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BUSINESS PLAN

FINANCIAL

2008 ISMAIL AB.WAHAB, MALAYSIAN ENTREPRENEURSHIP DEVELOPMENT CENTRE (MEDEC), UNIVERSITI TEKNOLOGI MA

PLAN

PLAN

FinePlanner

Complimentary
Edition

FINANCIAL PLAN
FOR SMALL AND MEDIUM BUSINESSES

2010 Ismail Ab.Wahab, Malaysian Academy of SME & Entrepreneurship Development (MASMED), Universiti Teknologi MARA

USER'S GUIDE

Name of Business/Company

.Please type your company's name here..


Select Language/Pilih Bahasa

Form of Business

FORECASTING
Capital Expenditure Projections
Pre-Operating and Working Capital Projections

English

Private Limited Company

Sales and Purchase Projections

Malay

Sole-Proprietorship/Others

Forecasted Project Cost and Financing

SUMMARY AND SCHEDULES


Planning Period

Nature of Business

3 Years

Manufacturing

5 Years

Trading/Distribution
Service

Start Year of Projection

Total Project Cost


Sources of Financing
Monthly Loan Payment
Monthly Hire-Purchase Payment

Start Month of Projection


January
February
March
April
May
June
BRIEF REPORTS
July
August
Cash Balance
September
Income
October
November Total Assets & Liabilities
December

Total Owners' Equity

Project Cost and Sources of Finance Summary


Fixed Assets and Depreciation Schedules
Loan Amortization Schedule

FINANCIAL REPORTS
Pro-forma Cash Flow Statement
Pro-forma Income Statement
Pro-forma Balance Sheet
Financial Performance

Time to Break-Even
Paybak Period for Start-Up Fund
Internal Rate of Return

Gold
Award

Invention, Innovation & Design 2009


Universiti Teknologi MARA Malaysia

Bronze
Award

International Invention, Innovation &


Technology Exhibition (ITEX) 2009
Malaysian Invention & Design Society

ANCIAL PLAN

Academy of SME & Entrepreneurship Development (MASMED), Universiti Teknologi MARA

USER'S GUIDE
FORECASTING
Capital Expenditure Projections
Pre-Operating and Working Capital Projections
Sales and Purchase Projections
Forecasted Project Cost and Financing

SUMMARY AND SCHEDULES


Project Cost and Sources of Finance Summary
Fixed Assets and Depreciation Schedules
Loan Amortization Schedule

FINANCIAL REPORTS
Pro-forma Cash Flow Statement
Pro-forma Income Statement
Pro-forma Balance Sheet
Financial Performance

BRIEF REPORTS
Time to Break-Even
Paybak Period for Start-Up Fund
Internal Rate of Return

International Invention, Innovation &


Technology Exhibition (ITEX) 2009
Malaysian Invention & Design Society

Complimentary
Edition

CAPITAL EXPENDITURE PROJECTI


Anggaran Perbelanjaan Aset Tetap

.Please type your company's name here..


Capital Expenditure
Types of Fixed Assets

Estimated Cost (RM)

Administrative/Organisation
Land & Building

Sales/Marketing

Operations/Technical

Total

Depreciation method
Straight line

F
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2010 Ismail Ab.Wah

Jika menggunakan BM, sila tukar kepada "garis lurus" atau "bak

URE PROJECTION

aan Aset Tetap

Estimated Economic Life


(years)

5
5
5
5
5
5
5
5
5
5
5
5
siah
Main Menu

2010 Ismail Ab.Wahab MASMED UiTM

, sila tukar kepada "garis lurus" atau "baki berkurang"

PRE-OPERATING & WORKING CAPIT

Complimentary
Edition

.Please type your company's name here..

Pra-Operasi & Modal


Kerja

Pre-Operating & Working Capital Projections


Pre-Operating & Incorporation Costs (one-off)
Development Cost
Business Incorporation Costs
Deposit (rent, utilities, etc.)
Other Pre-operating & Incorporation costs
Sales & Marketing Costs (monthly)

General & Administrative Costs (monthly)

Operations & Technical Costs (monthly)


Purchase of Raw Materials/Goods
Carriage Inwards
Salaries, Wages, EPF & SOCSO

Other Expenditure (annually)

Total Pre-Operations & Working Capital Expenditure

Annual Increase in Working Capital (if any)


Year 2
Year 3

Tax Rates
Year 1
Year 2
Year 3

F
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2010 Ismail Ab.Wahab MASMED

RKING CAPITAL

perasi & Modal


rja
RM

10%
10%
0%
0%

25%
25%
25%
25%
25%
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2010 Ismail Ab.Wahab MASMED UiTM

SALES & PURCHASES

Complimentary
Edition

Jualan & Bellian

.Please type your company's name here..


