Financial Plan New. sample

5/22/2018 Financial Plan New. sample

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CHAPTER VIII

FINANCIAL PLAN

This chapter discusses the financial aspect of Magis Events. Included in the

chapter are the assumptions, capital requirements, financial statements, and the

exit/payback period and strategy.

a. Assumptions

Varieties of assumptions were made to facilitate and make possible the projection

of the financial statements of Magis Events for its forthcoming actual operations. The

business is expected to begin its operations on the second semester of academic year

2014-2015, that which will start on November 2014 to March 2015.

Financial projections will be based on per semester basis of operations. It would

be limited to the following assumptions:

1. Sales Projection

Sales should increase at least 10% per semester of operations.

The business will allow credit with 25% advance payment for the

reservation.

2. Projection of Expense

The business assumes that expenses such as advertising, transportationand miscellaneous will increase by 5%.

All purchases would be cash or advance payment basis.

3. Assets

Since, there will be credit sales, there will be accounts receivable.

4. Capitalization

Since, this a service business, the company will be used the 25% advance

payment from client for the rolling capital.

5. Distribution of Income/Loss

Net income or loss will be distributed equally to the partners.

6. Accounting Method


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The accrual method will be used in the preparation of the financial

statements.

7. Operation

The business assumes that service that we have target 2 clients per

month and 10 clients in a semester. Business operation is 5 days in a

week, 20 days in a month, and 100 days in a semester.

b. Capital Requirements

Each members are equally contributed P 1, 075.00 or P4, 300.00 to sustain the

pre-operating expenses. The equal share of the members will be considered as their

investment. Since the members are contributed equally for the pre-operating, the

income will be divided equally among the partners.

Table 10

Magis Event

Projected cost for the the first

month

Pre-operating Expense

Preparation of Business Plan 1,500.00Business Registration

and Liscencing 500.00 2,000.00

Other Expenses

Office Supplies 200.00

Programming(logo) 500.00

Advertising 500.00

Transportation 600.00

Contingency 500.00 2,300.00

TOTAL 4,300.00


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The projected cost for the 1st month includes the pre-operating expense and

other expenses. The pre-operating expense includes the preparation of the business

plan, which consists of printing of the paper, transportation expenses for the

canvassing, snacks during defenses, etc., and the business registration and licensing.

The office supplies are amounted to P200.00 per month. Other expenses include the

office supplies, programming expense, advertising expense, transportation expense and

the contingency expense which will be reserve for petty and immediate expenses.

Funding the Capital

The business will be used the 25% partial payment from the client for the rolling

capital.

c. Projected Financial Statements

Income Statement

This section is a statement showing the performance of the business for a given

period of time. It summarizes the revenue earned and the expenses incurred by the

business for that period of time.

Magis Events income statement for the first three semesters of its operations is

projected to have an increase of 10% for sales, and 5% for the expenses.


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Table 11

Magis Event

Projected Income Statement per

Operation

Wedding Service

Decoration 45,000.00

Expenses

flower 20,000.00

labor 5,000.00

transportation 3,000.00

others 2,000.00 30,000.00

Profit 15,000.00

Photography 35,000.00Professsional Fee

2 photographers (1,500) 3,000.00

2 videographers (1,500) 3,000.00


output 8,000.00 16,500.00

Profit 18,500.00

Reception and Food 75,000.00

Rent for the reception 12,000.00

Catering service 50,000.00transportation 3,000.00 65,000.00

Profit 10,000.00

Net proft 28,000.00


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Debut PartyDecorations 20,000.00Expenses

flowers 5,000.00


labor 3,000.00

others 3,000.00 12,000.00

profit 8,000.00

Photography 27,000.00

Expenses

Professional fee

2 photography (1,500) 3,000.00

1 videography 1,500.00


output 6,000.00 13,000.00

Profit 14,000.00

Catering 45,000.00

Expenses

Catering Services 35,000.00 35,000.00

Profit 10,000.00

SeminarsCost of Service 30,000.00

Expenses

Professional Fee

Speaker 3,500.00

sound system 2,500.00

Decorations 2,500.00

Food 6,000.00

Rent for the Venue 5,000.00

others 2,500.00 22,000.00Profit 8,000.00

This table includes the income statement per event the wedding, debut and

corporae evens.


