Objective: Using the business idea you identified in BUS 101, or any other business idea you may have, build financial projections for the business that may be included in your business plan. Execution: • You must use Excel and Word to complete this assignment. NO EXCEPTIONS WILL BE MADE. • If you need additional help on excel, please visit: https://edu.gcfglobal.org/en/subjects/office/ o You must present all financial statements in Excel o In addition, you are expected to used tables and charts to add information to your report • You will need to do research to establish the basis for your numbers. SBA.org and SCORE.org are great starting points. You MUST use proper citations for all information that is not yours. Not doing so will be considered an Academic Honesty Policy violation. Part 1: Executive Summary: o Explain your business: ▪ What it is, ▪ How it is structured, ▪ Where it will be established, etc. o Include an industry analysis. ▪ What industry will you be in? ▪ How will your business fit into this industry? ▪ What competitive advantage will you bring to the industry? ▪ How big is the market, who are your key competitors, what will be you niche, etc. Part 2: Financial Statements: A business plan is forward looking and focuses on forecasting, not looking at what has already happened. It also looks at financial statements in less detail, so use larger categories, not minute details. • Sales Forecast – project for the first three years of business • Pro Forma Income Statement – For the first three years of business. Start with sales and expenses you have already calculated. With expenses, make sure to take into consideration both fixed and variable expenses. • Cash Flow Statement – Based on sales forecasts, balance sheet, etc. for the first 12 months of business. Make sure to take into consideration the variability of sales. • Balance Sheet – For the first three years of business. • Complete a breakeven analysis. • Calculate financial ratios that are key to showing the potential for your business. o You must calculate at least one each of: profitability ratios, asset utilization ratios, liquidity ratios and debt utilization ratios. o Using the book, industry analysis and other research, determine which ratios will be key to the success of your organization. Explain why you have selected the ratios you selected. • Analyze and discuss the outcomes of those ratios. o How does your company compare to itself over time and to industry and competitors? Part 3: Financing Decisions • Discuss whether or not you will seek funding. o Using your pro forma financial statements discuss: ▪ Will you need to seek funding for start-up costs? • NOTE: You cannot receive an inheritance or magically have money when you graduate from college ▪ Will you need funding over the period of time covered by your pro formas? • Using figure 6-8 in chapter 6, which types of financing will you pursue? • What will be your optimal mix? • What will you use financing for? • Discuss your current asset management policy? o How will you manage cash? o What types of securities will you offer and why? o What will be your accounts receivable policy and why? o What will be your inventory management policy and why? Part 4: Financial Analysis • Discuss the financial strength of your organization taking into consideration the financial statements and ratios you have calculated. Create an executive summary evaluating all of the information you have gathered? o Explain why this business is a good idea. o Explain why it will, or will not, be successful. o Analyze your financial ratios against competitors and industry. How does your company stand against others? o Look at your financial statements compared to industry and competitors. Are there any areas of concern? Any strengths? ▪ Are your financing requirements realistic?