Sales & Purchase Projections
Sales Projections
January
2015
February
2015
March
2015
April
2015
May
2015
June
2015
July
2015
August
2015
September
2015
October
2015
November
2015
December
2015
Total 2015
Total 2016
Total 2017

RM
-

Sales Collections
In the month of sales
One month after sales
Two months after sales
Ending Inventory of Raw Materials

End of 2015
End of 2016
End of 2017

Purchase Projections
January
2015
February
2015
March
2015
April
2015
May
2015
June
2015
July
2015
August
2015
September 2015
October
2015
November
2015
December
2015
Total 2015
Total 2016
Total 2017

Purchase Payments
100%

0%
0%

In the month of purchase


One month after purchase
Two months after purchase

RM

Ending Inventory of Finished Goods

End of 2015
End of 2016
End of 2017

Fi
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Pl
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2010 Ismail Ab.Wahab ME

RM
-

s
100%

0%
0%
RM

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2010 Ismail Ab.Wahab MEDEC UiTM

Complimentary
Edition

PROJECT IMPLEMENTATION
COST
Kos Pelaksanaan Projek

.Please type your company's name here..


Project Implementation Cost
Capital Expenditure

Cost

Sources of Financing

Land & Building

0 Cash
0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

0 Cash

Working Capital

months

Sales & Marketing Costs (monthly)

Cash

General & Administrative Costs (monthly)

Cash

Operations & Technical Costs (monthly)

Cash

Pre-Operating & Incorporation Costs (one-off)

Cash

Other Expenditure (annually)


Provision for Contingencies
TOTAL

0%

Cash
0 Cash
0
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F
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P
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2010 Ismail Ab.Wahab MASMED UiTM

Jika menggunakan BM, sila tukar "cash" kepada "tunai"

Complimentary
Edition

SOURCES
OF PROJECT FINANCING
Sumber Pembiayaan Projek

.Please type your company's name here..


Sources of Project Financing
Capital Expenditure
Land & Building

Own Contributions
Existing F. Assets
Cash

Cost
0

Sales & Marketing Costs (monthly)

General & Administrative Costs (monthly)

Operations & Technical Costs (monthly)

Pre-Operating & Incorporation Costs (one-off)

Other Expenditure (annually)

Provision for Contingencies

TOTAL

Loan

Working Capital

Proposed Terms of Loan (if required)

Interest rate
Loan tenure (years)

Proposed Terms of Hire-Purchase (if required)

5%

Interest rate

10

Tenure (years)

5%
5
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FinePlann
er

2010 Ismail Ab.Wahab

Hire-Purchase

2010 Ismail Ab.Wahab MEDEC UiTM

LOAN AMORTIZATION & HIR

Complimentary
Edition

Jadual Bayaran Balik Pi

.Please type your company's name here..


LOAN AMORTIZATION SCHEDULE
Amount (RM)
Interest Rate
Duration (yrs)
Method
Year

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

0
5%
10
Annual Rest
Instalment Payments
Interest
Annual Payments

Principal

FinePlann
er

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

ZATION & HIRE-PURCHASE SCHEDULES

ual Bayaran Balik Pinjaman & Sewa-Beli


.Please type your company's name here..
HIRE-PURCHASE REPAYMENT SCHEDULE

CHEDULE

Amount (RM)
Interest Rate
Duration (yrs)
Principal Balance

Tahun

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

0
5%
5
Bayaran Ansuran
Faedah

Pokok

BayaranTahunan

HEDULES

EDULE

Baki Pokok

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Complimentary
Edition

DEPRECIATION OF FIX

Susutnilai Aset Teta

.Please type your company's name here..