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Table 14

Magis Events

Projected income for the threesemester

2nd semester 1st semester 2nd semester

service revenue 80,000.00 88,000.00 96,800.00

Expenses

Advertising 525.00 551.25 578.81

office supplies 1,000.00 1,050.00 1,102.50

rent 1,300.00 1,300.00 1,300.00

transportation 2,000.00 2,100.00 2,205.00

miscellaneous 300.00 315.00 330.75others 2,000.00 2,100.00 2,205.00

total expenses 7,125.00 7,416.25 7,722.06

Net income 72,875.00 80,584.00 89,077.94

The table shows the projected income statement of Magis events for the next

three semesters of operations. It shows from the projections that at the on set of the

operations on the 2ndsemester, the business would incur a profit of P72, 875.00,

P 80,58.00, for the 1stsemester of S/Y 2015-2016, and P89,077.94 for the 2ndsemester

of the school year.

Sales projections are computed in which 2 customers in a month; The business

assumed of 10 costumers per semester. Our sales and service fee are expected to

increase by 10% by semester.

We assume that seminars services cost P 30,000, P22,000 is the expenses like

food, decorations, professional fee for the speakers and etc.Expenses include the salaries, IGP Cafeteria rent, advertising expense,

transportation expense, and miscellaneous expense. Expenses are expected to

increase by 5% per semester.

IGP Cafeteria rent amounts to P1, 300.00 per semester.


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Cash Flow

This section provides information about the cash receipts and disbursement of

Magis Event. Also, this statement shows the net increase or decrease in cash during

the period and the cash balance at the end of the period.

Table 15

Magis Events

Projected Cash Flow for threesemesters

Pre-operating 2nd semester 1stsemester 2ndsemester

Cash Inflows

Service revenues 80,000.00 88,000.00 96,800.00

Partners' contribution 4,300.00

Total cash inflows 80,000.00 88,000.00 96,800.00

Cash outflows

Expensespreparation of businessplan 1,500.00

business registration 500.00Advertising 500.00 525.00 551.25 578.81

office supplies 200.00 1,000.00 1,050.00 1,102.50

rent 1,300.00 1,300.00 1,300.00

transportation 600.00 2,000.00 2,100.00 2,205.00

programming/logo 500.00

miscellaneous 300.00 315.00 330.75

contingency 500.00

others 2,000.00 2,100.00 2,205.00Total operatingexpense 4,300.00 7,125.00 7,416.25 7,722.06

Total Cash outflows 7,125.00 7,416.25 7,722.06

Net increase in cash 0.00 72,875.00 80,583.00 89,077.00Add: Beg. CashBalance 0.00 0.00 72,875.00 153,458.00

Ending Cash Balance 0.00 72,875.00 153,458.00 246,835.00


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The table shows the cash receipts and disbursement for the three semesters of

operation of Magis event. It shows that for the 2ndsemester of the S/Y 2014-2015, the

ending cash balance would be P72, 875.00. For the 1stand 2ndsemester of S/Y 2014-

2015, the ending cash balance is P153, 458.00 and P246, 835.00 respectively.

Included in the cash inflow for the pre-operating is the partners contribution

which amounted to P4, 300.00. For the actual business operation, cash inflows are the

cash fees from the service.

The cash outflows for the pre- operating is the business plan preparation, and

business registration. Cash outflows during the actual business operation include the

operating expenses incurred in a semester.

Balance Sheet

This section is the statement of the financial position or condition of a business

by listing the assets, liabilities and equity as at a specific date.

