Reference no: EM132211870
Module Overview:
Being aware of the costs associated with starting, running, and maintaining a business is crucial to the sustainability of the business.
In this Module, you will develop an awareness of the costs incurred when creating and managing a business and of ways to keep up with those costs by using proper accounting methods and systems that are universally accepted.
You will also discuss the financial management process and its components, the importance of having the knowledge of money in a business, and an overview of business taxes and how to keep track of them.
Conclusion
In this Module, you reviewed the costs involved in the process of creating and managing a business; the financial management process, including financial statements, forecasts, budgets, and financial ratios; and the impact of business taxes on business and how to keep track of them. You also discussed the financial strategies and the legal issues related to starting and running a business.
In this module's second assignment, you will develop the third part of a business plan and submit it. In the third part of the business plan, you need to prepare a simplified financial plan for the business initiative being developed in this course.
Module Readings
Complete the following readings early in the module:
Module overview
From your course textbook,Entrepreneurship: Starting and operating a small business, read the following chapters:
Understanding and Managing Start-up, Fixed, and Variable Costs
Using Financial Statements to Guide A Business
Cash Flow and Taxes
Financing Strategy
Addressing Legal Issues and Managing Risk
From the Argosy University online library resources, read the following articles:
Huyghebaert, N., & Van de Gucht, L. M. (2007). The determinants of financial structure: New insights from business start-ups. European Financial Management, 13(1), 101-133.
Phillips, J.J. (2003). ROI best practices. Chief Learning Officer, 2(6), 50-52.
Global Risk Alliance Pty Ltd. (2005). Risk management guide for small business.
Smith, C.W. (Jan 2007). On governance and agency issues in small firms. Journal of Small Business Management, 45(1), 176-178. ProQuest Document ID: 221003174)
Assignment: Business Plan Breakdown 3-The Simplified Financial Plan
Instructions
This is the third milestone of your business plan-the financial plan.
Tasks:
Research the costs, financial statements, cash flow, and risks of your chosen project From Assignment Titled: Business Plan Breakdown 1-The Choice of Business.
(This Assignment will be attached as a attachment if needed for references) Based on your research and the knowledge you have gained from the course Titled: The Functional Contribution to Organizational Success, Master of Science in Organizational Leadership [MS_OL], create a simplified 4- to 5-page financial plan including tables and charts. For the financial plan:
Estimate the capital requirements, use of capital, start-up requirements (if applicable), and other probable costs involved in the implementation and subsequent operation of your project.
Identify the sources of financing.
Define a payback period.
Prepare cash flow projections.
Prepare a projected balance sheet representing the end of the first calendar year of operations and defining assets and liabilities, both current and long term.
Prepare income statement projections for the end of the first calendar year of operations, including charts showing gross revenues, gross profit, and net income.
Define the meaning of a break-even analysis and prepare an analysis appropriate for your project.
Prepare a ratio analysis, including the definition and value of the following ratios (whichever applicable)-current, quick, debt, debt-to-equity, average inventory turnover, receivables turnover, payables turnover, net sales to working capital, net profit to sales, and net profit to equity.
Prepare a list of possible risks associated with the implementation and future operation of your project and describe the significance of each of them.