Lesson 5: Financial Plan

Question 1

includes various financial statements that show where your company currently stands and where it expects to be in the near future

Answer 1

financial part of a business plan

Question 2

It is considered to be one of the most difficult parts of the business plan;
* It speaks of the product or service performance;
* Provides the entrepreneur financial data such as liquidity, cash flow, and financial standing of
the business; and
* It is a basis of entrepreneurs for decision making on financial matters such as offering credit
terms to customers, applying for a bank loan, and expanding or selling the business.

Answer 2

characteristics of a financial plan

Question 3

In the financial there are financial statements that the entrepreneur should prepare to be able to see
the full performance of his business financially speaking.

Answer 3

Remember this :D

Question 4

This the money that will be allocated by the entrepreneur to establish a business venture.

Answer 4

Capital

Question 5

Source of capital

Answer 5

• Personal savings of entrepreneur
• Borrow from families or friends
• Look for interested investors or stakeholders
• Borrow from banks/lending institutions

Question 6

What do lending institutions require when borrowing?

Answer 6

Collateral

Question 7

Refers to a high value asset that is submitted by the business to the bank or lending institution when applying for a load and will be subject for repossession if the business defaults

Answer 7

Collateral definition

Question 8

Revenue is considered deferred when

Answer 8

the product or service has not yet been delivered or
sold but the customer already paid in advance

Question 9

Illustrates the total amount of income a business generates by the sale of its goods or services.

Answer 9

Revenue

Question 10

Factors affecting estimation of Revenue:

Answer 10

• economy of the country
• primary target markets
  Entrepreneur should check both of them

Question 11

Entrepreneur must devise this. It is a chart that details the relevant data both direct and indirect competitors and how these factors affect profitability

Answer 11

competitive profile matrix

Question 12

these are those that offer exactly the same product/ product lines or services as the entrepreneur

Answer 12

Direct competitors
(ex: Jollibee and Mcdo)

Question 13

are those that do not offer exactly the same products or services but influence or affect the entrepreneur’s market share

Answer 13

Indirect competitors
(ex: Starbucks and Mcdo)

Question 14

True or False:
In some cases, the entrepreneur can also enter a market with no competition

Answer 14

True

Question 15

a concept in business that allows companies to determine how much revenue they have collected based on the amount of material they sell or the number of services they provide

Answer 15

Gross revenue (gross sales)

Question 16

Formula of Gross revenue

Answer 16

Gross revenue = No. of items sold x price of the item

Question 17

According to Hayes (2020) it is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Answer 17

gross profit

Question 18

Formula of gross profit

Answer 18

Gross profit = gross revenue – cost of sales

Question 19

They are reports that summarize important financial
accounting information about your business.

Answer 19

Financial statements

Question 20

There are three main types of financial statements:

Answer 20

the balance sheet, income statement, and cash flow statement

Question 21

It is a core financial statement that describes the financial position of the business

Answer 21

balance sheet

Question 22

A balance sheet is composed of three elements:

Answer 22

Assets
Liabilities
Equity/
Capital

Question 23

Represents the resources of the business that are expected to have future economic value

Answer 23

Assets

Question 24

represent all the assets of a company that are expected to be conveniently sold, consumed, used, or exhausted through standard business operations with one year

Answer 24

Current assets

Question 25

an asset that is not expected to turn to cash within one year of date shown on a company's balance sheet

Answer 25

Non-current Assets

Question 26

These are what the business owes to another person, a financial institution, or any creditor

Answer 26

Liabilities

Question 27

a company's short-term financial obligations that are due within one year or within a normal operating cycle

Answer 27

Current Liabilities

Question 28

These liabilities have obligations that become due beyond twelve months in the future, as opposed to current liabilities which are short-term debts with maturity dates within the following twelve-month period.

Answer 28

Non-current Liabilities

Question 29

This is the funds allocated by the entrepreneur to run the business

Answer 29

Equity/ Capital

Question 30

Accounting formula:

Answer 30

ASSETS = LIABILITIES + OWNER’S EQUITY

Question 31

Also known as the profit and loss statement or the statement primarily focuses on company’s revenues and expenses during a particular period.

Answer 31

Income Statement

Question 32

A financial statement that details the computation of net revenue by deducting cost of sales, expenses and taxes from the gross revenues generated.

Answer 32

Income Statement