Business Finance for Managers

BUSINESS FINANCE FOR
MANAGERS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Business idea and sources of funding..........................................................................................1
Discussing the fixed and variable cost.........................................................................................2
Forecasting profit.........................................................................................................................3
Calculation of cash flow or the first year.....................................................................................4
Calculation of the break-even point ............................................................................................5
Key performance indicators.........................................................................................................6
RECCOMENDATIONS..............................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business finance is the credit and the funds which are useful for the business. Finance in
a business requires purchasing of assets, raw materials, goods and other things required for the
flow of economic activities. In this project the chosen business idea is football boots. This
project will analyse this business idea and also analyse the sources for the funding of this
business idea. In this project the fixed and variable cost related to the production of football
boots will be discussed. This project will help in forecasting the profit of the business plan. With
the help of this project the calculation of budgeted cash flow can be done. This project will also
help in analysing the break-even point and the margin of safety of the company. This project will
conclude with the recommendations to the following idea.
MAIN BODY
Business idea and sources of funding
The chosen business idea for this project is the production of football boots. Football is
considered one of the greatest sport in the world. This sport is having millions of fans all over the
world. For playing this there are specifically designed boots which helps the player with their
game (Black and et.al., 2018). This is the reason for the selection of the product as the business
idea. This business idea will require funds for starting its production and operations. The source
from which this business idea can generate funding are,
Personal investment :
For starting a business fund are required. The person which is starting its business can
invest the cash or asset in this idea for starting the business (Bongini and et.al., 2019)
Borrowed money :
For starting of a business when the funds are borrowed from some relative of friends such
a source of funds is known as Borrowed money.
Venture capital :
Venture capitalists are people which lend money to businesses and companies for their
activities. This involves the company losing some ownerships as the form of equity and the
venture capitalist also expect high returns from the business.
Angels :
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Angel investors are individual which invest money in a new business or business for its
expansion. These individual are provide capital in the exchange of convertible debt or ownership
equity.
Bank Loans :
Banks provide loans for small or medium-sized business. The procedure of the sanction
of loan is lengthy. The interest of the bank loans are fairly low and the business can use this for
generation of funds.
Discussing the fixed and variable cost
Costs of the operations and production for football boots. There are two different types of
cost which a business has to incur. These are Fixed cost and Variable cost. Fixed cost are
predetermined expenses which are fixed for a specific period for the business. Variable cost are
those cost which changes, but they are directly responsible for the operations of the company
(Coakley and Huang, 2020). There are different types of fixed cost which the business idea will
have to face,
Rent :
For the production of football boots the business will require location a facility. The rent
the business will have to pay for that is its fixed cost.
Telephone and internet costs :
For the communication between the team members of the company facilities of telephone
and internet is required these expenses are fixed for the business.
Insurance :
The insurance is taken by the business for its goods, machinery and also its employees.
For this insurance the business needs to give insurance premium to the insurance company as
fixed cost.
Employee Salaries :
The salaries and the wages of the employees are also fixed cost for the business.
Loan payments :
Payment of instalments for the loans taken by the business is also a fixed cost (Molanoori
and et.al., 2018).
The variable costs for this business idea are,
Commissions :
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