The financial plan is the most important element of a business plan as it provides the necessary financial projections of the proposed business. The financial plan of Electro-Light provides an expected level of business in the first three years through projected income statements. The financial position of the company is highlighted through the pro-forma balance sheet of the first three years of operation.
The availability and use of cash flows in the business are also indicated through expected cash flows in the statement of cash flows. The financial statements have been prepared based on various assumptions on the expected growth, tax rate and sales criteria which are identified in the important assumptions section of this plan. The financial plan for Electro-Light also covers an analysis of the financial ratios. In order to present a better understanding of the feasibility of the project capital budgeting techniques such as Net Present Value, Internal Rate of Return, and payback period have also been applied on the free cash flows of the company. The long term plan of the company explains company expectations in the long run in terms of profitability, stability and growth.
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