
Virtual Business: Retailing. Chapter 17 Business Plan Analysis. After completing this lesson, you will be able to: Explain the importance of preparing a business plan Describe the main components of an effective business plan & the info. c ontained in each section
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After completing this lesson, you will be able to:
In this unit we will study business plans & explore the reasons for preparing a business plan
Whether you are preparing to open a new business, purchase an existing business, or expand an existing business, you need to develop a business plan
Benefits of preparing a business plan include helping you set & clarify your goals for the business & for yourself
Description of Business, Product, or Service:
The following info. should be part of the financial projections portion of the business plan:
Pro Forma Cash Flow Statements
Compute Net WorthTo compute net worth for your personal financial report, use this formula:Net Worth = Assets - Liabilities
Forecast RevenueTo forecast revenue for a proposed business, you will normally use a percentage (%) increase or decrease of revenue from industry averages for your areaTo forecast revenue as a percentage increase or decrease, use this formula:Forecasted Revenue = Percentage increase or decrease x Industry average of Revenue
Compute RevenueTo compute revenue, use this formula:Revenue = Unit sales x Price per unit
Compute Net SalesNet sales are a part of the income section of an income statementUse this formula to compute net sales:Net Sales = Total Sales – Total Expenses
Compute Net ProfitTo compute net profit, use this formula:Net Profit = Total revenue – Total Expenses
Compute EquityTo compute equity on a balance sheet, use this formula:Equity = Assets - Liabilities