This two-part project will focus on the financial aspects of your start up business. This project also includes the use of Excel spreadsheets containing financial data and required reports.

Before you begin, take this tutorial on financial statements.

In part I, using Microsoft Excel worksheets create 3 years of income statements, balance sheets, and cash flow statements.

In part 2, using Microsoft Word®, create a 3–4 page financial summary detailing your income statements, balance sheets, and cash flow statements.

When you are ready, submit your Microsoft Word Document and Excel file on the Dropbox page. *Note, include your name in the file name of each Assignment.

 

Financial summary

Strategy

Our strategy growth, development, and financial strength will be pivotal strategies to be utilized to build the company.  The long-term growth and success of the enterprise highly depend on the organization’s ability to develop the business through expansion into new markets, improving the quality of products and services offered as well as improve consumer service experience. These strategic imperatives will be supported by the entity’s commitment to innovation and operational excellence. The company is also committed to engaging with all levels of the workforce in the company throughout their employment.  This strategy is aimed at creating healthy, vibrant communities in which the entity conducts its business and in which the company employee can live and work.

G-10 Holding’s vision is aspiring to create a work environment where employees can grow and find freedom to fulfill their potential. However, this vision can only be achieved if the company builds a distinctive customer relationship by deeply focusing on both private and public entities that need bookkeeping and office management services and securing the market leadership in more sectors of the economy, states as well as integrated markets. Additionally, the company needs to put more emphasis on innovation and creativity to continually refresh its services and to make sure that it brings the most innovative and creative thinking to our client base.

Assets and liabilities

In the first year of business, the company will have $104,532,108.31, but it is estimated that the business will be growing at the rate of 26.38% every single year before the third year when the company will take a loan from the bank to expand its operations. Notably, the company will focus on investing in short-term investments such as research and innovations, machine and equipment as well as human resources rather than on long-term investments considering that the company is still new and needs all the cash available to finance all its daily operations. However, as the customer base increase each and every day, the company will continue hiring the best interest in the market to match the demand and needs of the customer which will eventually increase the inventory of the organization. Additionally, the company prefers to take long term debts to short-term debts because of the interest rate charged by banks as well as the repayment period.  Since it is a young business, it needs enough time to generate money to pay the interest.

Cash flow

Net cash inflow from the company operations will be increasing as the company grows and develops.  The net cash flow from operating activities from 2018 is $175,469,506.88 which will increase to $191,229,616.14 in 2019, and this represents 8.9% growth. A significant amount of this cash flow comes from long-term debts from financial institutions in the form of commercial paper and an increase in the account payable as the business strives to meet the demands of their customer at all costs. The company will focus on maintaining liquidity risk by making sure that they maintain adequate banking facilities as well as borrowing facilities by adequately monitoring and controlling projected and actual cash in the organization.

Finance and capital structure

The balance sheet at the end of the financial year July 2019, fixed capital amounted to $ 21,950,426.02 and $ 25,885,822.10 in 2020 which represents and increases.  Notably, the profit realized in the organization is equally distributed to the shareholders by their contribution to the startup capital.  Additionally, the profit distributed is determined on the basis of the organization’s equity accounts which are influenced or based on the accounting policies adopted by the company. However, there is a slight difference between the accounting policies adopted by the organization with international financial reporting standards on the basis if treatment of annuities and pension schemes.

Basis of accounting

The financial statement of the company has been prepared in agreement with the international financial reporting standards as adopted by the European Union for the years ended July 2018, 2019and 2020.  The body will be required to approve these financial statements as an indication or a sign that the company has reasonable resources to continue in operations existence for the foreseeable future. Additionally, revenue indicated in these statements represents the amount of funds or equivalents that are recoverable from clients for professional services offered within the financial year.  Additionally, revenue has been recorded immediately after the completion of a contract and after being realized.  On the other side, expenses have been recorded once they have been estimated to make sure that the company is ready and stable to finance its operations.

Taxes

The current tax expenses in the entity are based on taxable profits.  However, this taxable profit excludes items of income or expense that are taxable or deductible while at the same time excluding items that are never taxable or deductible.

Property, plant, and equipment

All the company properties, plants, and equipment are recorded cost less accumulated depreciation or any other impairment loss. On the other hand, loss or profit gained from disposing of an asset recorded as income while Depreciation is provided to write off the cost less estimated residual property

 

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