Type of Fixed Asset
Cost (RM)
0
Depreciation Method
Straight Line
Economic Life (yrs)
5
Year

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

0
1
2
3
4
5
6

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Book Value

Book Value

0
0
Straight Line
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

7
8
9
10

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

0
1
2
3
4
5
6
7
8

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Book Value

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Book Value

0
0
Straight Line
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

9
10

FinePlan

N OF FIXED ASSETS

nilai Aset Tetap


Type of Fixed Asset
Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

0
1
2
3
4
5
6

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Book Value

Book Value

0
0
Straight Line
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

7
8
9
10

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

0
1
2
3
4
5
6
7
8

Accumulated
Depreciation

Type of Fixed Asset


Cost (RM)
Depreciation Method
Economic Life (yrs)
Year

Book Value

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

0
0
Straight Line
5

Annual
Depreciation

0
1
2
3
4
5
6
7
8
9
10

Book Value

0
0
Straight Line
5

Annual
Depreciation

Accumulated
Depreciation

Book Value

9
10

Main Menu
2010 Ismail Ab.Wahab MEDEC UiTM

PVIFA=

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Loan amt Principal


0

0.6139
7.7217349292
Int
-

annual payme
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-

Balance
-

Complimentary
Edition

.Please type your company's name here..


Pro-forma Cash Flow Statement

MONTH Pre-Operations

January

February

CASH INFLOW
Capital (Cash)

Loan
Cash Sales
Collection of Accounts Receivable

TOTAL CASH RECEIPT

0
0

0
0

Sales & Marketing Expenditure

General & Administrative Expenditure

Operations & Technical Expenditure

Other Expenditure

CASH OUTFLOW
Pre-operating & Incorporation Expenditure

Purchase of Fixed Assets

Hire-Purchase Repayment:
Principal

Interest

Principal

Interest

Tax Payable

Loan Repayment:

TOTAL CASH OUTFLOW

CASH SURPLUS (DEFICIT)

BEGINNING CASH BALANCE


ENDING CASH BALANCE

FinePl
an

PRO-FORM

2015 MONTHLY CASH FLOW


March

April

May

June

July

0
0

0
0

0
0

0
0

0
0

PRO-FORMA CASH FLOW STATEMENT


Aliran Tunai Pro-forma

W
August

September

October

November

December

0
0

0
0

0
0

0
0

0
0

ATEMENT

2015

2016

2017

0
0

0
0

0
0

Complimentary
Edition

PRO-FORMA INCOME STATEMENT


Penyata Pendapatan Pro-forma

.Please type your company's name here..


Pro-forma Income Statement
Years

2015

2016

2017

0
#VALUE!

0
#VALUE!

#VALUE!

#VALUE!

Sales

Less: Expenditure
Pre-Operating & Incorporation Expenditure

General & Administrative Expenditure

Sales & Marketing Expenditure


Operations & Technical Expenditure

Other Expenditure

Interest on Hire-Purchase

Interest on Loan

Depreciation of Fixed Assets

Total Expenditure

Net Income Before Tax

#VALUE!

#VALUE!

Tax

#VALUE!

#VALUE!

Net Income After Tax

#VALUE!

#VALUE!

Accumulated Net Income

#VALUE!

#VALUE!

0
0

Complimentary
Edition

PRO-FORMA BALANCE SHEET


Kunci Kira-Kira Pro-forma

.Please type your company's name here..


Pro-forma Balance Sheet
2015

2016

2017

Main Men

Pro-forma Cash Flow

ASSETS

Pro-forma Income

Non-Current Assets (Book Value)


Land & Building
Other Fixed Assets

0
-

0
-

Pro-forma Balanc

Financial Perfo

Other Assets
Deposit

Current Assets

SUMMARY
2015
2016

Inventory
Accounts Receivable

0
0

0
0

0
0

Cash Balance

Capital

Accumulated Income

#VALUE!

#VALUE!

#VALUE!

#VALUE!

TOTAL ASSETS

2017

Owners' Equity

Long-Term Liabilities
Loan Balance

Hire-Purchase Balance

Accounts Payable

TOTAL EQUITY & LIABILITIES

#VALUE!

#VALUE!

#VALUE!

#VALUE!

#VALUE!

#VALUE!

Current Liabilities

FinePlanner

FINANCIAL P

Complimentary
Edition

.Please type your company's name here..


Financial Ratio Analysis

2015

LIQUIDITY
Current Ratio

NA

Quick Ratio (Acid Test)

NA

EFFICIENCY
Receivable Turnover

NA

Inventory Turnover

NA

PROFITABILITY
Gross Profit Margin

NA

Net Profit Margin

#DIV/0!

