Financial Plan

Start-up capital
Facilities & Equipment Requirement
Sr. No Description No. Of Units
1 Laptop 2
2 Internet Connection 1
3 Electricity Connection 1
4 UPS 1
5 Air Conditioner 1
6 Furniture and Fixtures
7 Security Deposit (Office)
8 Printer 1
9 Digital Marketing
10 Legal Fee
11 Company Registeration/Incorporation Fee
TOTAL

Working capital
In this illustration we assume it to be equal 3 months fixed operating expenses
Sr. No Description Per Month Cost (Rs.)
1 Office staff 3 months salary 180,000
2 Rent expense of 3 months 30,000
3 Electricity Bill of 3 months 18,000
4 other utilities expenses of 3 months 21,000
5 Marketing Expense of 3 months 15,000
TOTAL 264,000

Start-up Capital
Sr. No Description Amount (Rs.)
1 Facilities & Equipment requirement 241,000
2 Working Capital (Same as B) 264,000
Total Start-up capital Required 505,000

SOURCES OF FINANCE
Capital structure
Capital structure Amount (Rs.)
Equity 290,000
Debt 290,000

PROSPECTED FINANCIAL STATEMENTS

Step 1: Describe the source of revenue
Step 2: Decide Selling Price
Step 3: Prepare Sales Budget
Month No. of units likely to be sold Selling Price
1 40 3,500
2 49 3,500
3 37 3,500
4 52 3,500
5 65 3,500
6 59 3,500
7 75 3,500
8 69 3,500
9 83 3,500
10 76 3,500
11 96 3,500
12 98 3,500
Total

Step 4: Prepare costs budget

1) Cost of goods sold
CGS
Product Cost per Unit No. of Units Unit/Rate
Purchasing Cost 799 1,500
TOTAL

Prepare Income Statement

Year-0 Year 1
Revenue 2,796,500
Less: CGS (1,198,500)
Gross Profit 1,598,000
Less: Other Operating expenses (1,177,400)
Operating Profit 420,600
Less: Loan Interest expenses @8% (23,200)
Less: Other Miscll. expenses (70,000)
Profit Before Tax 327,400
Less: Tax (25%) (81,850)
Profit After Tax 245,550

Prepare Balance Sheet

Year-0 Year 1
ASSETS
Office Furniture 25,000 22,500
Air Conditioner 50,000 45,000
Laptops 50,000 45,000
Printers 7,000 6,300
UPS 12,000 10,800
Inventory 75,000 225,000
Security Deposit (Office) 30,000 30,000
Prelimenry Expenses 67,000 -
Cash at Bank - 368,600
Cash In hand 264,000 32,350
Total Assets 580,000 785,550
EQUITY
Opening Capital 290,000 290,000
Profit - 245,550
Drawings - (40,000)
Total EQUITY 290,000 495,550
LIABILITIES
Loan 290,000 290,000
Total Equity & Liabilities 580,000 785,550
- -

FINANCIAL ATTRACTIVENESS
Ratio Analysis
Illustration (Calculation Financial Ratios)*
Year-0 Year 1
GPM 57%
NPM 9%
ROE 85%

Break-even point Year-0 Year 1

Illustration (Break-even Point)
Break-even point = 589

Payback Period
Payback Period is the period in which initial investment is recovered”
Illustration (payback period)
Year Cash Flows Cumulative Cash Flows
0 (580,000) (580,000)
1 435,000 (145,000)
2 599,900 454,900
3 419,000 873,900
4 689,000 1,562,900
Payback Period =

=Year before full recovery+(Operating Profit/Revenue)

1+(599,900/2,796,500)
1.21 Years
n

Requirement
Cost per Unit (Rs.) Amount (Rs.)
25,000 50,000
2,000 2,000
10,000 10,000
12,000 12,000
50,000 50,000
25,000 25,000
30,000 30,000
7,000 7,000
20,000 20,000
10,000 10,000
25,000 25,000
241,000

Depreication Preliminary Expenses Through out year

14,400 67,000
14,400

1,137,400
1,070,400
 Revenue (Rs.)
140,000
171,500
129,500
182,000
227,500
206,500
262,500
241,500
290,500
266,000
336,000
343,000
2,796,500 1,740,500

Amount (Rs.)
1,198,500
1,198,500

ome Statement
Year 2 Year 3 Year 4
3,150,200 3,120,000 4,074,000
(1,409,300) (1,520,000) (2,134,000)
1,740,900 1,600,000 1,940,000
(1,155,400) (1,195,400) (1,265,400)
585,500 404,600 674,600
(23,200) (23,200) (23,200)
(90,000) (97,000) (113,500)
472,300 284,400 537,900
(118,075) (71,100) (134,475)
354,225 213,300 403,425

alance Sheet
Year 2 Year 3 Year 4

20,000 17,500 15,000 2500

 40,000 35,000 30,000 5000
40,000 35,000 30,000 5000
5,600 4,900 4,200 700
9,600 8,400 7,200 1200
297,500 370,500 424,600
30,000 30,000 30,000
- - -
393,925 190,650 320,600
42,600 56,350 41,825
879,225 748,300 903,425

290,000 290,000 290,000

354,225 213,300 403,425
(55,000) (45,000) (80,000)
589,225 458,300 613,425

290,000 290,000 290,000

879,225 748,300 903,425
- - -

Year 2 Year 3 Year 4

55% 51% 48%
11% 7% 10%
71% 36% 88%

Year 2 Year 3 Year 4

550 598 633

Op. Profit Dep Add Back Net Cash flow

420,600 14,400 435,000
585,500 14,400 599,900
404,600 14,400 419,000
674,600 14,400 689,000