FINANCIAL PLAN

INTRODUCTION
Financial planning plays a very crucial role for the whole business plan. Entrepreneurs would be able to
forecast and plan their business thoroughly using it. Financial plan facilitates the company to visualize
the short and long term financial requirements in running a new business. It also how the requirements
are going to be financed by using internal and external resources. Financial plan also include projection
of the financial statement such as cash flow, profit and loss, balance sheet and some financial analysis in
order to determine the viability of the proposed business.
The information of financial plan is a gathered input from the administrative budget, marketing
and operation budget where in the financial, working paper, schedule and financial plan must have the
statements below:
a) Project implementation cost
b) Sources of financing
c) Pro-forma cash flow statement
d) Pro-forma income statement
e) Pro-forma balance sheet
f)

Financial analysis

The importance if Financial Plan

To determine the amount of money to be invested of project cost
To identify and propose the relevant sources of fund
To ensure that the initial capital is sufficient
To appraise the viability before investment is committed
As a guideline for implementation

PROJECTED ADMINISTRATIVE, MARKETING AND OPERATIONS EXPENDITURE

ADMINISTRATIVE EXPENDITURE
ADMINISTRATIVE EXPENDITURE
Fixed Assets

RM

Furniture & Fittings

2,495

Renovation

2,000

Deposit Warehouse

4,000

Deposit Vehicle

4,000

Working Capital
Vehicle Loan

1,000

Warehouse Rent

2,000

Utilities

800

Salaries, EPF & SOCSO

5,544

Office Supply

200

Pre-Operations
Business Registration & Licenses

895

Insurance & Road Tax for Motor Vehicle

800

Other Expenditure

300

TOTAL

24,034

MARKETING EXPENDITURE
MARKETING EXPENDITURE
Fixed Assets

Signboard

RM

3,000

Working Capital
Internet

60

Banner & Business Card

25

Bunting

TOTAL

3,090

OPERATIONS EXPENDITURE
OPERATIONS EXPENDITURE

Fixed Assets

RM

Machine & Equipment

Punch Card Machine

298

Meat Slicer

5,800

Freezer

5,500

Weight Machine

2,150

Bone Saw

2,900

Meat Mincer

3,130

Fixture and Fittings

Cold room
Operation overhead

10,000
930

Working Capital
Raw Materials
General Overhead
Operation Overhead
TOTAL

7,735
280
1,062
39,795

Projected Sales and Purchase

SALES PROJECTION (RM)
Month 1

2015

21,622

Month 2

2015

21,622

Month 3

2015

21,622

Month 4

2015

21,622

Month 5

2015

21,622

Month 6

2015

21,622

Month 7

2015

21,622

Month 8

2015

21,622

Month 9

2015

21,622

Month 10

2015

21,622

Month 11

2015

21,622

Month 12

2015

21,622

Total Year 2015

259,464

Total Year 2016

272,431

Total Year 2017

285,404

PURCHASE PROJECTION (RM)

Month 1

2015

7,735

Month 2

2015

7,735

Month 3

2015

7,735

Month 4

2015

7,735

Month 5

2015

7,735

Month 6

2015

7,735

Month 7

2015

7,735

Month 8

2015

7,735

Month 9

2015

7,735

Month 10

2015

7,735

Month 11

2015

7,735

Month 12

2015

7,735

Total Year 2015

92,820

Total Year 2016

97,461

Total Year 2017

102,102

Collection for Sales & Payment for Purchases

COLLECTIONS FOR SALES
In the month of sale
1 month after sale
2 months after sale
Total

PAYMENTS FOR PURCHASES

70%
20%
10%
100%

In the month of purchase

1 month after purchase
2 months after purchase
Total

100%
100%

Economic Life of Fixed Assets and Depreciation Method

FIXED ASSETS

Econ. Life (yrs)

Furniture & Fittings

Renovation

Signboard
Machine & Equipment

Punch Card Machine

Meat Slicer

Freezer

Weight Machine

Bone Saw

Meat Mincer

Fixture and Fittings

Operation overhead

INCREASE IN WORKING CAPITAL (%)

Year 2016
Year 2017

0%
0%

Increase in Working Capital (If Any)

Ending Stock for Raw Material and Finished Goods

ENDING STOCK OF RAW MATERIALS

End of Year 1

RM
-

ENDING STOCK OF FINISHED GOODS

End of Year 1

RM
13,620

End of Year 2
End of Year 3

End of Year 2
End of Year 3

13,923
14,586

Business Background
BUSINESS LEGAL ENTITY

Partnership

NATURE OF BUSINESS

Sources of Finance
TERMS OF LOAN (if required)
Interest rate
Loan duration

5%
5

TERMS OF HIRE-PURCHASE (if required)

Interest rate
5%
Hire-purchase duration
5

Trading/Distribution

PROJECT IMPLEMENTATION

Project Implementation Cost

Requirements

Sources of Finance

Cost

Loan

Fixed Assets

Hire-Purchase

Own Contribution

Cash

Land & Building

Furniture & Fittings

2,495

2,495

Renovation

2,000

2,000

Deposit Warehouse

4,000

4,000

Deposit Vehicle

4,000

4,000

Signboard

3,000

3,000

Machine & Equipment

19,788

19,788

Fixture and Fittings

10,000

10,000

930

930

9,544

9,544

Operation overhead
Working Capital
Administrative

months

Existing F. Assets

Marketing

90

90

Operations

9,077

9,077

Pre-Operations & Other Expenditure

1,995

1,995

Contingencies

6,692

6,692

73,611

65,521

10%

TOTAL

8,090

DEPRECIATION SCHEDULE
Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Year

Annual
Depreciation

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)

