Zahra Marziah financial plan1 PDF

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Financial Plan Assumption For a new business plan, we had to make some assumptions about some of the business perspectives. Description

Amount Taka

Cash

5,000,000

Rent

1,200,000

Factory Cost

800,000

Transportation cost

500,000

Office equipment and supplies

500,000

Machinery and equipment

2,500,000

Waste material (250 Ton) (Per Ton price 5000 taka)

1,250,000

Trade license

50,000

Salaries and wages expense

870,000

Marketing cost

380,000

Utility expense

250,000

Depreciation expense (Straight line)

500,000

Other cost

300,000

Total

8,570,000

Depreciation rate

10%

Tax rate

35%

Growth rate

10%

Interest rate

8%

Sale Forecasting Years and per Months Per Month: Item

Unit sale

Unit price

Total

Jute

(Tons) 500

7000

3500,000

Per year: Years Item

Jute

2021

2022

2023

2024

Selling

Selling

Selling

Selling

amount

amount

amount

amount

42,000,00

46200,00

50820,00

55902,00

0

0

0

0

2025 Selling amount

61492200

Cost of Sales Year

2021

2022

2023

2024

2025

Sales Revenue

42,000,000

46200,000

50820,000

55902,000

Salaries

870,000

935000

905,148

923,250.96

941,715.97

Expense Trade lisense

50,000

50,000

50,000

50,000

50,000

Rent

1,200,000

1,224,000

1,248,480

1,273,449.6

1,298,918.6

Marketing

300,000

270,000

230,000

180,000

140,000

--

--

250,000

250,000

250,000

250,000

250,000

Waste material

1,250,000

1,375,000

1,512,500

1,663,750

1,830,125

Machineries

2,550,000

--

--

500,000

300,000

250,000

200,000

150,000

300,000

306,000

312,120

318,362.4

324,729.64

500,000

500,000

61492200

Expense Transportation

Utilities

500,000

--

--

Expense

--

--

and equipments Office equipment and supplies Other cost

Depreciation

500,000

500,000

500,000

Expense Factory Cost

800,000

--

--

--

5,162,400

5,258,248

5,358,812.96

5,485,489.21

Total

8,570,000

--

Expenses Gross Profit

33430000

41037600

45561752

50543187.04

56006710.79

Cost of sales

8,070,000

4,662,400

4,758,248

4,858,812.96

4,985,489.21

Here, Revenue –Cost of sale – Depreciation expense = Gross profit So, Cost of sale (2021)

= Revenue – Depreciation – Gross Profit =42,000,000– 500,000– 33430,000 = 8070,000 BDT

We calculated the cost of sale for the following year in the same way. Expenses Year

2021

2022

2023

2024

2025

870,000

887,400

905,148

923,250.96

941,715.97

500,000

300,000

250,000

200,000

150,000

1,200,000

1,224,000

1,248,480

1,273,449.6

1,298,918.6

300,000

270,000

230,000

180,000

140,000

Waste material

1,250,000

1,375,000

1,512,500

1,663,750

1,830,125

Miscellaneous

300,000

306,000

312,120

318,362.4

324,729.64

2,550,000

--

--

--

--

250,000

250,000

250,000

250,000

Administrativ e Expenses Salaries and wages Expense Office equipment Rent Marketing Expense

Expenses Fixed Expenses Machineries Transportation

500,000

cost Utility expense

250,000

Depreciation

-500,000

-500,000

-500,000

-500,000

-500,000

50,000

50,000

50,000

50,000

50,000

800,000

--

--

--

--

7,570,000

4,162,400

4,258,248

4,358,812.9

4,485,489.2

6

1

Expense App and website development Factory setting Total

Pro-Forma Income Statement Year

2021

2022

2023

2024

2025

Sales Revenue

42,000,000

46200,000

50820,000

55902,000

Salaries

870,000

887,400

905,148

923,250.96

941,715.97

Expense Research

50,000

50,000

50,000

50,000

50,000

1,200,000

1,224,000

1,248,480

1,273,449.6

1,298,918.6

Marketing

300,000

270,000

230,000

180,000

140,000

Expense Utilities

250,000

250,000

250,000

250,000

250,000

Expense Waste material

1,250,000

1,375,000

1,512,500

1,663,750

1,830,125

Machineries

2,550,000

--

--

--

--

500,000

300,000

250,000

200,000

150,000

61492200

Expense

Location (lease)

Office equipment

Miscellaneous

300,000

Expenses Transportation

500,000

Depreciation Expense Factory setting Total

306,000

312,120

318,362.4

324,729.64

500,000

500,000

500,000

500,000

500,000

800,000

--

--

--

--

8,570,000

5,162,400

5,258,248

5,358,812.9

5,485,489.2

6

1

Expenses

EBIT

33430,000

41037600

45561752

Interest Expense Earning

50543187.04

285600

285600

285600

33144400

40752000

45276152

50257587.04

11,185,790

13,806,975

15,344,805.