Return on Assets

#DIV/0!

Return on Equity

#DIV/0!

SOLVENCY
Debt to Equity

#DIV/0!

Debt to Assets

#DIV/0!

Time Interest Earned

#DIV/0!

Break-even Analysis
Total projected sales(RM)
Total variable costs (cost of sales)
Contribution margin
Contribution margin ratio
Fixed costs
Total costs
Net Profit

2015
NA
NA
NA

Break-even sales
Percentage of break-even to sales

Current Ratio

Current Ratio

Receivable Turnover

Gross Profit Margin

Return on Assets

Return on Assets

Debt to Equity

Time In

FinePlan
ner

NANCIAL PERFORMANCE

Ratio

Prestasi Kewangan

2016

2017

2018

2019

Main Menu
Pro-forma Cash Flow Statement

NA

NA

#VALUE!

#VALUE!

Pro-forma Income Statement

NA

NA

#VALUE!

#VALUE!

Pro-forma Balance Sheet


Financial Performance

NA

NA

#VALUE!

#VALUE!

NA

NA

NA

NA

NA

NA

NA

NA

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

#DIV/0!

#DIV/0!

#VALUE!

#VALUE!

PAYBACK PERIOD FOR


START-UP FUND

Less than 1 year

INTERNAL RATE OF
RETURN (IRR)

2016

2017
-

NA
NA
NA

Err:523

NA
NA
NA

NA
NA

NA
NA

NA

NA
TIME TO BREAK-EVEN

#VALUE!

#VALUE!

Less than 1 year

Quick Ratio (Acid Test)

Ratio

Quick Ratio (Acid Test)

Turnover

Inventory Turnover

t Margin

Net Profit Margin

Assets

Return on Equity

Assets

Return on Equity

Debt to Assets

Equity

Time Interest Earned

2009 Ismail Ab.Wahab MEDEC UiTM

st)

2015
Current Ratio

NA

Quick Ratio (Acid Test)

NA

2016
NA

2015

2016
NA

2015
Receivable Turnover

NA

2016
NA

2015
Inventory Turnover

NA

Gross Profit Margin

NA

2016
NA

2015

2016
NA

2015

2016

Net Profit Margin

#DIV/0!

#DIV/0!

Return on Assets

2015
#DIV/0!

2016
#DIV/0!

Return on Equity

2015
#DIV/0!

2016
#DIV/0!

st)

Debt to Equity

2015
#DIV/0!

2016
#DIV/0!

Debt to Assets

2015
#DIV/0!

2016
#DIV/0!

Time Interest Earned

2015
#DIV/0!

2016
#DIV/0!

mail Ab.Wahab MEDEC UiTM

2017
NA

2018

2019

#VALUE! #VALUE!
2017

NA

2018
2019
#VALUE! #VALUE!

2017
NA

2018

2019

#VALUE! #VALUE!
2017

NA

2018
NA

2017
NA

NA
2018

NA
2017

2019

2019
NA

2018

2019

#DIV/0! #VALUE! #VALUE!


2017
2018
2019
#DIV/0! #VALUE! #VALUE!

2017
2018
2019
#DIV/0! #VALUE! #VALUE!

2017
2018
2019
#DIV/0! #VALUE! #VALUE!
2017
2018
2019
#DIV/0! #VALUE! #VALUE!
2017
2018
2019
#DIV/0! #VALUE! #VALUE!

BRIEF REPORT

TIME TO BREAK-EVEN

Less than 1 year


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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

PAYBACK PERIOD FOR START-UP FUND

Less than 1 year


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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

INTERNAL RATE OF RETURN (IRR)

Err:523
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

TOTAL PROJECT COST

RM
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

TOTAL PROJECT COST

0
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

SOURCES OF FINANCING

Cash
Existing F. Assets
Loan
Hire-Purchase
Total
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

SOURCES OF FINANCING

RM0
RM0
RM0
RM0
RM0
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09 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

CASH BALANCE

2015
2016
2017

RM
RM
RM

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

CASH BALANCE

0
0
0

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

NET INCOME BEFORE TAX

2015
2016
2017

RM
RM
RM

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

T INCOME BEFORE TAX

0
0
0

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Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

