Question

Create a Financial plan for a start up corporation who would provide a app that would make it easier for students to apply to colleges.

• MUST BE 5 PAGES long

• MUST HAVE BALANCE SHEETS

•. MUST HAVE A SURVEY FOR THE STUDENTS

Answer 1

• Initiate with a revenue forecast. Set up a excel projecting your sales over the period of three years. Set up distinct sections for different series of sales and columns for every month for the first year and either on a monthly or quarterly basis for the 1st and 3rd years. Usually you want to showcase in excel blocks that comprise one block for unit sales, one block for pricing, a third block that multiplies units times price to consolidate sales, a fourth block that has unit costs, and a fifth that multiplies units times unit cost to calculate cost of sales (also called COGS or direct costs), "Why do you want cost of sales in a sales forecast? Because you want to calculate gross margin. Gross margin is sales less cost of sales, and it's a quite necessary number for comparing with different benchmark industry ratios." If it's a new product or a new line of business, you have to make an educated guess. The best way to do that, is to look at past results.

• Generate an expenses budget. You're going to require to grasp how much it's going to cost you to actually make the sales you have projected. Firstly, differentiate between fixed costs (like rent and payroll) and variable costs (most likely advertising and promotional expenses), because it's a good thing for a business to know. "Lower overhead costs mean less risk, which might be subjective in business schools but are very concrete when you have rent and payroll checks to sign. "Majorly of your non-fixed costs are in those direct costs that belong in your sales forecast, but there are also some variable expenses, like ads and rebates and such." Once again, this is a projection, not accounting, and you're going to have to estimate things like interest and taxes. I would highly recommend you go with simple mathematics. He says multiply estimated profits times your best-guess tax percentage rate to estimate taxes. And then multiply your estimated debts balance times an estimated interest rate to estimate interest.

• Cultivate a cash-flow statement. This is the statement that shows physical dollars moving in and out of the business. "Cash flow is the team lead, You base this partly on your sales forecasts, balance sheet items, and other assumptions. If you are operating an existing business, you should have past documents, such as income statements and balance sheets from years past to base these forecasts on. If you are commencing a new business and do not have these historical financial statements, you start by projecting a cash-flow statement broken down into 12 months. Well, it's important to understand when compiling this cash-flow projection that you need to choose a realistic ratio for how many of your invoices will be paid in cash, 30 days, 60 days, 90 days and so on. You don't want to be surprised that you only collect 80 percent of your invoices in the first 30 days when you are counting on 100 percent to pay your expenses, Certain business planning software programs will have these formulas built in to help you make these projections.

• Income Forecasting. This is your pro forma profit and loss statement, detailing forecasts for your business for the coming three years. Use the numbers that you put in your sales forecast, expense projections, and cash flow statement. "Sales, lest cost of sales, is gross margin. "Gross margin, less expenses, interest, and taxes, is net profit."

• Arrangement with assets and liabilities. You also need a projected balance sheet. You have to deal with assets and liabilities that aren't in the profits and loss statement and project the net wealth of your business at the end of the fiscal year. Some of those are discernible and affect you at only the beginning, like startup assets. A lot are not palpable. "Interest is in the profit and loss, but repayment of principle isn't. "Taking out a loan, giving out a loan, and inventory show up only in assets--until you pay for them." So the way to accumulate this is to start with assets, and estimate what you'll have on hand, month by month for cash, accounts receivable (money owed to you), inventory if you have it, and substantial assets like land, buildings, and equipment. Then figure out what you have as liabilities--meaning debts. That's money you owe because you haven't paid bills (which is called accounts payable) and the debts you have because of unsettled loans.

• Breakeven evaluation. The breakeven point, is when your business's expenses match your sales or service volume. The three-year income prognostication will enable you to assume this analysis. "If your business is sustainable, at a certain period of time your overall revenue will exceed your overall expenses, including interest." This is an important analysis for conceivable financiers, who want to know that they are investing in a fast-growing business with an exodus strategy.

Current Assets Cash $10,000 Accounts Receivable $20,000 Inventory $8,000 Pre-Paid Insurance   $2,400 Total Current Assets $40,400 Capital Assets Macheriny & Equipment   $36,000 Automobiles $40,000 Leasehold Improvements.   $48,000 Total Capital Assets. $124,000	Current Liabilities Line of Credit $4,000 Accounts Payable $3,000 Wages Payable $2,000 Current Portion of Term Debt $4,000 Total Current Liabilities   $13,000 Non-Current liabilities Term Loan   $40,000 Less Current Portion -$4,000 Shareholders Loan   $60,000 Total Non Current Liabilities. $96,000 Equity Initial Investment $40,000 Retained Earnings   $15,400 Total Equity    $55,400