Rhossili Town Development - Financial Forecasting - Coursework Example

? RHOSSILI TOWN DEVELOPMENT PROJECT BUSINESS PLAN: FINANCIAL FORECASTING and Rhossili Town Development Project Business plan Cash Flow Forecast According to Bangs (2002) the forecasted cash flow will provide an estimate of what the project is expected to earn as cash receipts and to spend as cash payment. The forecasted cash flow shows the cash that is expected to be projected into business for a given period of time. The second part of the cash flow forecast shoes the amount of cash that is expected to be disbursed within that time. The third part is what shows the balance of the two. This project will be funded by the state. The source of that income will therefore, be the government and other partners of the state. The expected income to be generated by this project will be emanating from the various businesses that are included in the Rhossili Town. This includes the revenue from the people visiting the amusement park, revenue from visitors visiting the beach park, income from the fee charged to investors or private firm and the fee charged on the airline users (Laurence, 2013). The cash disbursement will be made on various projects. This includes advertisement. Advertisement will be done using the electronic media, the newspaper, the local Wales and English magazines and internet. The construction of the phase one development of the Central Square in town will cost approximately 10 million dollars. The revitalization of the Town Airport will cost approximately 50 million dollars. The development of the phase one of the Amusement Theme Park will cost 15 million dollars. The Redesigning of the existing Beach Park will cost 5 million dollars. The setting up of the dual transport system will cost 250 million dollars (Laurence, 2013). CASH FLOW FORECAST In Millions YEARS 2014 2015 2016 2017 2018 A Cash Brought Forward 0 16.2 11.9 7.3 3.3 B Projected Receipts Revenue from visitors 0.5 0.5 2 2.5 3.5 Fee on private investors 1 0.5 0.5 0.5 0.5 Fee from the malls 0.5 0.5 0.7 0.8 0.8 Charges on airline users 0.2 0.2 0.2 0.2 0.2 State Funds 100 75 62 51 51 Total Receipts 102.2 76.7 65.4 55 56 C Projected Disbursements Central Square Development 5 5 0 0 0 Airport Revitalization 10 10 5 0 0 Amusement Park Development 5 5 5 0 0 Redesigning Existing Beach 5 0 0 0 0 Dual Transport System 50 50 50 50 50 Advertisement 2 2 1 1 1 Airport Maintenance Charges 3 3 2 2 1 Wages 6 6 7 6 6 Total Outgoings 86 81 70 59 58 Monthly Net Cash flow S/D 16.2 -4.3 -4.6 -4 -2 Closing Bank Balance 16.2 11.9 7.3 3.3 1.3 Projected Profit and Loss Statement This forecast measure the performance of a business in a given period of time. The forecast shows the amount of money that is expected as revenue for a period of time, for instance one year or month. It also shows the amount of money that is expected as expenditure for the given period of time. The difference between the two amounts is either profit or loss depending on the amount that is bigger. If the revenue exceeds the expenses, the resulting amount is profit. If expenses are higher that revenue, the resulting amount is a loss. This forecast summarizes the business or projects transactions in a given time frame, usually one year (Ward, 2013). PROJECTED PROFIT AND LOSS In Millions 2014 2015 2016 2017 2018 Years Projected Revenue Revenue Beach services 5 5 6 8 10 Fee on private investors 20 20 20 20 20 Fee on the malls 25 25 30 30 30 Charges on airline users 0.2 0.2 0.2 0.2 0.2 Revenue from park services 25 25 25 25 25 Revenue from rental shops 10 15 20 18 22 Revenue from transport services 8 8 6 8 7.5 Ending Cash and other revenue 20 21.5 26.6 45 65 Total Revenue 113.2 119.7 133.8 154.2 179.7 Projected Expenses Direct Costs Central Square Development 5 5 0 0 0 Airport Revitalization 10 10 5 0 0 Amusement Park Development 5 5 5 0 0 Redesigning Existing Beach 5 0 0 0 0 Dual Transport System 50 50 50 50 50 Advertisement 2 2 1 1 1 Airport Maintenance Charges 3 3 2 2 1 Wages 6 6 7 6 6 General and Administration 0.2 0.1 0.1 0.1 0.1 Utilities 0.2 0.2 0.2 0.2 0.2 Insurance 0.6 0.4 0.4 0.4 0.4 Total Expenses 87 81.7 70.7 63.7 58.7 Net Income Before Taxes 26.2 38 63.1 90.5 121 Income Taxes 7.86 11.4 18.93 27.15 36.3 Net Income 18.34 26.6 44.17 63.35 84.7 Projected Balance Sheet This statement shows the current financial position of a firm or organization. It depicts what the firm owes as liabilities and what the firm owns as assets. It is also inclusive of the capital the owners have contributed (Hoeksema, 2013). The balance sheet below depicts all the assets that the Rhossili Town Council owns inclusive of the projects that the council is intending to develop in the coming five years. PROJECTED BALANCE SHEET In Millions Years 2014 2015 2016 2017 2018 Current Assets Office Supplies 0.5 0.5 0.5 0.6 0.6 Cash in the bank 16.2 11.9 7.3 3.3 1.3 Accounts receivables 15.5 15 12.5 20.3 20.5 Prepaid Insurance 1 1 1 1 1 Total Current Assets 33.2 28.4 21.3 25.2 23.4 Fixed Assets Office Furniture 2 2 2 2 2 Computer Equipment 2.5 2.5 2.5 2.5 2.5 Land 50 60 80 100 150 Beach Park 100 120 150 200 250 Amusement Park 100 110 130 150 180 Air Port 500 550 600 800 900 Depreciation 3 6 10 15 20 Total Fixed Assets 757.5 850.5 974.5 1270 1504.5 Total Assets 790.7 878.9 995.8 1295 1527.9 Liabilities Accounts payable 130.36 140 125 110 200 Taxes Payable 22 25 28 31 34 Long term loans 100 57.3 48.63 130.4 109.2 Total Liabilities 252.36 222.3 201.63 271.4 343.2 Equity Current Earnings 20 80 150 260 300 Retained Earnings 18.34 26.6 44.17 63.35 84.7 Government capital 500 550 600 700 800 Total equity 538.34 656.6 794.17 1023 1184.7 Total Liabilities and Equity 790.7 878.9 995.8 1295 1527.9 Bibliography Bangs, D., H., 2002. Business Planning Guide. Berkshire: Kaplan Publishing. Hoeksema, A., 2013. How to Create a Projected Balance Sheet for a start up. Retrieved from http://www.projectionhub.com/financial-projection-blog/how-to-create-a-projected-balance-sheet-for-a-startup/ Laurence, B., 2013. Sample Cash Flow Statement. Retrieved from http://www.nolo.com/legal-encyclopedia/free-books/small-business-book/chapter14-3.html Ward, S., 2013. Writing the Business Plan: Section 8. Retrieved from http://sbinfocanada.about.com/cs/businessplans/a/bizplanfinanc_2.htm Read More