Financial Management

9.0 FINANCIAL PLAN

INTRODUCTION

        Financial management is a decision making process concerned with the planning, acquiring and utilizing funds. It can be used as a statement to check and evaluate an organization’s performances that is crucial to its development, growth and survival. The person in charge with financial management is the financial manager.

        Financial plan shows that the short term and long term financial requirement in order to start a new business. Financial plan give the upper management a financial picture of the business. It serves as a report, summarizing a company’s financial status to aid in managerial decision making. Managers can be used financial statement to obtain information about trends or events in time to enable them corrective action in the coming period or month.

        Financial plan also provide the reliable information about charges in net resources resulting from profit directed activities. It is important in determine profit or loss of business for relevant year. Financial plan was prepared because it will assist partners in order to know some information that related with:-

• The amount of money to be invested in the project implementation cost.
• To identified and propose the relevant sources of fund.
• To ensure that initial capital sufficient.
• To appraise the viability before actual investment is committed.
• Payment of term loan that company had made.
• Cash flow statement for the accounting period.
• Their potential return from the business.

By preparing financial plan we can determine the potential of the business whether in can compete with other business or not. Furthermore, it will give some guideline about the expenses and sources that will incur in running the business.

OBJECTIVE

• To ensure that the fund is adequate when needed for short and long term investment.
• To evaluate the performance of the business in using the resources in order to maximize the profit.
• Plan the strategy to increase the income and at the same time to minimize the expenditure.
• To minimize the amount of cash in hand that the firm must hold for the use of conducting normal business activities.
• To analyze whether cash that has been use in running the business operation is efficient or not.
• To make the third party such as financial institution feel confidence with the company financial position in order to obtain loan.
• To evaluate the business potential whether it can compete with other organization.

STRATEGIES

• Make sure that company has sufficient amount of cash in order to take trade discount, to maintain credit rating and to meet unexpected cash needs.
• Give advice and opinion to other department such as administration, marketing and operation in order to reach the business objective.
• Make sure that cash was used in effectiveness and no such waste in expenses.
• Try to seek business opportunity in order to increase the financial strength or wealth of company.
• Make sure the increase in business profit at good stage.

9.1 DATA FINANCIAL INFORMATION

NAME OF BUSINESS/COMPANY:  STEVIA WORLD ENTERPRISE

1. Projected administrative and marketing expenditure:

Operations expenditure:

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