Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Finance 1.Financial Planning 2.Financial Analysis 3.Principles of Investments 4.Cash Management& Control 5.Financial Forecasting a.Cost projections  Start-up costs  Monthly expenses  Working Capital  Variable cost  Sales projection b. Breakeven point c. Pro Forma financial statements  Income Statement  Balance Sheet  Cash Flows d. Ratio Analysis  ROI  ROE  Net Working Capital  Other Ratios e. Capital Requirements 6. Financial Risk Management

Pro Forma financial statements financial reports prepared in advance of planned transactions for new establishment of business investment. Lenders and investors will require such statements to structure or confirm compliance with their requirements Determine how much money the firm will need in a given period. Subtract the funds generated internally from the funds required to determine the external financial requirements. Remember; what you are preparing is an estimate and it’s based on your financial assumptions. Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Pro Forma financial statements types Pro Forma Financial Statements are: 1- Income statement 2- Balance Sheet 3- Cash Flows It’s required by both SMEs and Khalifa fund to provide the pro forma financial statements as an important par of your business plan. Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Pro Forma financial statements (SMEs and Khalifa Fund) SMEs How much will your expected profits be? How do you expect to use the profits that your company generates? Khalifa Fund 6.2 Key Financials & Profitability (Please provide projected /forecasted Income statement, cash flow and balance sheet for 5 to 7 years) Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Income Statement known as a profit and loss statement, is a summary of a company’s profit or loss during any one given period of time, such as a month, three months, or one year. The income statement records all revenues for a business during this given period, as well as the operating expenses for the business. Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Income Statement Small business owners use these statements to find out what areas of their business are over budget or under budget Income statements, along with balance sheets, are the most basic elements required by potential lenders, such as banks, investors, and vendors. They are required by SMEs and Khalifa Fund Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Example: Forecast the 2014 Income Statement Under Assumption of 10% increase

Application: Using Excel Sheet to prepare the Income Statement Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Pro Forma Balance Sheet A balance sheet is a snapshot of a business’ financial condition at a specific moment in time, usually at the close of an accounting period A balance sheet comprises assets, liabilities, and equity or owner’s capital. A balance sheet helps a small business owner quickly get a handle on the financial strength and capabilities of the business Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Application: Using Excel Sheet to prepare the Balance sheet Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Pro Forma Cash Flow The amount of cash a company generates and uses during a period, calculated by adding non-cash charges (such as depreciation) to the net income after taxes Cash in-flows usually arise from one of three activities - financing, operations or investing - though they also occur as a result of donations or gifts in the case of personal finance. Cash out-flows result from expenses or investments. Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Pro Forma Cash Flow Cash flow can be used as an indication of a company's financial strength. There are many ways to prepare your cash flow statement. All methods are focus on cash inflows-cash outflows It’s important to prepare a list of all expenses to be paid cash and another list to list the sources of cash. Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

Application: Using Excel Sheet to prepare the Cash flow statement Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen

References Justin G. Longenecker, ‎J. William Petty, ‎Leslie E. Palich (2013): Small Business Management; Cengage Publication. By Robert N. Lussier, Joel Corman, David Kimball (2014); Entrepreneurial New Venture Skills; Routledge.Publication Finance Citi Funded Entrepreneurship Training Program UNIVERSITY OF DUBAI Dr. Zahi Yaseen