Financial Plan

Financial Plan

1. Profit and Loss

   • Types of costs
     • Cost of sales refers to cost incurred in bringing goods to point of sale
   • Work out your different costs
   • Shows all income earned and all costs incurred
   • If income is greater than cost incurred then = profit
   • If Costs exceed income = loss
   • New business - projected statement of profit & loss

2. Cash Flow Statements

   • Indicates financial position by describing profit/loss of business
   • It shows all the money that is coming in and being paid out
   • Difference between opening & closing balances
   • Helps identify operational problems and if finance is needed

3. Break-even Analysis

   • Point at which sales are equal to costs at a particular price
   • Determine the amount of sales required to keep business going
   • Shows investors how profitable a business might be
   • Depends on costs and profit estimates