Week's topic that I chose: The Financials - Sales Estimation, Break-even Point, and Income Statement.

The purpose of the reections assignment is to help you think about the topic of the weekls} and to apply the important concepts to business situations. Also, it gives you an opportunity to explore the understanding of the integration of the Christian faith and business. The typical length of this assignment would be 2-3 pages, single-spaced. To start, choose a topic week and read all the readings for that week (click on any week in the course schedule menu). Since this is a reection assignment, a mere summary of the readings is not enough for the write-up. Incorporate your ideas and opinions in sentences and paragraphs. Try to weave your thoughts together, but don't force-fit by trying to connect everything from all the resources. In addition, you don't have to restrict yourself to the readings. You can explore additional information and sources (i.e. annual reports, nancial reports, analyst reports, manager statements, articles. content from courses you've taken before. news articles. TED talks, etc.) to develop your opinions in the reection. Accordingly. write the class prep assignment in terms of the three components: Part 1 {1-2 paragraphs) Insightful highlights of the readings that you nd interesting. Note that this is not a mere summary. but what you found interesting. innovative, insightful, or perplexing from the weekly readings. Part 2 {3-4 paragraphs) An actual synthesis of the concepts from the readings, and an application of the concepts to the business cases. This part should include your thoughts interacting with the week's discussion questions (posted in the week's link in the course schedule}. Along with, or in addition to, Make sure that you include your answer to at least2 of the Faith Integration questions listed in a particular week, based on Van Duzer's book, Why Business Matters to God. Note that while you want to focus on the particular week, you need not limit yourself to that week in terms of the synthesis and application of concepts, theories, and frameworks to a business case. In fact, businesses need to deal with many issues that interweave several concepts at once. Nevertheless. try to anchor your elaboration on the week's topic and dive deep rather than skimming the surface or simply summarizing the content. Note that while you want to focus on the particular week, you need not limit yourself to that week in terms of the synthesis and application of concepts, theories, and frameworks to a business case. In fact, businesses need to deal with many issues that interweave several concepts at once. Nevertheless. try to anchor your elaboration on the week's topic and dive deep rather than skimming the surface or simply summarizing the con tent. Part 3 {1-2 paragraphs) Any overall conclusions or insights you have gained from the readings and your synthesis. Any applications you can make to your current or future workplace. Any questions remaining. *Assessment: each reection will be assessed with the SBGE writing rubric i, , posted in the Files link on Canvas. 1. The Financials Financial projections are an essential component of any business plan. It is true that the worth of a business is not measured by nancial performance alone, especially in the case of a social venture. However, a business needs to be nancially viable if it is to generate sustainable prots for social purposes. That is why nancial projections have been described as \"the place where dreams meet reality." Preparing sound nancial projections will help you anticipate the cash you need to get your venture started, and will give you a yardstick to measure your performance. What do we mean by nancial projections? There are three fundamental questions of a nancial projection. o How do you project sales? [sales estimate} . How much prot/loss do you expect for the next 3 years (income statement) . Funding - what things do you need to start-up your business. how much do you need {funds}, and what are the sources of your funds? For the purpose of this course, as part of your Business Plan, you will include the Inoome Statement. However, please note that in order to construct an income statement you need to estimate your sales. 2. Sales estimation {projection}, Break-even Point, and Income Statement One of the most important aspects of nancials and the rst thing you need to dois to estimate sales in both units and total dollars. Why are these estimates so important? Because your proposed level of sales will determine the size and scope of your business: how many employees you'll have, how much equipment you'll need to buy, how much money you'll spend on advertising, how much money you'll need to borrow to get started, and so on. Moreover, spending time right now to estimate a reasonable level of sales will give you a head start on a much bigger jobcompleting the nancial section of your business plan. Before you get started, remember that your sales estimates will probably change as you make headway with the nancial planning process, but that's okay. Watch the screen cast below for a more detailed explanation. Another thing to consider, given the price point of your products and services, is guring out how many unites of products! services you need to sell to cover your costs at the bear minimum. The break-even point gives you an idea of projecting your business operations, because it tells you that you would need to either make effort to sell more, or cut oosts to cover your expenses. Watch the screen cast below for a more detailed explanation. Income Statement A big part of the nancial aspect of a business is estimating and keeping track of the the revenue and expenses of a business. This will give us a sense of whether the business will be in a healthy state to gain net prot. It will also give us a sense of where to invest in depending on where "money goes" in the business. We will cover the basics of the Income Statement, one of the basic statements in accounting. BUS 2000 Preparing Financial Projections INTRODUCTION Financial projections are an essential component of any business plan. It is true that the worth of a business is not measured by financial performance alone, especially in the case of a social venture. However, a business needs to be financially viable if it is to generate sustainable profits for social purposes. That is why financial projections have been described as "the place where dreams meet reality." Preparing sound financial projections