OWNERS' EQUITY (ACCUMULATED

2015
2016
2017

RM
RM
RM

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

NERS' EQUITY (ACCUMULATED)

0
0
0

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009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

TOTAL ASSETS & LIABILITIES (ACCUMULAT


ASSETS

2015
2016
2017

RM
RM
RM

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

TOTAL ASSETS & LIABILITIES (ACCUMULATED)


ASSETS

LIABILITIES

RM 0
RM 0
RM 0

0
0
0

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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

ESTIMATED MONTHLY LOAN PAYMEN

RM 0
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

MONTHLY LOAN PAYMENT

per month

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mail Ab.Wahab MEDEC UiTM

BRIEF REPORT

ESTIMATED MONTHLY HIRE-PURCHASE P

RM
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2009 Ismail Ab.Wahab MEDEC UiTM

BRIEF REPORT

ESTIMATED MONTHLY HIRE-PURCHASE PAYMENT

per month
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2009 Ismail Ab.Wahab MEDEC UiTM

USER 'S GUIDE

FinePlan
FINANCIAL PLANNING PACKAGE FOR SMALL AND MEDIUM BUSINESSES
PROF. MADYA DR. ISMAIL AB.WAHAB, MALAYSIAN ENTREPRENEURSHIP DEVELOPMENT CENTRE (MEDEC),
FACULTY OF BUSINESS MANAGEMENT, UNIVERSITI TEKNOLOGI MARA, SHAH ALAM, SELANGO R

FinePlanner is an MS Excel-based financial planning package for generating


comprehensive, highly professional and presentable financial projections for start-up
entrepreneurs and small business operators. Based on market survey and
assumptions, FinePlanner generates cash flow, income statement and balance sheet
forecasts for up to five years ahead. It makes it suitable for managers and
entrepreneurs with minimal knowledge in finance and accounting and who have no
previous experience in financial or business planning.

Objective
FinePlanner is a tool that can assist small and medium-sized entrepreneurs in the
preparation of professional, comprehensive and presentable financial projections for
business start-up and expansion.
Novelty
Dual language: English and Malay Generate comprehensive and presentable financial
projection up to five years
Suitable for businesses engaged in manufacturing, trading or services
Suitable for incorporated or unincorporated businesses
Suitable for all levels of existing and potential entrepreneurs: students & graduates
entrepreneurs, corporate entrepreneurs, rural entrepreneurs, agro entrepreneurs, etc.

Getting Started

Before you start the planning process, select the language by clicking English or Malay buttons planning period.
vSelect the planning period (3 or 5 years).
vChoose first year of planning period and first month of planning period.
vSelect the legal form of business (private limited company or sole-proprietorship and others)
vSelect nature of business (manufacturing, trading/distribution or service)
Financial Forecasting

vClick Capital expenditure projections menu for entering the projected cost of each fixed assets required for
business. Please key in the cost of new fixed assets and/or the market value for existing fixed assets (if an
Determine the number of years of economic or productive life for each asset (except land & building). The econo
life of an asset refers to the period (normally expressed in number of years) whereby the asset can be economic
used i.e. without much maintenance or breakdowns.

v Next, select the depreciation method for all assets. The recommended method for calculating depreciation
either straight-line or declining balance. The simplest and most commonly used is straight line method. It is calcula
by taking the purchase or acquisition price of an asset subtracted by the salvage value divided by the total produc
years the asset can be reasonably expected to benefit the company [called useful life in accounting jargon].
planning purposes, the salvage value can be zero. The declining method of depreciation accelerates deprecia
faster than the straight-line method because it bases each year's depreciation on the assets previous-year net b
value.
vGo back to the main menu.

Projection of Pre-operating and Working Capital Expenditure

v First, determine the pre-operating and incorporation costs. The pre-operating cost can includes busin
registration and licences, legal fees , stamp duties etc.
v Next, estimate the sales and marketing costs, general and administrative costs, and operations a
technical costs. These costs are incurred every month and are generally known as working capital. Other costs wh
are not paid monthly but are incurred every year can be included under other expenditure (annually) category s
as payment of road tax and insurance for motor vehicles, licences etc.

vEstimate the increment rate for working capital expenditure (if any). Next, choose the current and estimated rates
corporate taxation from the list. The system will only calculate the amount of tax for private limited company.
vGo back to the main menu.