Table 16

Prjected Balance Sheet

Magis Events or ThreeSemesters

Pre-Operating 2nd Semester 1st semester 2nd semester

Assets

Cash 4,300.00 72,875.00 153,458.00 246,835.00

Total Assets

Labilities

Partner's Equity

Managuelod 1,075.00 18,218.75 38,364.50 61,708.75

Mercado 1,075.00 18,218.75 38,364.50 61,708.75Ibarlin 1,075.00 18,218.75 38,364.50 61,708.75

Balondo 1,075.00 18,218.75 38,364.50 61,708.75

Total Liabilities and

Partner's Equity 4,300.00 72,875.00 153,458.00 246,835.00


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The table shows the assets, liabilities, and equity of Magis Events. The figures

reflect that of the financial position of the business.

Assets include the cash balance for a certain period. Total assets for the pre-

operating period are P4, 300.00, liabilities and partners equity also amounted to

P 4,300.00

For the second semester of S/Y 2014-2015, the total assets amounted to P

72,875.00, same with that of the liabilities and partners equity. Each members equity

amounted to P 18,218.00.

The total assets for the first semester of S/Y 2015-2016 amounted to P153, 458.00,

same with that of the liabilities and partners equity. Each members equity amounted to

P38, 364.50.

For the second semester of S/Y 2015-2016, the total assets amounted to P 246,

835.52, same with that of the liabilities and partners equity. Each members equity

amounted to P 61,708.75.

d. Exit/Payback Period/Strategy

Payback Period

The Payback Period refers to the amount of time required for the business to

recover its initial investment.


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This computation shown above reflects the business total investment and the

total cash inflows for the first three semesters of operations. Based from the trend of

cash inflow, the business expects that the total investment will be returned at

approximately 5 months.

Return on Investment (ROI)

The ROI is a measure of the business overall effectiveness and performance of

management in generating profits with its asset. It is the ratio of the companys

investments relative to its net income and is expressed in terms of percentage.

A. 2

nd

Sem

1694.76 %

The computation shows that the company will have 1694.76% Return on

Investment in the 2nd

Semester of S/Y 2014-2015.

B. 1stsem


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1874.05%


Investment in the 1stSemester of S/Y of 2015-2016.

C. 2ndSem

2071.56 %

The computation shows tht the company will have 2071.56% Return on

Investments in the S/Y of 2015-2016.

Profit Margin

The profit margin indicates the firms ability to generate profit. The

computation below will show the companys ability to generate profit in the 2ndsemester

of S/Y 2014-2015, 1stsem of S/Y 2015-2016 and 2

ndsem of S/Y 2015-2016.

2nd

Semester


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The computation shows that the company will have 1694.76% roit marginin the

2nd


1stSemester


Investment in the 1st Semester of S/Y 2015-2016.


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2ndSemester


Investment in the 2nd


Table 17

Magis Event

ProfitabilityRatios

Semester Sales Net Income Investment Return on Profit margin

Investment

2nd Semester P 80,0.0000 P 72,875.00 P 4,300.00 1694.76% 91.09%1st Semester P 88,000.00 P 80,584.00 P 4,300.00 1874.05% 91.50%

2nd Semester P 96,800.00 P 89,077.94 P 4,300.00 2071.56% 92.02%


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The Return on Investments (ROI) of the business is 1694.76% as the business

starts its operations. As the business reach its 2ndoperation, its return on investments

becomes 1874.05%. At end of the 3rdoperation 2071.56% its return on investments.

The profit margin Magis Events 2ndsemester of S/Y 2014-2015 is 91.09%,

91.50% for the 1stsemester and 92.02% for the 2ndsemester of S/Y 2015-2016. These

figures show the ability of the business to generate profit.


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Chapter IX

CONCLUSION

The materialization and manifestation of the business is the end goal of this

business plan. All the writings will not be a success without the execution. From the

business mission and goals down to the financial aspect of the business must be

surpass and illustrate in the actual business operation.

Based from the goals and objectives mentioned, the management seek to attain

all of those that was mentioned. The business plan will be a means of the group as

preparation in their future endeavor. The difficulties that they will be facing as they go

through the operation will serve as their stepping-stones and experience in the near

future.

Magis Events is highly feasible basing from the ample study, results and figures

they have come up and projected in the business proposal. The business will be able to

surpass all challenges even though given the fact that the business is newly established

and a new player in its field.

Documents

Financial Plan New. sample