The financial plan outlines pre-operational expenses totaling KSH 131,200 and includes detailed balance sheets for 2023, showing total assets of KSH 981,200. It estimates working capital needs at KSH 109,500 and provides a cash flow statement projecting total cash inflow of KSH 7,970,000. Additionally, it includes an income statement for Ruth Compumber Assembling Enterprises, indicating a gross profit of KSH 1,650,000 and various profitability ratios for the years 2023 to 2025.
The financial plan outlines pre-operational expenses totaling KSH 131,200 and includes detailed balance sheets for 2023, showing total assets of KSH 981,200. It estimates working capital needs at KSH 109,500 and provides a cash flow statement projecting total cash inflow of KSH 7,970,000. Additionally, it includes an income statement for Ruth Compumber Assembling Enterprises, indicating a gross profit of KSH 1,650,000 and various profitability ratios for the years 2023 to 2025.
The financial plan outlines pre-operational expenses totaling KSH 131,200 and includes detailed balance sheets for 2023, showing total assets of KSH 981,200. It estimates working capital needs at KSH 109,500 and provides a cash flow statement projecting total cash inflow of KSH 7,970,000. Additionally, it includes an income statement for Ruth Compumber Assembling Enterprises, indicating a gross profit of KSH 1,650,000 and various profitability ratios for the years 2023 to 2025.
The financial plan outlines pre-operational expenses totaling KSH 131,200 and includes detailed balance sheets for 2023, showing total assets of KSH 981,200. It estimates working capital needs at KSH 109,500 and provides a cash flow statement projecting total cash inflow of KSH 7,970,000. Additionally, it includes an income statement for Ruth Compumber Assembling Enterprises, indicating a gross profit of KSH 1,650,000 and various profitability ratios for the years 2023 to 2025.
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CHAPTER FIVE
5.0. FINANCIAL PLAN
This is the cost estimated before the business operations begin. It is illustrated in the table
5.1. PRE – OPERATIONAL EXPENSES
ITEMS AMOUNT
Advertisement 12000
Trade promotion 5000
Transport 30000
Invest 90000
Rent deposit 5000
TOTAL 131200
5.2 BALANCE SHEET
5.2.1 BALANCE SHEET 2023 ITEMS AMOUNT ITEM AMOUNT
FIXED ASSETS LONG TERM LIABILITIES
Premises 60000 Purchases 40000 Raw materials 108000 Insurance 19200 CURRENT ASSETS CURRENT LIABILITIES Debtors 30000 Creditors 120000 Cash in hand 3390000 Bank overdraft 12000 Cash at bank 1550000 stock
CURRENT ASSETS Debtors 30000 Cash in hand 100000 Cash at bank 120000
TOTAL ASSETS 981200 981200
5.3 ESTIMATION OF WORKING CAPITAL
This is the amount of money needed to run the business on a daily basis.
CURRENT ASSETS COST
Stock of raw materials 108000
Cash at hand 20000
Cash at bank 10000
Debtors 30000
TOTAL 258000 CURRENT LIABILITIES
creditors 120000
Bank overdraft 12000
Salaries 16500
TOTAL 148500
Working capital = general assets – current liabilities
= 258000 – 148500 = 109500 5.4CASH FLOW STATEMENT 5.4.1 PRE – OPERATONAL OF CASH FLOW CHART 2023 MONTHS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
100000 X 100/2480000 1590000 X 100/2420000 200000 X 100/2290000
Rate of stock= Rate of stock= Rate of stock=
Cost of sales / average Cost of sales / average Cost of sales / average 2480000/399000 2420000/399000 2290000/399000
5.8 PROFITABILITY RATIOS
YEAR 1 Working capital= CA – CL 300000 – 150000 =150000 Current ratio= CA – CL 300000/150000 2:1 YEAR 2 Working capital= CA – CL 367000 – 167000 =200000 Current ratio= CA – CL 367000/167000 2:1
5.9 EXPECTED PROFITABILITY RATIOS FOR THE YEAR 2023
Gross profit margin=gross profit/sales*100%
=250000/3000000*100 =83.33% Return on investment=net profit/capital employed*100% =300000/400000*100% =75% Net profit margin=net profit/sales*100% =300000/3000000*100% =10%
