Financial Plan

“where the money comes from and where it goes”.

- It translates into monetary terms the various plans you have for the business.

Fixed Cost – also known as indirect costs or overhead costs, are business that are not dependent on
the level of goods or services produced by the business.

Variable Cost – an expenses that rises or falls in direct proportion to production volume.

Includes the following:

1. Profit and Loss Statement (P&L) – presents details regarding sales and expenses incurred or
will be incurred by the business as of a given date.

2. Balance Sheet – present details of what the business owns and its value.

3. Cash Flow Statement – presents in details in details the projected cash expenses and
disbursement for a given period.

FINANCIAL ANALYSIS

- Consists of computations of profitability, liquidity and marketability of the enterprise based on the
information from the profit and loss statement and the balance sheet.

SOCIAL-COST BENEFIT ANALYSIS

- Requires you to look at the benefits and the costs that will accrue to society in general if your
prospective business is established.

Example:

Employment Generated

Taxes Paid