The financial section of a business plan is the most important part for investors. He must disclose the financial essence of the project in three main forms: the income statement, the statement of cash flows and the balance sheet. In this case, the indicators of these forms are calculated for at least three or five years with a quarterly or monthly breakdown.
Instructions
Step 1
In the profit and loss statement, you need to reflect whether your project will be profitable, how much money you will have after all the necessary expenses have been completed. But at the same time, this report does not reflect the real value of your company. The business may start to lose money, but its value may remain high for a long period of time. Or the firm may be profitable, but not solvent enough to pay off the invoices.
Step 2
In this regard, you need to draw up a cash flow forecast report. It reflects the company's solvency, the availability of funds to pay bills. This report is the most important financial document of a business plan. At the same time, it does not characterize the company's profit, it only reflects the movement of money in the accounts and in the cash desk of the enterprise. When designing this form, show separately cash flows from sales of products and from other activities, for example, interest on bank deposits, income from securities, etc. This will allow you to clearly understand the sources of funds and the possibility of selling your products on credit.
Step 3
The balance is needed to show investors how much your venture is worth. It gives an instant picture of the size of assets, equity and debt capital of the company, its liquidity and solvency. The balance sheet reflects the value of the company's property (fixed and circulating assets), as well as the sources of their formation. The balance sheet is no less important document than the income statement, since it allows you to estimate how much the company is going to invest in assets of different types and how management is going to finance their creation or acquisition.
Step 4
For a more visual display of the financial processes occurring at the enterprise, create a break-even graph. In financial terms, it is a diagram showing the impact on profit of indicators such as volume of production, selling price and cost of production. With the help of such a graph, a break-even point is determined - such a volume of production at which the curve showing the change in sales proceeds intersects with the curve of the cost of production at a given price level.
