Financial Plan - An Introduction

Startups or big enterprises need Financial planning as it is a lifeline for company's survival. Having an idea about your financial obligations and earnings give you an advantage in arranging your priorities. A typical Financial plan has following components:

Assumptions: Assumptions are essential and key to form a foundation of any financial plan. Averages, opening balances, depreciation rates, units are all defined here.

Income Statement: This summarizes a company's revenues and expenses for a fiscal year. It reflects a company's operating performance by identifying the sources of income and the various costs and expenses, gains and losses, which result in a final net income figure.

Cash flow Statement: This is a worksheet that shows the flow of cash in and out of a company over a month by month period. Balance Sheet: A snapshot in time of a company's assets, liabilities, and net worth.

Performance Review: This statement provides information about how a company will perform in coming year using projected figures. It contains various financial ratios which are useful in quickly gauging company's performance.

Comments

Anonymous said…
You might find it useful to use a prebuilt template to generate the projections for you. Have a look at our Exl-Plan tools at "www.planware.org". There are several versions of Exl-Plan suit different business sizes and pockets !!
November 29, 2004 11:52 AM
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