Projections for Sales and Purchases

vFill in the sales projections table. Sales (or revenues) refers to the sales forecast derived from the
marketing plan. It is the total of forecasted cash and credit sales for each year throughout the planned
period. amount
vThe
Sales are
of to
monthly
be forested
purchases
monthly
in the
(first
purchase
planningProjections
year) and annually
table should
(after first
be equal
year).to the amoun
purchases that have been projected in the working capital section under operations and technical cos
category.
vIf there some credit sales or purchases, choose the percentage of credit sales collections and cred
purchase payments in the columns provided.
vNext, estimate the ending inventory of raw materials and finished goods (for manufacturing
businesses only). For trading and distribution businesses, the ending inventory figures are to be entered
the ending inventory of finished goods column only. It is assumed that there is no ending inventory fo
businesses involved in service industry. If your businesses are involved in both trading and service
activities, please select trading/distribution category under nature of business in the main menu.
vGo back to the main menu.

Project Costs and Financing


vThe project cost is the total cost of implementation of the proposed project. The project cost schedu
incorporates both long and short terms expenditure needed to start the business. The components of th
schedule include capital expenditure, working capital, pre-operating and incorporation costs, other
expenditure and provision for contingency.

vThe sources of financing schedule shows various sources of finance available to fund the business
These could be internal and external sources of finance. The internal sources of finance include equity
contributions in cash and/or existing assets. External sources may include term loan and hire purchase
For planning purposes, other sources such as grants and money borrowed from individuals should be
considered as own cash contributions. For each asset and working capital required, p lease choose the
type of financing from the list provided in the sources of financing column.
vThe amount of working capital is dependent upon the period until the business can generate enoug
sales to cover its short-term expenditure. Therefore, the amount of working capital needed could be in th
range of one to six months. Please select the number of months from the list provided in relevant colum
vThe final component of the project cost is provision for contingency. This cost is added to the total cost of
other four components based on a certain percentage (usually between 5 to 10 percent). The reason for includ
contingency cost in the project implementation cost schedule is to take care of any variance of the actual from
budgeted expenditure. For example, if the cost of materials increases during the planned period, the firm can uti
this fund to cover the extra cost without having to search for new funding.
SUMMARY AND SCHEDULES

This section presents the supporting schedules relating to the information that have been provided
the forecasting section. The schedules are project cost and sources of funds summary, fix
assets and depreciation schedules, and loan amortization schedule.
REPORTS AND ANALYSIS

This section presents the pro-forma financial statements and analysis of the financial performance a
position of the proposed project.
Pro-forma cash flow statement

v Pro forma cash flow statement refers to the projected statement of cash inflows and outflo
throughout the planned period. Under normal circumstances, the pro forma cash flow statement
prepared between three to five consecutive years, with monthly details for the first year. The pro form
cash flow statement shows the following information:
Cash inflows the projected amount of cash flowing into the company.
Cash outflows the projected amount of cash flowing out of the company.
Cash deficit or surplus the difference between cash inflows and cash outflows.
Cash position the beginning and ending cash balances for a particular period.
Pro-forma Income Statement

vThe pro forma income statement shows the expected profit for the planned period. T
statement shows the following information:
Gross profit
Net profit

vGross profit is the gross margin realised after deducting the cost of goods sold from
sales. It represents the amount of profit before deducting other operating expenditure such
as administration expenditure, marketing expenditure, operations expenditure (for a tradin
entity), interest charges, depreciation charges on fixed assets (except for a manufacturing
concern) and other miscellaneous expenditure incurred throughout the year in order to
obtain the net profit before tax.
Pro-forma Balance Sheet

vWhile the pro forma income statement shows the financial performance of the
company for the planned period, the pro forma balance sheet shows the financial position o
the company at a specific point in time in terms of assets owned and how those assets are
financed. The pro forma balance sheet is prepared for a period of three years.
vThe general elements of the pro forma balance sheet include:
assets
owners equity
liabilities

vAssets are the economic resources of a business that are expected to be of benefit in th
future. Assets reported in the balance sheet are generally categorised into two categories:
non-current and current assets.
vNon-current assets include fixed assets and other assets that are owned and usua
held to produce products or services. These assets are not intended for sale in the short
term. Examples: property, plant, machinery, equipment, vehicles, major renovations and
long-term investments. For fixed assets, the values shown in the balance sheet are the boo
value i.e. the original cost less the accumulated depreciation.
vCurrent assets are short-term assets that can be converted into cash within a year.
Examples: cash, inventories (raw materials, work-in-process and/or finished goods),
receivables and other short-term investments.

