Financial Plan for Startup Small and Medium Enterprises

ABC Child Care Company is a startup Company that provides child care services. Being a startup Company, ABCs expenses tend to exceed the revenue since it focuses on development and marketing its services to the people. ABC Child Care Company being micro has a very few number of employees, and most of them are the founders of the organization. The Company mostly rely on funds provide by the government, donations by the well-wishers, fundraising, fees, in-kind contributions and many more. The following are the financial statements of ABC Child Care Company.

Cash flow statement.

Cash flow statement records cash receipts and cash payments in an enterprise. The cash flow is important in that it determines whether the enterprise has enough cash to pay the enterprises debts (cash balances or cash deficits).

ABC Child Care Company

Cash Flow Statement

For Twelfth Month Period Ending 31st December 2015.

Cash Balance 31/12/2014 $ 2,000

Cash Receipts:

Parent Fees $ 34,000

Government Funding $ 5,000

Foundation Grant $ 10,000

TOTAL CASH RECEIVED $ 49,000

TOTAL CASH AVAILABLE $ 51,000

Cash Payment:

Salaries $ 35,200

Taxes $ 1,500

Utilities $ 1,800

Supplies $ 4,500

Advertisement $ 500

Insurance $ 100

Food $ 5,000

Rent $ 1,750

Telephone $ 250

TOTAL CASH NEEDED $ 50,600

CASH BALANCE (DEFICIT) YEAR END $ 400

Balance Sheet.

The balance sheet is prepared at the end of an accounting period and shows the financial position of a business. The balance sheet entails, assets, liabilities and net assets. The assets are further categorized into current and fixed assets. Current assets include cash and other assets that can be converted into cash easily within a year including, cash at bank and in hand debtors. Fixed assets or long-term assets are those assets that are hard to convert into cash and are expected to remain in their non-cash state for more than one year. ABC Child Care Company is yet to invest in more fixed assets and, therefore, the balance sheets net worth consists of a smaller figure. Liabilities are debts owed by ABC child care business to any of its creditors. As with current assets, current liabilities are those debts that a business expects to pay within one year. These include: accounts payable, taxes payable and accruals.

ABC Child Care Company

Balance Sheet

For Twelve Month Period Ending 31st Dec. 2015

Fixed Assets: Depreciation

Motor Vehicle $ 5,000 $ 500 $ 4,500

Equipment $ 2,500 $ 250 $ 2,250

Fixtures and Fittings $ 1,500 $ 150 $ 1350

TOTAL FIXED ASSETS $ 8,100

Current Assets:

Accounts Receivable $ 2,200

Bank and Cash $ 2,500

TOTAL CURRENT ASSETS $ 4,700

TOTAL ASSETS $ 12,800

Liabilities:

Current Liabilities. Taxes Payable $ 1,500

Accrued Salaries $ 4,000

Accounts Payable $ 1,700

TOTAL LIABILITIES $ 7,200

NET ASSETS $ 5,600

TOTAL LIABILITIES AND NET ASSETS $ 12,800

Income Statement.

Income Statement presents the financial results of a business for a stated period especially one fiscal year. Income statement may be combined with other comprehensive information to form a statement of comprehensive income. It entails revenue and expenses and a result of either a loss or profit in both profit and non-profit making organizations. The income statement is also known as profit and loss account or P&L. The income statement of ABC Child Care Company is yet to realize large gains since it is a startup Company and with time, it will increase its value.

ABC Child Care Company

Income Statement

For Twelve Month Period Ending 31st Dec. 2015

Revenue:

Parent Fees $ 34,000

Fundraising $ 3,000

Foundation Grant $ 10,000

Government Funding $ 5,000

TOTAL REVENUE $ 52,000

Expenses:

Salaries $ 35,200

Taxes $ 1,500

Supplies $ 4,500

Repair and Maintenance $ 700

Advertising $ 500

Insurance $ 100

Rent $ 1,750

Telephone $ 250

Utilities $ 1,800

Food $ 4,500

TOTAL EXPENSE $ 50,800

NET GAIN $ 1,200

Sales Forecasts.Sales forecasts of ABC Company practically aim at advertising and marketing its services to realize quite a significant figure in its financial statements. The net gain in the Income Statement is expected to increase by 30% of the current net gain. The projected net gain will, therefore, be; (130/100) $1200

= $ 1560

The annual balance sheet total is expected to increase by 35% of the total assets which gives us

(135/100) $12,800

= $ 17280

The cash balance/ surplus in the cash flow statement is expected to increase by 32.5% of the current cash balance. That is, (132.5/100) $ 400

= $ 530

The forecasts can be realized by ensuring that the Companys activities run smoothly and also marketing of its services is enabled to win over more and clients into the Company.

Reference List

Penman, Stephen. H. (2012). Financial Statement Analysis and Securities Valuation. New York; NY McGraw-Hill.

Revsine. (2009).Financial Reporting and Analysis. Irwin; McGraw-Hill.

Costales, S.B. (1994). The Guide to Understanding Financial Statements. New York; McGraw-Hill.

White, Gerald I. (1998) The analysis and use of financial statements. New York; John Wiley.

Fraser, Lyn M. (2010).Understanding financial statements by Publication: New Delhi; PHI Learning.