CHAPTER 5

FINANCIAL PLAN
In this chapter, you will start with your major
financial assumptions which you will need in
computing your projected financial statements.
First,
- Present your sources of capital for your
project
- Present next, the terms and conditions of
your creditors, if any
 Present your financial assumptions by enumerating
them. The following considerations may guide you in
this topic:
Your project timetable and number of projection
years
Sales and collections
Depreciation formula used
Tax rates and exemptions
Inventories: beginning and ending for all your raw
materials, work-in-process, and finished goods
Dividends to be declared, if any
Inflation rate, price level changes, foreign exchange
rates
 Present your pre-operating periods balance
sheet and cash flow statements
Present then your projects operating periods
financial statements: statements of financial
position, cash flows, statement of
comprehensive income (loss) for all your
projection years
 Present your financial ratios, rates of return,
and payback period
For each of the computed figures above,
explain their significance to your project
Present then, your projects BEPs and an
analysis