vOwners equity refers to capital contributions from the owners or shareholders in term
of cash or assets plus the accumulated amount of net income. However, if the business
suffers a loss, the amount of loss will be deducted from the capital contributions.
vLiabilities are the amounts owed by the business to outsiders. They are categorised as
non-current
(long-term)
and current
liabilities.
vNon-current
or long-term
liabilities
refer to the long-term obligations of the busines

that mature in a period of more than one year. They usually include long-term loans as well
as
hire purchase.
vCurrent
liabilities refer to the short-term obligations of the business that mature withi
period of less than a year. The most common forms of current liabilities are accounts payab
and accrued payments

Financial Analysis
vFinancial analysis is a technique of examining financial statements to help the
entrepreneur analyse the financial position and performance of the business.
vFinancial analysis involves two basic steps: generating the information from the financia
statements and interpreting the results.
vThe most common form of financial analysis is ratio analysis.
vFinancial ratios are normally used to compare figures from the financial statement with
other figures, so that the true meaning of financial pictures can be obtained.

vThere are various financial ratios that the entrepreneur can look at. However, the most
commonly considered ratios in small business decision-making fall into four categories:
liquidity, efficiency, profitability and solvency.

v Liquidity Ratio: The term liquidity refers to the availability of liquid assets to meet short-te
obligations. Thus, liquidity ratios measure the ability of the business to pay its monthly bills.The m
widely used liquidity ratios are current ratio and quick ratio. Current ratio can be determined
dividing total current assets by total current liabilities. Generally, this ratio shows the business ability
generate cash to meet its short-term obligations. Quick ratio, also known as the acid test ra
measures the extent to which current liabilities are covered by liquid assets. To determine quick rat
the calculation of liquid assets does not take into account inventrories since it is sometimes difficult
convert them into cash quickly.
v The efficiency ratios measure how efficient the business uses its assets to generate sales. T
most widely used efficiency ratio for planning purposes is inventory turnover ratio. Inventory turnov
(or stock turnover) measures the number of times inventories have been converted into sales a
indicates how liquid the inventory is. All other things being equal, the higher the turnover figure, t
more liquid the business is. This ratio divides the cost of sales (or cost of goods sold) by the avera
value of inventory. The average value of inventory is derived by adding the opening and closing balan
of and dividing the total by two.

v Profitability ratios are important indicators of the business financial performance. Investors w
particularly be interested in these ratios since they measure the performance and growth potential
the business. Some of the commonly used profitability ratios are gross profit margin, net profit marg
return on assets and return on equity. Gross profit margin give a good indication of financial health
the business. Without an adequate gross margin, the business will be unable to pay its operating a
other expenses. Gross profit margin is calculated by dividing the business gross income by sales. N
profit margin is an indication of how effective the business is at cost control. The higher the net pro
margin, the more effective the business is at converting sales into actual profit. Net profit margin
calculated by dividing the business net income by sales. Return of assets measures the overall retu
that the business is able to make on its assets. This ratio is derived by dividing the business net pro
by total assets. Return of equity shows what the business has earned on its owners investment in t
business. This ratio is derived by dividing the business net profit by total equity.

This final category of ratios i.e. Solvency Ratios, is designed to help the entrepreneur measure the
degree of financial risk that his business faces. By referring to this ratio, the entrepreneur can assess
level of debt and decide whether it is appropriate for the business. The most commonly used solvency
ratios are total debt (liabilities) to equity (also known as leverage or gearing), total debt to total asset
and times interest earned (also known as interest coverage). The total debt to equity ratio measu
the percentage of the business assets financed by creditors relative to the percentage financed by th
owners. This ratio is calculated by dividing the the total debt by total equity. The debt to asset rat
measures the percentage of the business assets financed by creditors relative to the percentage
financed by the entrepreneur. This ratio is calculated by dividing the total debts by total assets. Time
interest earned ratio measures the number of times interest expense can be covered by profit befo
interest and tax. This ratio is calculated by dividing total inte

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