Business Plan Report: Financial Analysis, Statements, & Projections

This report provides a detailed business plan with a strong emphasis on financial analysis. It begins by highlighting the importance of financial projections in determining business viability and profitability, specifically for a new startup. The analysis includes a two-year projection with a focus on revenue...Read More

Running head: BUSINESS PLAN
Business Plan
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Financial Analysis...........................................................................................................................3
Income Statement........................................................................................................................3
Balance Sheet...............................................................................................................................4
Cash Flow Statement...................................................................................................................4
References........................................................................................................................................6

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Financial Analysis
Financial Analysis is an important technique for determining the overall business
viability and profitability. In order to determine the overall business feasibility it is important
that the financial projection done for the company include several sources of revenue and
expenses for the company. The financial projection for the new start-up business was done for a
sum of two-years where relevant analysis was done in order to analyse and visualize the financial
performance of the company (Burns & Dewhurst, 2016). The financial analysis for the new start-
up company was done with the help of various income and expenditure projections for the new
start-up and the associated benefits that the company will be getting from the same. Profitability
will be a key measure for assessing the financial feasibility of the business, thus return on equity
will be the key measure for assessing the overall business profitability.
Income Statement
The income statement for the new start-up capital fund was done with the help of various
income projections and the associated costs of goods sold that will be directly attributed to the
business (McKeever, 2016). On an overall basis, the income statement of the company will be
including revenue as the only cash inflow for the company. The projected income statement and
the cash flow statement for the new start-up plan was drawn with the help of the various sources
of income and the sources of expenses that the company will be incurring in the trend period
analysed for the new start-up company. The revenue for the company in the first year is assumed
to be $4.8 million and the associated cost of sales for the business will be around 45% of the total
sales done. There were various operational and direct expenses that the company will be
incurring which will be primarily in the field of rental expenses, salary and wages, sales and

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marketing expenses, and other key expenses like interest and preliminary expenses. The total
amount of operational expenses that the company will be incurring is around $1.53 million. Net
Profitability for the company in the first year will be around $1.22 million and for the second
year the same will be around $0.85 million. In terms of return generated on the equity investment
an all-around 19% will be the total equity return that the company will be generating for the
business. In the second year of operation the company will be generating an all total of 13%
return on equity investment.
Balance Sheet
The balance sheet shows the financial position of the assets and liabilities of a company
for a stated point of time. Information’s depicted in the financial position of the company are

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well adhered with company policies where relevant sources of borrowing that the company will
be deploying for financing the asset were well noted down. It is important to strike a balance
between an optimum sources of financing that the company will be deploying for the purpose of
financing the operations of the company. The balance sheet for the company will be useful for
the investor in assessing the overall financial position of the company in terms of value of equity
shareholders and the respective performance of asset management done by the management of
the company. Optimum and efficient utilization of the resources can be well done with the help
of the assets that are deployed in the business operations and the application of the same in
generating revenue for the company (Ward, 2016).

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Cash Flow Statement
In terms of financial accounting the cash flow statement shows the changes in the cash
position of the company reflecting the changes in the Balance Sheet Accounts and the associated
income affecting the cash and cash equivalents for the company. The net cash flow period for the
first year will be $11.4 million and $9.51 million for the second year (Cornwall, Vang &
Hartman, 2016).
The overall business feasibility was well figured out with the amount of profit generated
by the company for the year 2019-2020 undertaken into analysis. Growth in the revenue and the
associated profitability margin will be helping the investor’s asses the important aspect of
business. Financial risk and business risk were the two primary concerns that were addressed and
the same has been well addressed with the optimum sources of finance that the company will be
amending in the capital structure. In order to keep the financial risk of the company at a minimal
point of time debt financing has been kept at a very low rate so that the cost of debt does not
interrupt the overall business operations.

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References
Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship. Macmillan
International Higher Education.
Cornwall, J. R., Vang, D. O., & Hartman, J. M. (2016). Entrepreneurial financial management:
An applied approach. Routledge.
McKeever, M. (2016). How to write a business plan. Nolo.
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.