3

CASH INFLOWS

Owners' Capital
(cash) 29,558 - - - - - - - - - - - 29,558 - -
Bank Loan 41,942 - - - - - - - - - - - 41,942 - -

42,93 42,93 42,93 42,93 42,93 42,93 515,17 540,93 567,97

Cash Sales 42,931 1 1 1 1 1 1 42,931 42,931 42,931 42,931 42,931 2 1 7

Collection of
Accounts
Receivable - - - - - - - - - - - - - - -

TOTAL CASH
114,43 42,93 42,93 42,93 42,93 42,93 42,93 42,931 42,931 42,931 42,931 42,931 586,67 540,93 567,97
INFLOWS
1 1 1 1 1 1 1 2 1 7

CASH PAYMENTS

Administrative
Expenses

15,50 15,50 15,50 15,50 15,50 15,50 186,00 195,30 205,06

Remuneration 15,500 0 0 0 0 0 0 15,500 15,500 15,500 15,500 15,500 0 0 5

Wi-Fi 195 195 195 195 195 195 195 195 195 195 195 195 2,340 2,457 2,580

Utilities 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 16,800 17,640 18,522

- - - - - - - - - - - - - - -

- - - - - - - - - - - - - - -

- - - - - - - - - - - - - - -

- - - - - - - - - - - - - - -

Marketing
Expenses

- - - - - - - - - - - - - - -

0 - - - - - - - - - - - - - - -

0 - - - - - - - - - - - - - - -

0 - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - -

Operations
Expenses

Cash Purchases 3,226 3,226 3,226 3,226 3,226 3,226 3,226 3,226 3,226 3,226 3,226 3,226 38,712 40,648 42,680

Payment of
Accounts Payable - - - - - - - - - - - - - - -

Carriage Inwards &

Duties - - - - - - - - - - - - - - -

Salaries, EPF & 13,95 13,95 13,95 13,95 13,95 13,95 167,44 175,82 184,61
SOCSO 13,954 4 4 4 4 4 4 13,954 13,954 13,954 13,954 13,954 8 0 1

- - - - - - - - - - - - - - -
 - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - -

Deposit - - - - - - - - - - - - - - -

Registration &
Licences 150 - - - - - - - - - - - 150 - -

Insurance & Road

Tax 1,200 - - - - - - - - - - - 1,200 1,200 1,200

Other Expenses 2,912 - - - - - - - - - - - 2,912 2,912 2,912

Purchase of Fixed
Assets - Land &
Building 5,000 - - - - - - - - - - - 5,000 - -

Purchase of Fixed
Assets - Others 24,558 - - - - - - - - - - - 24,558 - -

Hire-Purchase
Down Payment - - - - - - - - - - - - - - -

Hire-Purchase
Repayments

Principal - - - - - - - - - - - - - - -

Interest - - - - - - - - - - - - - - -

Loan Repayments

Principal 583 583 583 583 583 583 583 583 583 583 583 583 6,990 6,990 6,990

Interest 245 245 245 245 245 245 245 245 245 245 245 245 2,936 2,936 2,936

Tax - - - - - - - - - - - - - 0 0

TOTAL CASH
68,922 35,10 35,10 35,10 35,10 35,10 35,10 35,102 35,102 35,102 35,102 35,102 455,04 445,90 467,49
OUTFLOWS
2 2 2 2 2 2 6 3 6

EXCESS/
45,509 7,829 7,829 7,829 7,829 7,829 7,829 7,829 7,829 7,829 7,829 7,829 131,62 95,028 100,48
(DEFICIT)
6 1

OPENING 45,50 53,33 61,16 68,99 76,82 84,65 100,31 108,13 115,96 123,79
- 92,481 - 131,62 226,65
BALANCE 9 7 6 5 4 3 0 9 8 7
6 3

ENDING
45,509 53,33 61,16 68,99 76,82 84,65 92,48 100,31 108,13 115,96 123,79 131,62 131,62 226,65 327,13
BALANCE
7 6 5 4 3 1 0 9 8 7 6 6 3 4
 Proforma Trading Account

Rafen’s Cafe

PRO FORMA INCOME STATEMENT

Year 1 Year 2 Year 3

Sales 515,172 540,931 567,977

Less: Cost of Goods Sold

Opening Stock

Purchases 38,712 40,648 42,680

tolak: Closing Stock

Carriage Inwards & Duty - - -

Gross Profit
Less: Expenses

Administrative Expenses 205,140 215,397 226,167

Marketing Expenses - - -

Registration & Licences 150 - -

Insurance & Road Tax 1,200 1,200 1,200

Other Expenses 2,912 2,912 2,912

Interest on Hire-Purchase - - -

Interest on Loan 2,936 2,936 2,936

Depreciation on Fixed Assets 4,912 4,912 4,912

Operations Expenses 167,448 175,820 184,611

Total Expenses 423,409 443,824 465,418

Net Profit Before Tax 91,763 97,106 102,560

Tax 16% 0 0 0

Net Profit After Tax 91,763 97,106 102,560

Accumulated Net Profit 91,763 188,869 291,429

 Proforma Balance Sheet Account

Rafen’s Cafe

PRO FORMA BALANCE SHEET

Year 1 Year 2 Year 3

ASSETS
FIXED ASSETS (Book Value)

Land & Building 5,000 5,000 5,000

Office furniture and fittings 5,520 4,140 2,760

Office Equipment 5,408 4,056 2,704

- - -

- - -

Signboard 800 600 400

- - -

Machinery and equipment 7,918 5,939 3,959

0 - - -

- - -

- - -

24,646 19,735 14,823

CURRENT ASSETS

Deposit - - -

0 0 0

0 0 0

Accounts Receivable - - -

Cash 131,626 226,653 327,134

131,626 226,653 327,134

TOTAL ASSETS 156,272 246,388 341,957

OWNERS' EQUITY

Capital 29,558 29,558 29,558

Accumulated Net Profit 91,763 188,869 291,429

121,321 218,427 320,987

LIABILITIES

Loan Balance 34,951 27,961 20,971

Hire-Purchase Balance - - -

Accounts Payable - - -

Tax Payable 0 0 0

34,951 27,961 20,971

TOTAL OWNER'
EQUITY & 156,272 246,388 341,957
LIABILITIES