will help you anticipate the cash you need to get your venture started, and will give you a yardstick to measure your performance. In the sections below, we will discuss why you should prepare financial projections, describe what kind of projections you need to make, and suggest tips on how to go about the task Why should I prepare financial projections? There are several reasons why business plans include financial projections: They allow you to estimate the cash you will need to start the business and during the early stage before your business becomes profitable. . The process of preparing projections will force you to think systematically about the details of your operations and the resources you will need. . They will allow you to raise money by demonstrating to investors, donors, or lenders that your venture is financially viable.t They will giye you an initial set of benchmarks against which you can measure your financial performance during the early months of ope ration. What do we mean by nancial projections? There are three fundamental questions of a financial projection. 1. How do you project sales? [sales estimate] 2. How much protfloss do you expect for the next 3 years {income statement] 3. Funding what things do you need to startup your business, how much do you need [funds], and what are the sources of your funds? For the purpose of this course, as part of your Business Plan, you will include the Income Statement. However, please note that in order to construct an income statement you need estimate your sales and consider how you will receive funding for your business project. THE ESTIMATING PROCESS Preparing your financial projections can seem an overwhelming task. How can you possibly come up with future numbers for all these categories when you haven't even started your business? But it can be done, as countless business owners have shown. As with most problems, it helps to break the task into smaller pieces. For example, you probably already have an idea how much you will charge for the goods or services you are selling. By estimating the number of items you will sell and multiplying by the sales price, you'll have a projection for sales revenue. If you are unsure of the price to charge, you can research what competitors are charging, either in person or using the Internet. This same approach also applies to the cost of donating services or products in a social venture. Similarly, wages are a significant expense in virtually all businesses. Start by estimating how many employees you will need at various times. Most of us have an idea of the pay scale for various types of job, so you can estimate an hourly or annual wage for each employee. Apply a percentage for employee benefits (you will need to benchmark the norm for your industry) and you'll have an estimate of your wage expense. Don't become paralyzed by uncertainty. Every number you put down will be a guess and the actual future number will almost certainly be different. Your goal is simply to make the best educated guess that you can. Remember that any estimate is better than none. As you go through the process, document your assumptions for each item. You may need to explain or justify your assumptions to investors (or judges in the competition). It may be useful to show the four or five key assumptions in a small section under your financial statements. You will find that making financial projections is an iterative process. First, although you probably have a general idea how your business will operate, you'll find the process of costing out your operations will force you to become more specific. That in turn might change your. note an '[Erl'l'llI'IIIIIIIIE'HI The projected income statement, a forecast of your earnings and expenses, can go by several names, and this can be confusing to newcomers. An income statement is sometimes called a "P 8: L,\" shorthand for "profit and loss statement\". When the income statement is a forecast for a future period, it is sometimes called a "budget\" or an "operating budget.\" In some companies, the financial projections for the coming year are called a "profit plan.\"r All of these terms refer to essentially the same thing a forecast of your earnings and expenses for the year ahead. PROJECTED INCOME STATEMENT "four projected income statement shows the amounts you expect to earn and your expected expenses during a future period, usually for a month or year. Exhibit B shows a detailed income statement. Not all of these categories will apply to eyery business. 'r'ou may wish to use this level of detail when planning your business, but show a more summarized yersion with fewer, combined expense categories in the summary financial statements in your business plan. Revenues shows the amount you expect to earn from sales during the period. As shown on exhibit B, most companies allow for a reduction due to items returned or for speci Fl"? ls. Grants and Donations shows amounts a nonprot organiiation might receiye to proyide funding for its work. Cost of goods sold reects your costs for the items you sell. In a retail business this would be the wholesale price you pay for the goods you sell. In a manufacturing business it includes your costs for the labor and materials to make the items. In a service business this line item may be zero. 3. Faith Integration . Read Van Duzer's bookr '"Why Business Matters to God" 0 Chapter 3 [In the End] . Please watch YouTube video of Van Duzer talking about Part 3: Redemption (19 minutesle' . Faith Integration questions [for individual write-up]: 0 Does the end of the biblical story make much difference to howyou live your life here and now? Why or why not? Do you think God would want it to make a bigger difference to you now? 0 Which perspectives are closest to your own: the views of the annihilists, the views of the adopters or the views of the agnostics? Why? 0 Use your imagination. Take some deep breaths and clear your mind of clutter (as much as possible). Now try to imagine what the fully consummated new creation will look and feel like. Remember that in Revelation the New Jerusalem comes to earth it is not in some far- away heaven. What work will you do? What will it feel like to do that work? 0 On page 98. Van Duzer quotes, "As R. Paul Stevens notes. even business activity may last and nd its place, purged of sin, in the new heaven and the new earth." What current business activity do you think will last and nd its place? Why and how? What implications would this have for you. personally