Furniture & Fittings

2,495
Straight Line
5
Accumulated
Depreciation

Book Value

2,495

499

499

1,996

499

998

499

4
5

Renovation
2,000
Straight Line
5

Annual
Depreciation

Year

Accumulated
Depreciation

Book Value

2,000

400

400

1,600

1,497

400

800

1,200

1,497

998

400

1,200

800

499

1,996

499

400

1,600

400

499

2,495

400

2,000

Fixed Asset

Operation overhead

Cost (RM)
Method
Economic Life (yrs)

930
Straight Line

Year

Annual

Accumulated

Depreciation

Depreciation

Book Value

930

186

186

744

186

372

558

186

558

372

4
5

186
186

744

186

930

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Year

Annual
Depreciation

Accumulated
Depreciation

Book Value

3,000

600

600

2,400

600

1,200

1,800

600

1,800

1,200

600

2,400

600

600

3,000

Fixed Asset
Cost (RM)
Method
Economic Life (yrs)
Year

Signboard
3,000
Straight Line
5

Fixed Asset
Fixture and Fittings
Cost (RM)
10,000
Method
Straight Line
Economic Life (yrs)
5

Machine & Equipment

19,788
Straight Line
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

Year

19,788

3,958

3,958

15,830

3,958

7,915

3,958

4
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

10,000

2,000

2,000

8,000

11,873

2,000

4,000

6,000

11,873

7,915

2,000

6,000

4,000

3,958

15,830

3,958

2,000

8,000

2,000

3,958

19,788

2,000

10,000

LOAN REPAYMENT SCHEDULE

LOAN REPAYMENT SCHEDULE
Amount

65,521

Interest Rate

5%

Duration (yrs)

5
Baki Tahunan

Method
Year

Principal

Interest

Total Payment

Principal Balance

65,521

13,104

3,276

16,380

52,417

13,104

2,621

15,725

39,312

13,104

1,966

15,070

26,208

13,104

1,310

14,415

13,104

13,104

655

13,759

PRO-FORMA INCOME STATEMENT

Year 1
259,464

Year 2
272,431

Year 3
285,404

Purchases

92,820

13,260
97,461

13,923
102,102

Less: Ending Stock

13,260

13,923

14,586

79,560

96,798

101,439

179,904

175,633

183,965

114,528

114,528

114,528

1,080

1,080

1,080

800

800

Sales
Less: Cost of Sales
Opening stock

Carriage Inward & Duty

Gross Profit
Less: Expenditure
Administrative Expenditure
Marketing Expenditure
Other Expenditure
Business Registration & Licenses

895

Insurance & Road Tax for Motor Vehicle

800

Other Pre-Operations Expenditure

300

Interest on Hire-Purchase
Interest on Loan

3,276

2,621

1,966

Depreciation of Fixed Assets

9,243

9,243

9,243

16,104

16,104

16,104

146,226

144,375

143,720

Net Profit Before Tax

33,678

31,258

40,245

Tax
Net Profit After Tax
Accumulated Net Profit

0
33,678
33,678

0
31,258
64,936

0
40,245
105,181

Operations Expenditure
Total Expenditure

PRO-FORMA BALANCE SHEET

Year 1

Year 2

Year 3

ASSETS
Non-Current Assets (Book
Value)
Land & Building
Furniture & Fittings
Renovation
Deposit Warehouse
Deposit Vehicle
Signboard

Machine & Equipment

Fixture and Fittings
Operation overhead

1,996
1,600
3,200
3,200
2,400

1,497
1,200
2,400
2,400

998
800
1,600
1,600

1,800

1,200

15,830
8,000
744

11,873
6,000
558

7,915
4,000
372

36,970

27,728

18,485

0
13,260
8,649
43,041

0
13,923
9,081
73,983

0
14,586
9,513
113,911

64,950

96,987

138,011

101,920

124,714

156,496

8,090
33,678
41,768

8,090
64,936
73,026

8,090
105,181
113,271

52,417

39,312

26,208

52,417

39,312

26,208

7,735

12,376

17,017

101,920

124,714

156,496

Other Assets
Deposit

Current Assets
Stock of Raw Materials
Stock of Finished Goods
Accounts Receivable
Cash Balance

TOTAL ASSETS
Owners' Equity
Capital
Accumulated Profit
Long-Term Liabilities
Loan Balance
Hire-Purchase Balance
Current Liabilities
Accounts Payable
TOTAL EQUITY & LIABILITIES

FINANCIAL ANALYSIS

FINANCIAL RATIO ANALYSIS

Year 1

Year 2

Year 3

LIQUIDITY
Current Ratio

Quick Ratio (Acid Test)

Gross Profit Margin

69.34%

64.47%

64.46%

Net Profit Margin

12.98%

11.47%

14.10%

Return on Assets

33.04%

25.06%

25.72%

Return on Equity

80.63%

42.80%

35.53%

Debt to Equity

144.01%

70.78%

38.16%

Debt to Assets

59.02%

41.45%

27.62%

11

19

EFFICIENCY
Inventory Turnover
PROFITABILITY

SOLVENCY

Time Interest Earned

GRAPH