17,038,123.21

18,895,153.301

7

4

5

285600

56006710.79 285600 55721110.79

Before Tax (EBT) Tax Expense (35%) Net Income

21958610

226945025

29931346.3

33219463.83

36825957.49

Net Income 250000000

226945025

200000000

150000000

100000000

50000000 21958610 0 2021

29931346.3

33219463.83

36825957.49

2023

2024

2025

2022

Here the net income of the company is increasing dramatically from year 2021 to year 2025, that indicates the company is generating higher profit which will increase the profitability ratio of the company. Pro-Forma Balance Sheet Year

2021

2022

2023

2024

2025

Office

500,000

300,000

250,000

200,000

150,000

Equipment Mini Van for

500,000

Assets Fixed Assets

Transportation Depreciation

500,000

500,000

500,000

500,000

500,000

Expense App & website

50,000

50,000

50,000

50,000

50,000

Machineries

2,550,000

2,550,000

2,550,000

2,550,000

2,550,000

Total Fixed

3,600,000

3,400,000

3,350,000

3,300,000

3,250,000

development

Assets

Current Assets Cash in hand

6358121.5

10376526.5

11,769,102

15,237,910

17,148,851.5

Cash in bank

3752438.25

-656345

6,172,312

7,790,589.5

9,286,005.25

Other Current

1028805.2

1554634.5

10,231,08

9,338,72.5

10,021,14.2

Assets

5

Total Current

20,398,610

25,266,525

28,172,496

32,367,228

36,455,998

Assets Total Asset

23,998,61

28,666,52

31,522,49

35,667,22

39,705,99

Liabilities Loan Payable

125000.00

125000.00

125000.00

125000.00

125000.00

Long term

500000.00

400000.00

600000.00

700000.00

1250000.00

625,000

525,000

725,000

825,000

1,375,000

2600000.00

2500000.0

2300000.0

3200000.0

3240000.00

Retained

20,773,61

0 25,641,52

0 28,497,49

0 31,642,22

35,090,99.10

earnings Total Liability +

23,998,61

28,666,52

31,522,49

35,667,22

39,705,99

5

L and OE

Liabilities Current

liability Total liability Owners’ Equity

Equity

Cash Flow Statement Year

2021

2022

2023

2024

2025

Capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Net profit

21958610

226945025

29931346.3 33219463.83

Cash inflow 36825957.49

Total cash

26958610

231945025

34931346.3 38219463.83

41825957.49

inflow Cash outflow Total Fixed

3,600,000

3,400,000

3,350,000

3,300,000

3,250,000

Assets Cost of sale

8,070,000

4,662,400

4,758,248

4,858,812.96

4,985,489.21

Salaries

870,000

887,400

905,148

923,250.96

941,715.97

Expense Location

1,200,000

1,224,000

1,248,480

1,273,449.6

1,298,918.6

(lease)

Mini Van for

500,000

Transportation Marketing

300,000

270,000

230,000

180,000

140,000

Expense Utilities

250,000

250,000

250,000

250,000

250,000

Expense Miscellaneous

300,000

306,000

312,120

318,362.4

324,729.64

14,590,000

10,999,800

11,053,996

11,103,875.92

11,190,853.42

12368610

220945225

23877350.3 27115587.91

Expenses Total cash outflow Net cash flow

30635104.07

Cash Flow 30000000 24223788.98

25000000 21545798.99 19082072.1

20000000 16851171 15000000 11183610 10000000 5000000 0 2021

2022

2023

2024

2025

Funding Source From personal financing, each partner invested = 1250000 TK. So total investment = 1250000 TK * 4 = 5000000 TK. Then we will take a loan of 3570000 taka from the creditors. So total investment for the new venture is 8,570,000 Tk. Breakeven Analysis It is critical to understand our break-even point in order to be profitable in business. The point at which total revenue equals total costs or expenses is known as the breakeven point. Breakeven point (Unit) = All expenses/Contribution margin All expenses = 8,570,000 Contribution margin = Revenue (per month) - Expense (per month) = 3500,000 - 714,166.66 =

