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Business Venturing

Milestone Schedule

The major objectives of the organization are as follows:

  • To achieve maximum sales revenue and thereby raise the profitability of the organization.
  • To increase the wealth of the shareholders by providing them with attractive returns.
  • To ensure effective and efficient development of the product.
  • To increase the market share of the organization in the industry.

Milestone

Start date

End date

Completion of concept and product testing

1-August

17-August

Completion of prototype

18-August

31-August

First financing

1-September

15-September

Completion of initial plant tests

16-September

28-September

Market testing

1-October

5-October

Production start-up

7-October

15-October

Bellwether sale

16-October

25-October

First competitive action

30-October

6-November

First redesign or redirection

10-November

15-November

First significant price change

20-November

30-November

Milestones help in establishing plans into practical terms with deadlines and responsibilities of the management. Milestones are used to facilitate real management as this marks the major events that are going to take place in the organization. Milestone planning help in avoiding expensive anticipating errors and provides logical milestones for evaluating and learning. It helps in replanning the entire structure on the basis of updated information.

The Core Financials

Capital expenditure budget

Capital Expenditure Budget

 

2021 (Amounts in $)

   

Expenditure list

January

February

March

April

May

June

July

August

September

October

November

December

Total

2022

 

IT and Technology

5000

5100

5202

5306

5412

5520

5631

5743

5858

5975

6095

6217

67060

75000

 

Showroom maintenance

10000

10200

10404

10612

10824

11041

11262

11487

11717

11951

12190

12434

134121

140000

 

Expansionary

12700

12954

13213

13477

13747

14022

14302

14588

14880

15178

15481

15791

170334

300000

 

Goodwill

8000

8160

8323

8490

8659

8833

9009

9189

9373

9561

9752

9947

107297

110000

 

Intangible assets

4000

4080

4162

4245

4330

4416

4505

4595

4687

4780

4876

4973

53648

50000

 

Property, plant and equipment

11000

11220

11444

11673

11907

12145

12388

12636

12888

13146

13409

13677

147533

300000

 

Deferred tax assets

2000

2040

2081

2122

2165

2208

2252

2297

2343

2390

2438

2487

26824

25000

 

Trade and other receivables

4000

4080

4162

4245

4330

4416

4505

4595

4687

4780

4876

4973

53648

40000

 

Total

56700

57834

58991

60170

61374

62601

63853

65130

66433

67762

69117

70499

760465

1040000

 

Budgeted profit and loss statement

Budgeted profit and loss

Particulars

Amount

Revenue

500000

Less: Cost of sales

432000

Gross profit

68000

Operating expenses:

 

Exceptional administrative expenses

5000

Impairment of intangible assets

1000

Administrative expenses

25000

Depreciation and amortization

7000

Total operating expenses

38000

Operating profit/loss

30000

Finance costs

20000

Finance income

1000

Net finance cost

-19000

Profit/(loss) before taxation

11000

Taxation

3300

Profit/(loss) for financial period

7700

Budgeted cash flows

Budgeted cash flows

Particulars

Amount ($)

Cash flows from operating activities

 

Net profit

7700

Adjustments for:

 

Depreciation on property, plant and equipment

4000

Amortization on intangible assets

3000

Impairment of intangible assets

1000

Finance income

-1000

Finance costs

20000

Taxation

-3300

Cash generated from operations

31400

   

Cash flows from investing activities

 

Purchase of property, plant and equipment

-32000

Purchase of intangible assets

-4000

Net cash outflow from investing activities

-36000

   

Cash flows from financing activities

 

Net proceeds from listed bond issue

20000

Issue of shares

179478

Transaction costs

-700

Net cash outflow from financing activities

198778

   

Net increase in cash and cash equivalents

194178

Budgeted balance sheet

Budgeted balance sheet

ASSETS

Amount ($)

Non-current assets

 

Goodwill

107297

Intangible assets

53648

Property, plant and equipment

147533

Deferred tax assets

8000

Trade and other receivables

4000

 

320478

Current assets

 

Inventories

40000

Trade and other receivables

15000

Cash and cash equivalents

45000

 

100000

Total assets

420478

   

LIABILITIES

 

Current liabilities

 

Trade and other payables

130000

Current tax liabilities

2000

Derivative financial instruments

25000

Short term loan

4000

 

161000

Non-current liabilities

 

Trade and other payables

30000

Borrowings

20000

 

50000

Total liabilities

211000

Net assets

209478

   

Equity

 

Share capital

209478

Total equity

209478

Projected returns

Projected returns

Formulas

Ratio

Return on sales

Operating profit/Net sales

0.06

Return on total assets

EBIT/Total assets

0.02616

Return on shareholders' funds

Net income/shareholders' equity

0.03676

     

 

Risk profile

Break even analysis

 

Fixed cost/(Selling price per unit - Variable cost per unit)

50

Gearing ratio

 

Total debts/total equity

0.09547

Working capital ratio

 

Current assets/current liabilities

0.62111

Risk Profile

Risk versus return assessment

While undertaking any investment, both risk and return are involved. Various types of risks involve industry-specific risk, market risk, competitive risk, etc. Returns are expressed as income received from trading (Baron et al., 2019). Invested amount of money can bring a high amount of profits only when the investor is ready to accept high chances of losses, according to risk-return trade-off. The company as an investor must take into consideration the risk-return trade-off on every type of investment an across wide base of the portfolio while investing-related decisions.

When the company raises funds by issuing equity, then it must undertake suitable measures to generate a return for the shareholders (Stowell, 2017). Here, the return on equity is 0.03676 which indicates the ratio of net income meant for the shareholders. Return on sales ratio is calculated as 0.06 which shows the proportion of operating profit on net sales made by the firm. Return on total assets indicates the income generated from operations in relation to total assets.

Gearing ratio is 0.09547 which indicates the proportion of debt and equity used by the company. This ratio is quite small as the company has raised a major part of funds by issuing equity and fewer funds by acquiring borrowings.

The current ratio or working capital ratio is quite less which indicates the company’s current assets are not sufficient to pay off its short-term debt obligations.

References for Milestone Schedule and Core Financial of GPS Project

Baron, M., Brogaard, J., Hagströmer, B., & Kirilenko, A. (2019). Risk and return in high-frequency trading. Journal of Financial and Quantitative Analysis54(3), 993-1024.

Stowell, D. P. (2017). Investment banks, hedge funds, and private equity. Academic Press.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Management Assignment Help

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