Financial Plan Essay Example | Topics and Well Written Essays - 1500 words

Financial Plan - Essay Example T $1,500 $125 $1,500 $125 Electricity $360 $30 $360 $30 Insurance $500 $42 $500 $42 Administrative Cost $900 $75 $900 $75 Depreciation $15,000 $1,250 $12,000 $1,000 Promotional and Marketing Cost $103,000 $8,583 $67,000 $5,583 TOTAL $206,260 $17,188 $293,260 $24,438 Based on above sales projection and cost estimation, total initial start up cost for the first operating year has been estimated at $627510 and this break ups for this initial cost is given below. Initial Start up Cost for first year of Operation TOTAL Capital Expenditure $328,250 Cost Of Goods Sold for the first Year $20,800 Fixed Overheads Expenses for First Year $206,260 Liquid Cash $72,200 Start Up Cost Total for the first years $627,510 Therefore, based on the above required initial cost for the business, the necessary capital will be obtained from the shareholders’ contributions and from the long and short term loans. The following table presents source and cost of different capitals. Source of Capital Invest ment Required For first years $627,510 Capital from Shareholders $313,755 Short Term Loan @ 8% $62,751 Capital From Long term Loan @ 10% $251,004 Income Statement After determining the estimated cost for the different activities like operations, manufacturing, development etc, the projected income statement can be prepared considering estimated sales. Monthly sales forecast has been estimated for the first two years, and the projected income statements have developed on monthly basis for the first years. The following table shows income statement for the first year. Income Statement for First Year    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yearly Sales Units 40 45 50 53 60 70 75 77 80 90 92 100 832 Revenue $2,000 $2,250 $2,500 $2,650 3,000 $3,500 $3,750 $3,850 $4,000 $4,500 $4,600 $5,000... For preparing three major financial statements i.e. Income statement, cash flow and balance sheet necessary areas like sales projection, estimated cost, required capital and other investments needed to be determined properly. The following table depicts estimated cost for capital investment required for manufacturing unit and office equipments. Major capital investment includes software development cost for tablet PC and other machineries like computer and tools. For the offices, necessary furniture will also be required that will incur certain amount of cost. Besides, there will be certain fixed overhead that will be incurred in every month. The costs of necessary fixed overheads are given in the table for first two years. Therefore, based on the above required initial cost for the business, the necessary capital will be obtained from the shareholders’ contributions and from the long and short term loans. The following table presents source and cost of different capitals. Aft er determining the estimated cost for the different activities like operations, manufacturing, development etc, the projected income statement can be prepared considering estimated sales. Monthly sales forecast has been estimated for the first two years, and the projected income statements have developed on monthly basis for the first years. The following table shows income statement for the first year. In the first, year of operation, the sales will be expected to very low, and on the other hand, the fixed expenses will higher due to high promotional and marketing, and depreciations.

MGT answer the question in the attachment Essay Example | Topics and Well Written Essays - 500 words

MGT answer the question in the attachment - Essay Example ses of the company include massive debt and overheads from now defunct brands whose discontinuation will be reflected positively through lower expenses on their income statement and other financial statements in the next financial cycle. The Liz Claiborne Company’s plan of action has been to trim down on organizational size with respect to work force and brands. The three brands which were retained were all priced as high end, affordable apparel which is currently safe from the disinterest of the consumers. It’s actually the middle tier apparel industry which was taken aback with penny wise consumers and so Liz Claiborne decided to sell those unprofitable brands to companies like J.C. Penney Co. and Bluestar Alliance. Yes, the action being taken by Liz Claiborne is most definitely strategic. They’ve given a lifeline to the company by trimming its burden of many loss-enduring brands and thus shaking off massive amounts of debt. These moves have also touched investors the right way. Share price of Liz Claiborne rose by 32 cents, equivalent to 3.8%, to $8.59 after the sale of Liz Claiborne and Monet Brands to J.C. Penney Co. was completed on the 2nd of November, 2011. Also, the company has announced that it will be renamed following the sale of the Liz Claiborne brand itself. This move is aimed to give fresh wind to the company, both in lieu of investor and consumer relations