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Produce a financial proposal and present a sound business case to secure the required financial resources.

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We are setting up the plastic manufacturing unit. For this purpose we have made a comprehensive financial plan of the plant located at Haiti. This comprise of the financial statements, break even analysis and sensitivity analysis. Our initial investments are at $5mn, 80% for capital expenditure and 20% for working capital purposes. Our assumption of production levels are at 370 tons. We have forecasted the revenues; it has been planned as per the market environment, current and expected economic conditions. The basis of its financial plan is solid growth, increase in revenues, and controlled expenses. Our profitability is more than $600000 and the Balance sheet size is more than $10 mn. The operating cash flow is positive and it's more than $1.1 mn. The break even point is at 270 tons. We will be constantly monitoring the flow of revenue to the company as well as the expense requirements that deplete the company of its cash. The organization will always try to improve the ratio of revenue and expenses to generate a healthier bottom line in addition to a more healthy cash base. We believe that our organization's long-term prospects for a very successful company are excellent. Our sensitivity analysis shows that at lesser markup percentages also we are profitable. Sound Planning is the first step of the success of the business. It will act as a guidance and road map for the organization. Our business is based on two important attributes:

1. Impeccable management that has a knack of choosing the correct product and the premium service at the right time with a finesse of knowing what its total market is and how to acquire and maintain a greater share of that market.

2. Providing an excellent product or service that is not only well accepted now but also whose acceptance and use will continue to grow at an accelerated rate into the future.

For this purpose we have made a comprehensive financial plan comprising the financial statements, break even analysis and sensitivity analysis. Financial statements are useful tools for evaluating both profitability and liquidity. Used separately, or in combination, the income statement and balance sheet help interested parties to measure a company's current financial performance, and to forecast its profit and cash flow potential. Accountants summarize this information in a balance sheet, income statement, and statement of cash flows. The statement of cash flows provides information about cash receipts and cash payments of an entity during a period. A secondary objective is to provide information about the operating investing and financing activities of the entity during the period. This will act as a road map for the organization. The benefits of financial plan are:
? Will help maximize efficiency and minimize waste.
? To facilitate management and control.
? Effectiveness and efficiency of operations include the use of the entity's resources.
? Help in ...

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Key Principles of Financial Managements

You have recently been appointed as the senior management accountant in a large listed company, XYZ plc which has divisions in a number of countries and trades globally.

You have examined the financial management procedures of XYZ plc and have had discussions with the board of directors of the company. In doing so you have identified the following key areas which need to be addressed:

1. There is little understanding of the role and nature of financial management amongst the other directors and senior managers and you feel that this limits their ability to make sound decisions regarding shareholder wealth maximisation.

2. There appears to be no strategy behind the management of the sources of capital in the company and little understanding of the need to manage the cost of capital.

3. Large projects seem to be undertaken with little or no formal investment appraisal.

You are required to produce a report to the board of directors explaining the key principles and concepts in the above areas and discuss models and techniques by which the company may improve performance.

The report should include critical evaluation of the models and concepts proposed outlining their merits and limitations. You may incorporate logical assumptions with regard to the company and use numerical examples to illustrate the models and concepts that you propose to adopt.

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