Financial Plan - Assumptions-1
By Harish Keshwani at 29 November, 2004, 9:19 pm
I received a comment from a Planware representative about their Excel-based products dealing with Financial projections and Business Plans. I checked out their website, they have some wonderful products, which may be used as a model for building the plan and creating projections. You will see some of those projections being used in our plan too.
Before we start with an actual Financial plan, there is a need to make some Assumptions. These assumptions will put the plan in proper perspective leaving no doubts in the mind of Venture Capitalists, when they read the plan projections. In assumptions area, you clearly get to specify average values, opening balances, percentages, tax rates and some ratios.As a start-up business, we will have very few variables that we can state in our assumptions list. I will build a template here and fill in the values tomorrow. Not all variables will be filled, as we are a service organization.
| Variables | Units | First Year | Second Year | 3-5 Years |
| Average Monthly Sales | US $000s | |||
| Desired average finished inventory | % of Sales | |||
| Cost of materials/goods | As % Sales | |||
| Target materials/goods inventory | US $000s | |||
| Average monthly direct costs | US $000s | |||
| Average monthly overhead expenses | US $000s | |||
| Opening total cost of fixed assets | US $000s | |||
| Accumulated opening depreciation | US $000s | |||
| Average depreciation rate | % p.a. | |||
| Planned capital expenditure for year | US $000s | |||
| Interest rate for cash balances | % p.a. | |||
| Interest rate for all debt/notes | % p.a. | |||
| Opening cash balance (deficit) | US $000s | |||
| Opening longterm debt/notes | US $000s | |||
| Net change in longterm debt/notes in yr | US $000s | |||
| Opening accounts receivable | US $000s | |||
| Opening accounts payable | US $000s | |||
| Average credit given on sales | Days Sales | |||
| Average credit taken for materials/goods | Days Sales | |||
| Expected federal/state tax rate | % | |||
| Planned dividend for year | US $000s | |||
| Opening number of shares | 000s | |||
| Proceeds of new stock issues | US $000s | |||
| Number of new shares issued | 000s |
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