FINANCIAL PLANNING

© Ismail Ab.Wahab, MEDEC, UiT M, 2006

NAME OF BUSINESS/COMPANY PAPERWORK 24/7

1. Projected administrative, marketing and operations expenditure :

MARKETING EXPENDITURE ADMINISTRATIVE EXPENDITURE OPERATIONS EXPENDITURE

Fixed Assets RM
Fixed Assets RM Fixed Assets RM
Land & Building -
Signboard 500 Office Funiture and fittings 7,040 Equipment and Machineries 6,470
Office Equipment 7,004
Premises Renovation 3,000
Vehicle 15,000
Working Capital Working Capital Working Capital
Raw Materials 23,784
Remuneration 1,017 Utilities 500 Carriage Inward & Duty 1,000
Working Capital 40 Premises Rental 1,500 Salaries, EPF & SOCSO 5,330
Office supplies 1,100 Overheads 1,550
Insurance of Business 450 Equipment and Machineries 540

Other Expenditure Other Expenditure Other Expenditure

Other Expenditure 2312 Other Expenditure 1000 Other Expenditure
Pre-Operations Pre-Operations Pre-Operations
Deposit (rent, utilities, etc.) Deposit (rent, utilities, etc.) 1,000 Deposit (rent, utilities, etc.)
Business Registration & Licences Business Registration & Licences 71 Business Registration & Licences
Insurance & Road Tax for Motor Vehicle 350 Insurance & Road Tax for Motor Vehicle 150 Insurance & Road Tax for Motor Vehicle
Other Expenditure Other Expenditure Other Expenditure
TOTAL 4,219 TOTAL 37,815 TOTAL 38,674

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2. Projected sales and purchases: SALES PROJECTION PURCHASE PROJECTION
Year 1 Month 1 45,150 Month 1 23,784
Month 2 38,250 Month 2 19,559
Month 3 41,700 Month 3 21,965
Month 4 42,650 Month 4 21,825
Month 5 40,450 Month 5 21,313
Month 6 42,650 Month 6 21,825
Month 7 40,450 Month 7 21,313
Month 8 39,200 Month 8 20,059
Month 9 40,450 Month 9 21,313
Month 10 43,900 Month 10 22,458
Month 11 43,900 Month 11 23,132
Month 12 41,250 Month 12 21,100
Total Year 1 500,000 Total Year 1 259,646
Year 2 ToTal Year 2 525,000 ToTal Year 2 272,628
Year 3 Total Year 3 561,750 Total Year 3 277,821
\
3. Collection for sales & payment for purchases: COLLECTIONS FOR SALES PAYMENTS FOR PURCHASES
In the month of sale 100% In the month of purchase 80%
1 month after sale 1 month after purchase 20%
2 months after sale 2 months after purchase
Total 100% Total 100%

4. Economic life of fixed assets & FIXED ASSETS Econ. Life (yrs) FIXED ASSETS Econ. Life (yrs)
depreciation method: Office Funiture and fittings 5 5
Office Equipment 5 5
Premises Renovation 5 Equipment and Machineries 5
Vehicle 5 5
Signboard 5 5
- 5 5

DEPRECIATION METHOD (1=straight line, 2=declining b alance) 1

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5. Increase in working capital (if any): INCREASE IN WORKING CAPITAL (%)
Year 2
Year 3

6. Ending stock for raw materials ENDING STOCK OF RAW MATERIALS RM ENDING STOCK OF FINISHED GOODS RM
and finished goods: End of Year 1 3,532 End of Year 1 3,800
End of Year 2 2,649 End of Year 2 2,850
End of Year 3 1,766 End of Year 3 1,900

7. Rate of taxation (for private limited company): TAX RATE

Year 1
Year 2
Year 3

8. Business background: BUSINESS LEGAL ENTITY 2 NATURE OF BUSINESS 3

1 = Private Limited Cpmpany (Sdn. Bhd.) 1 = Manufacturing
2 = Partnership 2 = Trading
3 = Sole Proprietorship 3 = Service

9. Sources of finance: TERMS OF LOAN (if required)

Interest rate 5%
Loan duration 5
Interest payment method* 2
* Method: 1 = flat rate 2 = annual rest kadar tetap

TERMS OF HIRE-PURCHASE (if required)

Interest rate 5%
Hire-purchase duration 5

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 PAPERWORK 24/7
PROJECT IMPLEMENTATION COST & SOURCES OF FINANCE
Project Implementation Cost Sources of Finance
Requirements Cost Loan Hire-Purchase Own Contribution
Fixed Assets Cash Existing F. Assets
Land & Building
Office Funiture and fittings 7,040 7,040
Office Equipment 7,004 7,004
Premises Renovation 3,000 3,000
Vehicle 15,000 15,000
Signboard 500 500

