This question is about practical project on sale of high-quality men's, women's, and kids' clothes, dresses, bags, and shoes.

CHAPTER FOUR: The financial analysis:

Describe the course of financial action an entrepreneur uses in order to achieve business objectives.

This will reveal

1. Profitability

2. Capital requirements

3. Sources of capital etc.

• Financial information that will be needed to assertion feasibility will be generated in projected income statement, balance sheet and cash-in-flow statement.

• This information is based on marketing information available each expense item should be identified and given on a monthly basis for the year.

• Estimates of the cash flow show the ability of the new venture show

• The cash flow forecast should identify the starting capital, spectate accounts receivable and other cash receipts and all disbursements on a monthly basis for the whole year.

• Current balance sheet figures will provide financial position of the business at any particular time.
• Identify the assets of the business, the liabilities and the investment made by the owner and the other partners.
• Presents the entrepreneur best estimates of future opportunities in quantitative terms i.e. figures.
• The financial analysis provides a picture of where the venture stands today and in the future. Financial information is critical to venture funding. Minimally, you should include a balance sheet which shows the worth of the business. Current assets include anything that can be converted to cash within a year and fixed assets entail such things as buildings and equipment. Liabilities are divided into current liabilities (short term bills such as inventory, salaries, etc.) and long-term debt (such as mortgage, etc.). The difference between the assets and liabilities equals net worth. Statements help you track and analyze financial information. A second essential element is a profit and loss statement. Any investor wants to know where the money has gone and where you expect the money to go in the future. You should also include cash flow projections which inform potential investors
• Even when you understand how they work, financial statements and ratios can be complex.
• You need to make this information easy to digest. Graphic representations (pie charts, scatter diagrams, histograms) are extremely viable method of

communicating information. Provide financial statements for the business for the last three years e.g. Profit and loss, Balance sheet, Cash flow statement.

• Calculate profitability and performance ratios for the business