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Scott Droney - Financial Strategy and Financial Objectives

Scott Droney specialises in offering customised structured solutions to meet funding requirements of mid-to-large corporates.

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Scott Droney - Financial Strategy and Financial Objectives

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  1. Financial Strategy and Financial Objectives Scott Droney

  2. Financial Strategy • Used to “capitalize” the venture • Finance • A = L + OE • How much Owners Equity? • How much Debt?

  3. Financial Strategy answers these ? • How much will it cost to startup? • How much will it cost to run the venture? • Short term cash needs when revenue low • Revenue and Expenses- operations • Capital (for fixed assets and business expansion), how much and when. • Sources of capital • Investors – equity • Loans - debt

  4. Financial Strategy - Components •  Sales forecasts •  Selling costs •  Gross profit •  Admin. Costs •  Pre-tax profit •  Balance sheet •  Working Capital •  Return on Investment •  Repayment proposal •  Collateral

  5. Financial Strategy • Provide specific details about when and how much money is needed • Provide HI-MID-LO estimates of future performance • For sales, profits and loan repayments

  6. Financial Planning Process • Establish Financial Objectives 5. Calculate startup costs and operating expenses 2. Prepare a Personal Budget 6. Prepare a personal balance sheet 3. Estimate Revenue & Expenses 7. Prepare income forecasts and projected balance sheets 4. Prepare a cash flow projection

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