Equipment and Machineries 6,470 6,470

Working Capital 2 months

Administrative 7,100 7,100
Marketing 2,114 2,114
Operations 64,408 64,408
Pre-Operations & Other Expenditure 4,883 4,883
Contingencies 10% 11,752 0 11,752

TOTAL 129,271 0 129,271

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 ADMINISTRATIVE BUDGET
Particulars F.Assets Monthly Exp. Others Total
Fixed Assets
Land & Building - -
Office Funiture and fittings 7,040 7,040
Office Equipment 7,004 7,004
Premises Renovation 3,000 3,000
Vehicle 15,000 15,000
Working Capital
- -
Utilities 500 500
Premises Rental 1,500 1,500
Office supplies 1,100 1,100
Insurance of Business 450 450
- -
- -
Pre-Operations & Other Expenditure
Other Expenditure 1,000
Deposit (rent, utilities, etc.) 1,000 1,000
Business Registration & Licences 71 71
Insurance & Road Tax for Motor Vehicle 150 150
Other Pre-Operations Expenditure - -
Total 32,044 3,550 2,221 36,815

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 MARKETING BUDGET
Particulars F.Assets Monthly Exp. Others Total

Fixed Assets
Signboard 500 500
- -
- -
- -
Working Capital
- -
Remuneration 1,017 1,017
Working Capital 40 40
- -
- -
- -
- -
Pre-Operations & Other Expenditure
Other Expenditure 2,312
Deposit (rent, utilities, etc.) - -
Business Registration & Licences - -
Insurance & Road Tax for Motor Vehicle 350 350
Other Pre-Operations Expenditure - -
Total 500 1,057 2,662 1,907

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 OPERATIONS BUDGET
Particulars F.Assets Monthly Exp. Others Total

Fixed Assets
Equipment and Machineries 6470 6,470
-
-
-
Working Capital
Raw Materials 23,784 23,784
Carriage Inward & Duty 1,000 1,000
Salaries, EPF & SOCSO 5,330 5,330
Overheads 1,550 1,550
Equipment and Machineries 540 540
- -
- -
Pre-Operations & Other Expenditure
Other Expenditure -
Deposit (rent, utilities, etc.) - -
Business Registration & Licences - -
Insurance & Road Tax for Motor Vehicle - -
Other Pre-Operations Expenditure - -
Total 6,470 32,204 - 38,674

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 PAPERWORK 24/7
DEPRECIATION SCHEDULES

Fixed Asset Office Funiture and fittings Fixed Asset Office Equipment
Cost (RM) 7,040 Cost (RM) 7,004
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - 7,040 - - 7,004
1 1,408 1,408 5,632 1 1,401 1,401 5,603
2 1,408 2,816 4,224 2 1,401 2,802 4,202
3 1,408 4,224 2,816 3 1,401 4,202 2,802
4 1,408 5,632 1,408 4 1,401 5,603 1,401
5 1,408 7,040 - 5 1,401 7,004 -
6 0 0 - 6 0 0 -
7 0 0 - 7 0 0 -
8 0 0 - 8 0 0 -
9 0 0 - 9 0 0 -
10 0 0 - 10 0 0 -

Fixed Asset Premises Renovation Fixed Asset Vehicle

Cost (RM) 3,000 Cost (RM) 15,000
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - 3,000 - - 15,000
1 600 600 2,400 1 3,000 3,000 12,000
2 600 1,200 1,800 2 3,000 6,000 9,000
3 600 1,800 1,200 3 3,000 9,000 6,000
4 600 2,400 600 4 3,000 12,000 3,000
5 600 3,000 - 5 3,000 15,000 -
6 0 0 - 6 0 0 -
7 0 0 - 7 0 0 -
8 0 0 - 8 0 0 -
9 0 0 - 9 0 0 -
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10 0 0 - 10 0 0 -
Fixed Asset Signboard Fixed Asset
Cost (RM) 500 Cost (RM)
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - 500 - - -
1 100 100 400 1 - - -
2 100 200 300 2 - - -
3 100 300 200 3 - - -
4 100 400 100 4 - - -
5 100 500 - 5 - - -
6 0 0 - 6 - - -
7 0 0 - 7 - - -
8 0 0 - 8 - - -
9 0 0 - 9 - - -
10 0 0 - 10 - - -

Fixed Asset Fixed Asset

Cost (RM) Cost (RM)
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - - - - -
1 - - - 1 - - -
2 - - - 2 - - -
3 - - - 3 - - -
4 - - - 4 - - -
5 - - - 5 - - -
6 - - - 6 - - -
7 - - - 7 - - -
8 - - - 8 - - -
9 - - - 9 - - -
10 - - - 10 - - -

