Sources and Uses of Funds
Personal contributions
Loans from financial institutions
The initial capital outlay will be used in purchasing assets and financing expenses.
Financial Plans Assumptions
Employees’ salary payment and benefits are based on either hourly or part-time.
Other expenses such as medical insurance will be spent per year on benefits for each salaried employee.
Bank opening balance is the opening cash of the cash flows.
Income will be taxed at 25% per year.
Importance of Financial Plans
Income: Helps in understanding periodical expenditures and savings.
Cash Flow: Provide means of manipulating cash by changing the spending patterns.
Balance Sheet: Helps in determining the level of assets and liabilities.
Financial understanding through measured financial goals.
Components of Financial Plans
Cash flow management
Investment management
Tax planning
Business succession planning
Reference
Alviniussen, A., & Jankensgard, H. (2015). Enterprise risk budgeting: bringing risk management into the financial planning process.
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