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.
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