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Fixed Asset Equipment and Machineries Fixed Asset
Cost (RM) 6,470 Cost (RM)
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - 6,470 - - -
1 1,294 1,294 5,176 1 - - -
2 1,294 2,588 3,882 2 - - -
3 1,294 3,882 2,588 3 - - -
4 1,294 5,176 1,294 4 - - -
5 1,294 6,470 - 5 - - -
6 0 0 - 6 - - -
7 0 0 - 7 - - -
8 0 0 - 8 - - -
9 0 0 - 9 - - -
10 0 0 - 10 - - -

Fixed Asset Fixed Asset

Cost (RM) Cost (RM)
Method Straight Line Method Straight Line
Economic Life (yrs) 5 Economic Life (yrs) 5
Annual Accumulated Annual Accumulated
Year Depreciation Depreciation Book Value Year Depreciation Depreciation Book Value
- - - - - -
1 - - - 1 - - -
2 - - - 2 - - -
3 - - - 3 - - -
4 - - - 4 - - -
5 - - - 5 - - -
6 - - - 6 - - -
7 - - - 7 - - -
8 - - - 8 - - -
9 - - - 9 - - -
10 - - - 10 - - -

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 PAPERWORK 24/7
PRO FORMA CASH FLOW STATEMENT
MONTH Pre-Operations 1 2 3 4 5 6 7 8 9 10 11 12 TOTAL YR 1 YEAR 2 YEAR 3

CASH INFLOW
Capital (Cash) 129,271 129,271
Loan 0 0
Cash Sales 45,150 38,250 41,700 42,650 40,450 42,650 40,450 39,200 40,450 43,900 43,900 41,250 500,000 525,000 561,750
Collection of Accounts Receivable
TOTAL CASH INFLOW 129,271 45,150 38,250 41,700 42,650 40,450 42,650 40,450 39,200 40,450 43,900 43,900 41,250 629,271 525,000 561,750

CASH OUTFLOW
Administrative Expenditure

Utilities 500 500 500 500 500 500 500 500 500 500 500 500 6,000 6,000 6,000
Premises Rental 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 18,000 18,000
Office supplies 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 13,200 13,200 13,200
Insurance of Business 450 450 450 450 450 450 450 450 450 450 450 450 5,400 5,400 5,400

Marketing Expenditure

Remuneration 1,017 1,017 1,017 1,017 1,017 1,017 1,017 1,017 1,017 1,017 1,017 1,017 12,204 12,204 12,204
Working Capital 40 40 40 40 40 40 40 40 40 40 40 40 480 480 480

Operations Expenditure
Cash Purchase 19,027 15,647 17,572 17,460 17,050 17,460 17,050 16,047 17,050 17,966 18,506 16,880 207,717 218,102 222,257
Payment of Account Payable 4,757 3,912 4,393 4,365 4,263 4,365 4,263 4,012 4,263 4,492 4,626 47,709 51,929 54,526
Carriage Inw ard & Duty 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 12,000 12,000
Salaries, EPF & SOCSO 5,330 5,330 5,330 5,330 5,330 5,330 5,330 5,330 5,330 5,330 5,330 5,330 63,960 63,960 63,960
Overheads 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 18,600 18,600 18,600
Equipment and Machineries 540 540 540 540 540 540 540 540 540 540 540 540 6,480 6,480 6,480

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Other Expenditure 3,312 3,312 3,312 3,312
Pre-Operations
Deposit (rent, utilities, etc.) 1,000 1,000
Business Registration & Licences 71 71
Insurance & Road Tax for Motor Vehicle 500 500 500 500
Other Pre-Operations Expenditure
Fixed Assets
Purchase of Fixed Assets - Land & Building
Purchase of Fixed Assets - Others 39,014 39,014
Hire-Purchase Dow n Payment
Hire-Purchase Repayment:
Principal
Interest
Loan Repayment:
Principal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Tax Payable 0 0 0 0
TOTAL CASH OUTFLOW 40,585 35,366 33,431 34,511 34,880 34,442 34,750 34,442 33,337 34,089 35,256 36,024 34,533 455,647 430,168 436,918
CASH SURPLUS (DEFICIT) 88,686 9,784 4,819 7,189 7,770 6,008 7,900 6,008 5,863 6,361 8,644 7,876 6,717 173,624 94,832 124,832
BEGINNING CASH BALANCE 88,686 98,470 103,289 110,478 118,248 124,255 132,156 138,163 144,027 150,387 159,031 166,907 173,624 268,456
ENDING CASH BALANCE 88,686 98,470 103,289 110,478 118,248 124,255 132,156 138,163 144,027 150,387 159,031 166,907 173,624 173,624 268,456 393,288

