1. Financial Feasibility
Presented by:
Farida Komalasari

2. Main Topics:
Financial Plan
Financial Analysis

3. Financial Goals: Ultimate goal:
To make money now and to make more money in the future
Three basic financial goals:
Maximize the wealth of the business owners (investors)
To meet interest payments on debt
To grow

4. Preparing the Financial Plan:
Three financial areas:
Summarize the forecasted sales and the appropriate expenses (at least 3 years)
Cash Flow figures (at least three years, monthly for the first year)
Projected Balance sheet

5. Preparing the Financial Statements:
Income statement
Statement of R/E
Cash flow statement
Balance sheet

6. Capital gains or losses Statement of R/E:
Income statement:
Revenue
Expenses
Capital gains or losses
Statement of R/E:
Beginning retained earning
Net income
Dividends paid during the accounting period
Cash flow statement:
Explain the reasons for changes in the cash balance, showing sources and uses of cash
Balance sheet:
Balances of all asset accounts
Balances of all liability accounts
Capital stock balance

7. Income Statement: Sales xx COGS (xx) Gross Profit xx
Operating expenses (xx)
EBIT xx
Interest expense (xx)
EBT xx
Tax (xx)
Net Income xx

8. Cash Flow Statement: Operating Activities Investing Activities
Financing Activities

9. Balance Sheet: Liabilities: Current Asset: A/P Cash Other STL A/R LTL
Owner’s Equity:
Capital
R/E
Total L+OE
Current Asset:
Cash
A/R
Inventory
Fixed Asset:
Equipment
Depreciation
Total Asset

10. Financial Analysis: Break-even Analysis Technique for: or
determining how many units must be sold or
how much sales volume must be achieved
in order to break even

11. Break-even Formula: TFC B/E (Q) = ---------- P-VC/unit
TFC = Total Fixed Cost
P = Selling Price
VC = Variable Cost

12. Financial Statement Analysis:
Horizontal Analysis
Vertical Analysis
Ratio Analysis:
Liquidity ratios: e.g. current ratio (CR)
Activity (asset turnover) ratios: e.g. total asset turnover (TATO)
Solvability (financial leverage) ratios: e.g. debt to equity ratio (DER)
Profitability (rentability) ratios: e.g. return on equity (ROE)

13. CR = current assets/current liabilities
TATO = total assets/sales
DER = total debt/total equity
ROE = net income/shareholder equity

14. Sources of Fund: Shareholder equity
Bootstrap (husband/wife, parent, etc.)
Personal lender (friend, cousin, etc.)
Bank loan (short term, medium term, long term)
Pawning
Leasing
Factoring
Venture capital
Government programs
Etc.

15. THE END

16. Conclusion
ODD > EVEN : high in credibility, leadership, strategic networking, innovative thinking, achieving target

17. Conclusion
ODD < EVEN : high in approachability, people skill, information gathering, problem solving

18. Conclusion
ODD = EVEN : valuable talent for being a liaison or mediator, as well as radiating qualities of charismatic leadership