THE FINANCIAL MANAGEMENT ASSESMENT

Running head: FINANCIAL MANAGEMENT
Financial Management:
Name of the Student:
Name of the University:
Author’s Note:

FINANCIAL MANAGEMENT1
Executive Summary
The aim of the assignment is to evaluate the business start-up project that Mr. Isaac will be
evaluating based on the various cash flows that the company expects to receive from the business
operations of the company. The new startup operations of the company would be initiated in
Toronto, Canada. The business operations would be for a sum of seven years of time period
whereby relevant cash flows that would be flowing to the company would be considered. In
order to well analyze the feasibility of the business operation a valuation model would be applied
that is discounted cash flow approach whereby relevant cash flows flowing to the company
would be well taken into consideration. The business operations of the new startup venture has
been drawn on a monthly basis and on an annual basis. The business operations of the company
would be primarily distributed into key parts, in the first part the company would be well
receiving its revenue from the sales of goods in the Canada itself. While the other half of the
business revenue would be coming from the Toronto Business Collaboration from Mr. Jane who
runs a travel agent business in the Toronto. The business collaboration would be for a sum of two
years and in order to better analyze the cash flows respectively flowing from this collaboration
we have created a monthly budgeted cash flow statement for the company. The net present value
for the project has been positive for the company for the overall seven year trend period that has
been analyzed. The project feasibility was found to be on a positive scale for Mr. Isaac new
project venture and it is well recommended that he should accept the project. It is important to
note that there were several assumptions and figures base which were planned out for the
company and if the same materializes then Mr. Isaac on a turn would be creating a wealth of
around CAD 118,713 from the business, that is around 16.07% of return from the initial
investment of CAD 456,700 that would be done by the company.

FINANCIAL MANAGEMENT2
Table of Contents
Business Project Analysis................................................................................................................2
Assumptions, Estimates and Sensitivity Analysis...........................................................................3
Key Assumptions and Estimates.................................................................................................3
Sensitivity Analysis.....................................................................................................................5
Cash Flow and Viability Analysis...................................................................................................7
Other Financial Details..................................................................................................................11
Finance/Capital Available.........................................................................................................11
Depreciation Expenses...............................................................................................................11
Profit and Loss Statement..........................................................................................................12
Sales Growth..............................................................................................................................13
Purchase Cost Analysis..............................................................................................................13
Critical Reflection..........................................................................................................................14
References......................................................................................................................................15

FINANCIAL MANAGEMENT3
Business Project Analysis
The business analysis of the new project has been analyzed based on the cash flows that
would be flowing from the project for a sum period of seven years. Mr. Isaac in particular would
be running down a line of business in which he would be considering buying chocolates from
AlpenChoc, which is located in Germany and would be allowing Mr. Isaac to well sell their
associated range of product for an upfront premium for a seven year of trend period. The
business operations of the company would be simple it would be by buying chocolates from
Germany at a discounted rate and then selling the same at the estimated selling price in order to
earn profits. The chocolates considered varies from the normal range and types of chocolates that
are offered in the market. Mr. Isaac would be buying Artistic Innovative Flavored Chocolates
which would be having a sound demand as the same would be introduced in the market for the
first time. Expenses in particular would be in the field of shipping cost from Germany to Canada,
Purchase Cost of Products, Wages and Salaries, Credit Card Expenses and Depreciation
Expenses will be some of the key expenses that the company would be incurring for the trend
period. In particular Mr. Isaac has also well managed to go through a business operation or
business agreement with Mr. Jade who has well agreed to enter into a two year business
agreement for buying a defined set of chocolates units for its travel customers. The cash flow
analysis has been done separately for both the operations that the company would be running and
that would be helping us better analyze the cash flows that is flowing from each of the operations
of the company (Levin and Hallgren 2017). Several assumptions has been made with respect to
the business operations and cash flows that were forecasted for the company and accordingly
detailed discounted cash flow model has been built. The initial sum of money with which the