BUSINESS PLAN_A GENERAL OVERVIEW

items needed to be depreciated are the cost, method used, economic life in years, annual
depreciation, accumulated depreciation, and book value
PRO FORMA FORECASTED CASH FLOW STATEMENT
Projected statement of a company cash inflow and outflow throughout the planned period
Predict the rate at which money will flow in and out in the business
Measure the business’s liability & its ability to pay its bills & other financial obligation
Begins with the existing cash balance for the business
‣ Cash inflow – owners capital in cash, loan, cash sales, collection of account
receivables, sales of assets & etc
‣ Cash outflow – administrative expenditure, account payable, inventory
‣ Cash deficit – difference between cash inflows and cash outflows
‣ Cash position – the beginning and ending cash balances for a particular period.
The final component in the pro forma cash flow statements is the cash position
PROFORMA FORECASTED INCOME STATEMENT
Shows the financial performance expected profit & loss of the business
Usually show in three consecutive years
Compare expenses against revenues for a certain period of time to indicate profit & losses
Prepare for the first, second, and third of the business for the manufacturing, trading, and
service-based business
PRO FORMA BALANCE SHEET
Prepare to show how the business asset is acquired and the sources used to finance
these assets
Is a financial statement that disclosed business assets, liabilities, & owner’s equity
Bank require the account prepares for the first, second, & third year of the business
The owner of the business should recognize which item to be categorized as fixed assets,
current assets, current liabilities, & long term liabilities
‣ Fixed asset – Equipment, machinery, furniture, fixtures & fittings, vehicles,
building, plants, & etc
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