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 PAPERWORK 24/7
PRO-FORMA INCOME STATEMENT

Year 1 Year 2 Year 3

Sales 500,000 525,000 561,750
Less: Cost of Sales
Opening stock
Purchases 259,646 272,628 277,821
Less: Ending Stock
Carriage Inward & Duty 12,000 12,000 12,000

Gross Profit

Less: Enpenditure
Administrative Expenditure 42,600 42,600 42,600
Marketing Expenditure 12,684 12,684 12,684
Other Expenditure 3,312 3,312 3,312
Business Registration & Licences 71
Insurance & Road Tax for Motor Vehicle 500 500 500
Other Pre-Operations Expenditure
Interest on Hire-Purchase
Interest on Loan 0 0 0
Depreciation of Fixed Assets 7,803 7,803 7,803
Operations Expenditure 89,040 89,040 89,040
Total Expenditure 427,656 440,567 445,760
Net Profit Before Tax 72,344 84,433 115,990
Tax 0 0 0
Net Profit After Tax 72,344 84,433 115,990
Accumulated Net Profit 72,344 156,777 272,768

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 PAPERWORK 24/7
PRO-FORMA BALANCE SHEET
Year 1 Year 2 Year 3
ASSETS
Non-Current Assets (Book Value)
Land & Building
Office Funiture and fittings 5,632 4,224 2,816
Office Equipment 5,603 4,202 2,802
Premises Renovation 2,400 1,800 1,200
Vehicle 12,000 9,000 6,000
Signboard 400 300 200

Equipment and Machineries 5,176 3,882 2,588

Other Assets
Deposit 1,000 1,000 1,000

32,211 24,408 16,606

Current Assets
Stock of Raw Materials 0 0 0
Stock of Finished Goods 0 0 0
Accounts Receivable
Cash Balance 173,624 268,456 393,288
173,624 268,456 393,288

TOTAL ASSETS 205,835 292,865 409,893

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Owners' Equity
Capital 129,271 129,271 129,271
Accumulated Profit 72,344 156,777 272,768
201,615 286,048 402,038
Long-Term Liabilities
Loan Balance 0 0 0
Hire-Purchase Balance
0 0 0
Current Liabilities
Accounts Payable 4,220 6,816 7,855

TOTAL EQUITY & LIABILITIES 205,835 292,865 409,893

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 PAPERWORK 24/7
FINANCIAL RATIO ANALYSIS
Year 1 Year 2 Year 3

LIQUIDITY
Current Ratio 41 39 50
Quick Ratio (Acid Test) 41 39 50

EFFICIENCY
Inventory Turnover #VALUE! #VALUE! #VALUE!

PROFITABILITY
Gross Profit Margin #VALUE! #VALUE! #VALUE!
Net Profit Margin 14.47% 16.08% 20.65%
Return on Assets 35.15% 28.83% 28.30%
Return on Equity 35.88% 29.52% 28.85%

SOLVENCY
Debt to Equity 2.09% 2.38% 1.95%
Debt to Assets 2.05% 2.33% 1.92%
Time Interest Earned 7,234,418 10,554,148 19,331,698

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 FINANCIAL RATIOS
Current Ratios Quick Ratios

60 60

50 50

40 40
Ratio

Ratio
30 30

20 20

10 10

0 0
1 2 3 1 2 3
Year Year

Inventory Turnover Gross Profit Margin

1 100.00%

1 90.00%

1 80.00%

1 70.00%

1 60.00%

Percent
Times

1 50.00%

0 40.00%

0 30.00%

0 20.00%

0 10.00%

0 0.00%
1 2 3 1 2 3

Year Year

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 Net Profit Margin Return on Assets

40.00%
25.00%

35.00%

20.00%
30.00%

25.00%
15.00%

Percent
Percent

20.00%

10.00%
15.00%

10.00%
5.00%

5.00%

0.00%
1 2 3 0.00%
1 2 3
Year
Year

Return on Equity Debts to Equity

40.00% 3%

35.00%
3%

30.00%

2%
25.00%

Percent
Percent

20.00% 2% Serie…

15.00%
1%
10.00%

1%
5.00%

0.00%
0%
1 2 3
1 2 3
Year
Year

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 Debts to Assets Times Interest Earned

3% 25000000

2% 20000000

2% 15000000
Percent

Times
1% 10000000

1% 5000000

0% 0
1 2 3 1 2 3
Year Year

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