“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem”

J.P. Getty, American business executive

If one component of a business plan attracts more attention that any other, this is certainly the financial plan. The financial plan is a forecast of the business financial statements and includes a minimum of a profit and loss account and a cashflow statement, over multiple years. Before we can generate a financial forecast we need to develop a good understanding of one-year financial statements.

Download Financial Statements and Valuation, an 80-page book-within-a-book covering the following chapters:

  • Chapter 4: Understanding Financial Statements
    • The Rationale behind Financial Statements
    • The Statement of Cashflow
    • The Profit and Loss Account
    • The Balance Sheet
    • Key Ratios
    • Generating a Financial Statement Forecast
  • Chapter 5: Valuing Businesses
    • A Holistic View on Value and Valuation
    • ‘Multiples’ Valuation based on Key P&L Figures
    • The Net Present Value (NPV)
    • The Economic Value Added (EVA®)
    • The NPV Terminal value, or the Multiples Method Revisited
    • Estimating the Weighted Average Cost of Capital (WACC)
    • Estimating the Cost of Debt
    • Estimating the Cost of Equity
    • Don’t Use the Internal Rate of Return (IRR)
  • Chapter 6: Checklist of common pitfalls



This content is for Business Plan Starter and Business Plan Advanced members only.
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