Professional Documents
Culture Documents
(ETR300/ENT300)
MODULE 11 :
FINANCIAL PLAN
committed
To be used as a guideline for project implementation
Operations Plan
Operations Budget
Owners’ Equity
Capital 72,500 72,500 72,500
Accumulated profit 15,400 54,800 125,475
87,900 127,300 197,975
Long-term Liabilities
Term loan 36,000 27,000 18,000
Hire-purchase 16,000 12,000 8,000
52,000 39,000 26,000
Total Owners’ Equity & Liabilities 139.900 166,300 223,975
Owners’ Equity
Capital 105,500 105,500 105,500
Accumulated profit 24,000 82,850 222,545
129,500 188,350 328,045
Long-term Liabilities
Term loan 132,000 99,000 66,000
Current Liabilities
Accounts payable 9,000 15,000 21,600
• Liquidity Ratios
The term liquidity refers to the availability of liquid
assets to meet short-term obligations. Thus,
liquidity ratios measure the ability of the business
to pay its monthly bills.
• Efficiency Ratios
• Solvency Ratios
This final category of ratios is designed to help the
entrepreneur measure the degree of financial risk that
his business faces. By referring to this ratio, the
entrepreneur can assess his level of debt and decide
whether it is appropriate for the business.
The most commonly used solvency ratios are total
debt (liabilities) to equity (also known as leverage or
gearing), total debt to total assets, and times interest
earned (also known as interest coverage).