Finance Plan
Financial Analysis
Financial Outlook As stated in the executive summary, the GlobaLove financial goal is to achieve a 81% rate of return on the initial investment. In this situation, each shareholder will receive $24.43 dividend per share. In order to achieve the financial goal of 81% return on investment, GlobaLove must make a net profit of $733.00 by selling $1,800.00 worth of products. (Scenario 2) There are several factors which will affect the return on investment; fixed costs, variable costs, product pricing, and cost per unit. In this financial section of the business plan, these four factors will be discussed below in detail respectively. This finance section will include a break even analysis, product pricing analysis, profitability analysis, price sensitivity analysis, cash flow analysis, and forecasted scenario analysis. Two break even scenarios and four forecasted scenarios are created in case of any unexpected factors which will negatively impact the sales in the future. Scenario planning will also stabilize and secure the Company's financial status because different scenarios are created for different factors.
Table 1: Summary of Key Information about various scenarios
Scenarios
Return on Investment
Number of Units/Product and Weighted Avg. Price iWould Wristbands
Units to Sell Per Person iWould Units to Sell Per Person
Wristbands
1
1%
50@ $5.00
100@ $2.00
Approx 2 units
Approx 3 units
2
81%
200@ $5.00
400@ $2.00
Approx 7 units
Approx 13 units
3
111%
200@ $5.50
400@ $2.50
Approx 7 units
Approx13 units
4
201%
200@ $7.00
400@ $4.00
Approx 7 units
Approx 13 units
5
0%
40 @ $6.50
28 @ $3.43
Approx 2 units
Approx 1 units
6
0%
0
256@ $2.00
Approx 2 units
Approx 9 units (Refer to Appendix C for details and income statements)
The information generated from the finance section can potentially allow GlobaLove to become a successfully and financially stable venture. The projected
Financial Outlook As stated in the executive summary, the GlobaLove financial goal is to achieve a 81% rate of return on the initial investment. In this situation, each shareholder will receive $24.43 dividend per share. In order to achieve the financial goal of 81% return on investment, GlobaLove must make a net profit of $733.00 by selling $1,800.00 worth of products. (Scenario 2) There are several factors which will affect the return on investment; fixed costs, variable costs, product pricing, and cost per unit. In this financial section of the business plan, these four factors will be discussed below in detail respectively. This finance section will include a break even analysis, product pricing analysis, profitability analysis, price sensitivity analysis, cash flow analysis, and forecasted scenario analysis. Two break even scenarios and four forecasted scenarios are created in case of any unexpected factors which will negatively impact the sales in the future. Scenario planning will also stabilize and secure the Company's financial status because different scenarios are created for different factors.
Table 1: Summary of Key Information about various scenarios
Scenarios
Return on Investment
Number of Units/Product and Weighted Avg. Price iWould Wristbands
Units to Sell Per Person iWould Units to Sell Per Person
Wristbands
1
1%
50@ $5.00
100@ $2.00
Approx 2 units
Approx 3 units
2
81%
200@ $5.00
400@ $2.00
Approx 7 units
Approx 13 units
3
111%
200@ $5.50
400@ $2.50
Approx 7 units
Approx13 units
4
201%
200@ $7.00
400@ $4.00
Approx 7 units
Approx 13 units
5
0%
40 @ $6.50
28 @ $3.43
Approx 2 units
Approx 1 units
6
0%
0
256@ $2.00
Approx 2 units
Approx 9 units (Refer to Appendix C for details and income statements)
The information generated from the finance section can potentially allow GlobaLove to become a successfully and financially stable venture. The projected