BALANCE SHEET AND CASH FLOW STATEMENT

Purpose of Assignment:

The purpose of this assignment is for students to initiate and complete a comprehensive financial plan. The ultimate result will be a set of pro forma financial statements including an Income Statement, Balance Sheet, and Cash Flow Statement. The student will develop requisite assumptions about the dollar values to be budgeted. We will use the profit and loss statement you created in week four to create the first year balance sheet and cash flow statement for your company.

Assignment Steps:

Assume this is the first year of your business and use the week 4 profit and loss statement from year 1 for the purpose of creating your balance sheet and cash flow statement.

1. Create a properly formatted balance sheet addressing the instructor’s findings from previous class assignment by doing the following: Review the revenue and expense items based on comments made by the instructor, if any, from week four to best estimate realistic values for the balance sheet.
2. Create a properly formatted cash flow statement addressing the instructor’s findings from previous class assignment by doing the following: Review the revenue and expense items based on comments made by the instructor, if any, from week four to best estimate realistic values for the cash flow statement.
3. Conduct an internet search for or use an example located in the textbook as a template to create a properly formatted balance sheet and cash flow statement. I will also provide an example which was posted in class in week four and will repost in week five which shows all three financial statements with sample data and how they are connected and prepared.
4. Explain the order in which the financial statements are prepared and how they are connected.

Format assignment consistent with APA guidelines.

PEER RESPONSE 1

Reply to at least 2 of your classmates. Be constructive and professional in your responses.

Hello Professor & Class,

Discuss the top three sources for companies to borrow money from, for a new building purchase.

1. Crowdfunding – this is the method that is used to raise capital through resources like family, friends and possibly individual investors to finance a business
2. Angel Investors – a private investor who typically provides the financial backing for small businesses
3. Debt Capital – this is the debt that occurs when a business takes out a loan

What are the typical lending interest rates? The interest rate is typically based off the amount of loan that is being requested and can vary starting at 2% and above, though I do see 7% as a pretty standard rate.

What are the required collateral? Typically, collateral can be many things, the most common are houses, cars, any stock that’s available, bonds and current cash on hand

What are the repayment terms at each of the three sources?

1. Crowdfunding – You are not required to pay back money that is earned through crowdfunding, unless that is a personal agreement you made with a specific person
2. Angel Investors – they have ownership stake in the company, if the startup does well then you and th einvestor will both see the financial rewards. However, if the business is not successful typically an angel investor will not expect a pay back on the fund that were offered to you originally
3. Debt Capital – monthly payments that include interest, these terms are written within the agreement, you can pay more each month to reduce the time of th eloan or pay the minimum monthly fee until the loan is paid in full

Thank you,

Shannon Moore

PEER RESPONSE 2

Two of the the funding options that I am most familiar with are crowfunding and angel investors. Crowfunding is where you borrow a smaller amounts of money from large amounts of people. This takes the burden of having to have one or two donors funding a large amount. This manner of funding spreads the burden amongst a wider spread of people and not all on one or two.

Angel investors is another type of funding that I am familiar with.Angel investors are funders who have a high net worth that typically support start up companies. Angel investors usually do not require collateral, and the loan would not accumulate any interest which is very helpful to a start up company.

Another option would be a secure loan to cover the start up costs. A secured loan often requires collateral assets to protect the lender and ensure that the lender does not lose their investment. Secured loans can have a range of interest that would increase the financial obligation that the new business would have to pay.

WEEK 6 DISCUSSION

Respond to the following in a minimum of 175 words:

Organizational budgets assist businesses leaders with awareness of expenditures and managing resources. Businesses use a variety of budgets to measure their spending and develop effective strategies for maximizing their assets and revenues. Organizational budgets are generally designed to meet specific needs of the organization.

• Discuss the benefits that may be achieved by creating a business budget.
• Discuss the likely organizational problems that may arise from not creating a business budget.

Due Monday

Reply to at least 2 of your classmates. Be constructive and professional in your responses.

PEER RESPONSE 1

• Discuss the benefits that may be achieved by creating a business budget.

Having a business budeget can have mant benefits that can assit in a business. One example of a benefit of having a budget to allow for a firmm to have a set amount of revenue that will allow the establishement to have a resource that will allow a business to project the needs of a specific time period that will maintain daily operations and monitor the oppportunities in the marketplace that will allow for a business to increase its revenue through having cash on hand that will not intefere with the needs that are accounted for as far as what the compan will need in order to survive and what acess that is avaiable that will assist in achieving the needs and wants of the business . Another benefit of having a budget is to allow a firm to not overspend and be a more disiplined as well as efficeint in objectivity that will provide for more flexibility in order to make progress in the marketshare .