A business plan contains much of the prose, but lenders know that the figures in the plan can make or break. These figures are presented in three basic financial statements. For implementation of these documents are "pro forma" which means they are projections of the future because there is no financial history of the company. If the company is already operating, financial statements may include past, the actual number of current and projected goals.
The three main financial statements of a business plan is the income statement, balance sheet and cash flow of cash.
Income Statement
This statement (also called the income statement) shows the turnover, costs of doing business, and other expenses, taxes and benefits (or net revenues) for periods of time given. In the recent past periods and 1 to three years, the income statement generally shows the quarterly numbers to give more details. Annual data are sample for up to five years in the future. The income statement shows profitability, and ratios, profit margin (net income divided by revenue) one can easily deduce from this statement.
Donor funds are directed to this statement see indicators such as growth in the absolute level of sales, the absolute level of net income and earnings (representing the company more efficient conversion of sales to profits).
Sheet Balance
The balance Unlike the other two statements, shows pictures of the company's financial situation at some point in time. At the end of the year, for example, the log shows the value of the assets, liabilities and net worth (sometimes called a shareholder or shareholder wealth), drilling deep in each of these categories as needed. The word "balance" refers to the fact that the value of assets is always equal to the total value liabilities and equity, creating a balance in the equation (A = L + SE).
Lenders use the balance in relation to the declaration of income to calculate the ratios, as return on assets, return on equity and return on invested capital. These figures show how the assets and the investment in the company are used to generate profits.
Cash Flow
Cash flow table, also called the state cash flow shows the inputs and outputs of company funds for a period of time, as the tax return. Unlike income tax, All figures are in terms of money and are generally divided into three sections, operation, financing and investment, covering certain transactions not recognized in the income statement. Corresponding cash flow to cash provided by operating sales and money for operating expenses and inventory. Cash Flow Liquidity The Funding is provided by lenders and investors and attention to donors when they repaid the principal or dividends are paid, for example. Cash flows Invest show that investment in additional assets to the workplace, including the purchase of equipment and leasehold improvements on leased property.
John Gregory On VM Direct and Helloworld’s Business Plan
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