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Business Plan The Techniques

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Calculation of financial debt and interest. Cash Flow Statement. Year 2. Etc. ... fixed and variable costs. interest rate. exchange rate. etc. BPcons.xls - SENSIB!A1 ... – PowerPoint PPT presentation

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Title: Business Plan The Techniques


1
Business PlanThe Techniques
  • Our Case The Red Line
  • Saigon Hotel
  • Mission and Vision
  • SWOT Analysis
  • The Financial Plan Step by Step
  • Initial Balance Sheet
  • Year 1
  • Profit and Loss
  • Balance Sheet
  • Calculation of financial debt and interest
  • Cash Flow Statement
  • Year 2
  • Etc.

2
Hanoi Hotel Mission and Vision
  • What we are
  • A medium size high level hotel in the centre of
    HCMC
  • 130 rooms
  • Average income per night/room in 2003 80 US
  • Mission
  • We want to deliver excellent service to our
    business (40) and leisure (60) customers and
    want them to come back
  • What we want to become
  • Possibility to add 60 additional rooms
  • Vision
  • We want to become immediately after the Rex the
    reference hotel for people who want a unique
    experience and not the standard (high level)
    service provided by international chains

3
SWOT Analysis
4
Step 1 Initial Balance Sheet
  • last available figures for existing company
  • opening Balance Sheet for new venture
  • Liabilities only equity
  • Assets only cash

BPcons.xls - STEP1!A1
5
Step 1bis Simplified Balance Sheet
  • Calculation of Working Capital
  • R S - DSTop
  • Calculation of Capital Employed
  • FIX WC CASH

BPcons.xls - STEP1bis!B1
6
Step 2 Profit Loss Year 1
  • based on
  • PL of last year
  • Operational assumptions for year 1
  • Turnover
  • Margins (Cost of sales)
  • Costs of goods and services
  • Salaries and productivity of labor
  • Fixed assets table
  • depreciation
  • Balance Sheet of last year
  • calculation of interests on debt

BPcons.xls - STEP2!A48
7
Step 2bis Fixed assets depreciation
  • based on
  • Fixed assets at the end of last year
  • Depreciation rules
  • Capex of the year
  • Tangible
  • Intangible

BPcons.xls - STEP2bis!A111
8
Step 3 Balance Sheet Year 1
  • based on
  • Balance Sheet of Year 0
  • PL of Year 1
  • EAT DIV for EQ
  • Depreciation for FIX
  • Operational assumptions
  • Change in Working Capital
  • Duration of inventories
  • Duration of collection
  • Etc.
  • Capex for FIX
  • Financial assumptions
  • New LT debt
  • Capital increase for EQ
  • Reimbursed LT debt
  • Short term fin debt to balance

BPcons.xls - STEP3!A1
9
How to do to finance the company ?
  • Cash Flow from financing activities
  • First use the existing cash or credit lines
  • Second seek additional debt provided by banks
  • Duration should depend on needs but
  • Always seek long term to reduce the risks
  • Limits for the bankers
  • Future Cash flows
  • Cover of interest ratio must be respected
  • Cover of debt must be respected
  • Finally seek new capital provided by
    shareholders
  • Is it an interesting investment for them ?

10
Step 4 Cash flow statement Year 1
  • based on
  • Cash Flow from operations
  • PL of the year
  • EAT
  • Depreciation
  • Operational assumptions
  • Changes in components of WC
  • CF from investing activities
  • Fixed assets assumptions
  • Capital expenditures
  • Assets sales
  • CF from financing activities
  • Financial assumptions
  • New and reimbursment LT
  • Calculation short term debt
  • Sanity check the cash

BPcons.xls - STEP4!A173
11
Step 5 Profit Loss Year 2
  • based on
  • PL of Year 1
  • Operational assumptions for Year 2
  • Turnover
  • Margins (Cost of sales)
  • Costs of goods and services
  • Salaries and productivity of labor
  • Fixed assets table
  • depreciation
  • Balance Sheet of Year 1 2
  • calculation of interests on debt

BPcons.xls - STEP5!A48
12
Iterative Process
  • Step 5
  • PL for year 2
  • Step 6
  • Balance Sheet for year 2
  • Step 7
  • Cash flow statement for year 2
  • Step 8
  • PL for year 3
  • Steps 9
  • Balance Sheet for year 3
  • Step 10

13
How to build the Financial Plan
BPcons.xls - STEPfoll!A48
BPcons.xls - STEPfoll!A1
BPcons.xls - STEPfoll!A160
14
Sensibility studies
  • We can see immediately all the consequences of
    changing one assumption
  • occupancy rate or load factor
  • unit price
  • additional capital expenditures
  • more rooms, more planes, more shops
  • fixed and variable costs
  • interest rate
  • exchange rate
  • etc.

BPcons.xls - SENSIB!A1
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