2785833.34

Breakeven point = 8,570,000/2785833.34 = 3.1 tons

So, it depicts that the company needs to sell 3.1 Tons of cotton to cover the expenses and go further to meet the profit objectives. Performance indicators Performance indicators play an important role in assessing and monitoring progress in important areas of a company. The performance indicators are a collection of quantitative measures used by a business to assess its performance over time. Quantification of these indicators helps an organization to assess its effectiveness. It is also easier to understand if the corporation is meeting its operational and strategic objectives. Ratio analysis lets us quickly assess a company's financial situation and performance. Current ratio: It is the liquidity ratio that calculates the ability of the firm to repay short-term obligations or those due within one year. It's safer to have a higher current ratio. 2:1 is known to be the benchmark for the current ratio. It allows an investor to understand how a company can pay its short-term debt to its current assets. Year

Current assets

Current Debt

Current Ratio

2021

20,398,610

125000

163.18

2022

25,266,525

125000

202.13

2023

28,172,496

125000

225.37

2024

32,367,228

125000

258.93

2025

36,455,998

125000

291.64

Current Assets & Current Debt 40,000,000

36,455,998

35,000,000

32,367,228 28,172,496

30,000,000 25,266,525 25,000,000 20,398,610 20,000,000 15,000,000 10,000,000 5,000,000 125000 0 2021

125000

125000

125000

125000

2022

2023

2024

2025

Current assets

Current Debt

Current Ratio 350 291.64

300 258.93 250

225.37 202.13

200 163.18 150 100 50 0 2021

2022

2023

2024

2025

Interpretation: The graph portraits the current ratio for Recycle Bangladesh for the upcoming 5 years. From the graph we can see that current ratio for 2021 is almost 163 which means Recycle Bangladesh has 163 Taka of current asset for its each 1 taka of current liability. As we know way too higher current ratio indicates opportunity cost for holding excess current asset. Therefore, our current ratios are increasing dramatically over the period and we have an uplifting current ratio.

Debt ratio: The debt ratio calculates the amount of a company's financial leverage and indicates how much of the company's assets are financed by debt. Potential creditors and investors are interested in knowing this ratio as it indicates how much the borrowed fund a business uses in its operation. A lower debt ratio is better and attractive to investors and creditors. It is calculated by dividing total asset by total liabilities.

Year

Total Liabilities

Total assets

Debt ratio

2021

625,000

23,998,61

3.83

2022

525,000

28,666,52

5.46

2023

725,000

31,522,49

4.34

2024

825,000

35,667,22

4.32

2025

1,375,000

39,705,99

2.88

Debt ratio 6

5.46

5 4.34

4.32

3.83 4 2.88

3 2 1 0 2021

2022

2023

2024

2025

Interpretation: The graph portraits the debt ratio for the next 5 years of Recycle Bangladesh. In 2021 the debt ratio is 3.83 from the graph it is evident that the debt ratio is increasing till 2024 and in 2025 it is

2.88. Return on Asset (ROA): Return on asset or ROA is a measures effectiveness of management. It measures how effectively a company is managing its available assets efficiently and generating profits. The higher return on assets is better for a company. It shows how much revenue a firm can generate for 1 taka of asset venture. The formula of ROA: Net Profit ÷ Total Assets

Year

Net income

Total assets

(ROA)

2021

21958610

23,998,61

9.14

2022

26945025

28,666,52

9.39

2023

29931346.3

31,522,49

9.49

2024

33219463.83

35,667,22

9.31

2025

36825957.49

39,705,99

9.27

ROA 9.6 9.49

9.5 9.4

9.39 9.31 9.27

9.3 9.2 9.14 9.1 9 8.9 2021

2022

2023

2024

2025

Interpretation: From this graph above portraits Return on assets or ROA of Recycle Bangladesh for the upcoming 5 years. From the graph it is evident that ROA has increased from year

2021 to year 2023 as it has an upward trend. From 2023 to 2025 ROA has decreased. The higher return on assets is better for a company. In 2025 ROA is 9.27 which indica...