FINANCIAL PLANNING

6.1 Start-Up Cost and Capital Expenditure

Financial management is one of the best ways for the business venture to track their
expenditures and profits in order to stay profitable and solvent. The objective of preparing
financial plan is to enable the company to provide relevant statement of the companys
business transaction. Capital expenditure is funds used by a company to acquire or upgrade
physical assets such as property, industrial building or equipments.

6.2 Financial Strategy

Our financial strategy to make sure that our company reaches high profit every
month. To fulfil it we have to plan wisely. We have to evaluate cash in and out of
company efficiently and always monitor our business flow. We also have to estimate
budgets for profits, performance in financial and cash flow of the business.

6.3 Financial Plan

START UP COST OF GOTS ENTERPRISE

Types of Fixed Assets Estimated Cost (RM) Estimated Economic

Life (years)

Administrative / Organisation
Land and Buliding 100,000 15
Computer 50,000 7
Vehicles 70,000 10
Office Equipment 7,000 5
Sales/ Marketing
Signboards 10,500 7
Billboards 16,000 2
Operations/ Technical
Machinery 500,000 15
Total 663,500
 WORKING CAPITAL OF GOTS ENTERPRISE
Pre- Operating & Working Capital Projections
Pre- Operating & Incorporation Costs ( one-off) RM
Development cost 70,000
Bussiness incorporation 2,000
Deposit ( rent, utilities, etc) 10,000
Other pre-operating & incorporation costs 7,500
Sales & Marketing Costs (monthly)
Salaries, Wages, EPF & SOCSO 7,000
Advertising 6,000
General & Administrative Costs ( monthly)
Rental office 3,000
Salaries, Wages, EPF & SOCSO 10,000
Operations & Technical Costs (monthly)
Purchase of Raw Materials/ Goods 30,000
Carriage Inwards 10,000
Salaries, Wages, EPF & SOCSO 10,000
Other expenditure (annually)
Others 50,000
Total Pre- Operations & Working Capital Expenditure 215,500

Annual Increase in Working Capital (if any ) %

Year 2 10%
Year 3 10%
Taxes Rates
Year 1 20%
Year 2 20%
Year 3 20%
MANUFACTURING COST AND PRO-FORMA BALANCE SHEET GOTS ENTERPRISE

GOTS ENTERPRISE
MANUFACTURING COST
Year 1 Year 2 Year 3

Materials
Current Year Purchases 539,748 666,338 699,655
Closing Stock 277 300 330
Materials Used 540,025 666,638 699,985
Carriage Inwards & Duties 12,000 12,200 15,000
552,025 678,838 714,985
Salaries, EPF & SOCSO 24,000 25,200 26,460
Factory Overhead
Depreciation on Fixed Assets (Operation) 2,375 2,375 2,375
Plant Utilities 12,000 12,800 13,000
Machine Maintenance 6,000 7,300 8,630
Petrol 3,000 3,450 3,670
Total Factory Overhead 53,975 56,555 59,264
Cost of Goods Manufactured 599,400 729,963 769,120
GOTS ENTERPRISE
PRO FORMA INCOME STATEMENT
Year 1 Year 2 Year 3
Sales 1,398,400 1,649,100 1,798,800
Less: Cost of Goods Sold
Opening Stock - Finished Goods - 45 60
Cost of Goods Manufactured 599,400 729,963 769,120
less: Closing Stock - Finished Goods 60 60 60
599,340 729,948 769,120
Gross Profit 799,060 919,152 1,029,680

Less: Expenses
Administrative Expenses 20,000 25,000 40,000
Marketing Expenses 10,000 13,590 33,075
Registration & Licences 850 - -
Insurance & Road Tax 480 480 480
Other Expenses 1,600 1,600 1,600
Interest on Hire-Purchase - - -
Interest on Loan 2,943 2,649 2,355
Depreciation on Fixed Assets 1,160 1,160 1,160

Total Expenses 37,033 44,479 78,670

Net Profit Before Tax 762,027 874,673 951,010
Tax 16% 121,924 139,948 152,162
Net Profit After Tax 640,102 734,725 798,849
Accumulated Net Profit 640,102 1,374,828 2,173,676