Key Points Of Financial Planning

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Based on these calculations the business is in a stable financial state and the company can make all the payments on its own for the next three months, bankruptcy is very unlikely at this stage. B) The importance of financial planning: For a business to succeed it is very important to have a financial plan. For that reason, ABC LTD should have a satisfactory financial plan to be well equipped for future projects, it is necessary for the business. There are some crucial points of financial planning that influence the success of a business. Below are some points which will help in considering ABC LTD financial planning: Capital: With the assistance of financial planning, the business can boost a well built foundation to make…show more content…
Investment: Is very significant in the running of the business. The financial planning will examine the funding that will be able to help in setting up the business. having more investors increases finance and the business will grow. Furthermore, financial planning will examine the total accountability,debts occurring over a long time and short time. So, this will give the implication of when and how to make a payment of the interest for the shareholders. TASK 3 Q1 Price= cost + profit margin Total cost = £350.000 units manufactured= 500 units cost/units = £350.000/500units = £650.00 Price= cost + profit margin (35%) = 650 x 35/100 = 227.5 = 650 + 227.5 Price = £878.00 per unit b) Capital employed = £100.000 Return on capital employed = (25%) = 100.000 x 25/100 = 25.000 R.O.C.E per unit = 25.000/500 = £50.00 per unit = £650 + £50 = £700 per unit I think that following option A is most suitable because its cost can maximise the profit margin needed for the company in order to be a success. TASK 4 Q1 Ai) Payback period for Germany= 3years +10/15x12 =3years + 8months ( this is the amount of time required to recover the initial payment for the
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