IV. The
financial study
at the profile
level
Unit Objective:
The student will formulate financial
proposals for business ideas
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to project the operational behavior
of the business idea
Market Research at profile level
Budget of
capital and financing
sources
Identify the
structure of the
budget of capital
and its process of
elaboration.
Identify sources of
finance a Projects.
Master Budget
Recognize the
structure of the
master budget
and its process of
elaboration.
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Financial states
Projection
Financial states
Analysis
Recognize the
process of
elaboration of
states financial.
Describe the
process of
elaboration of
financial
statements
proforma.
Define the
concept of
analysis and
interpretationof
financial
statements.
Describe the
methods of
financial state
analysis.
Capital Budgeting
The capital budgeting process begins with
defining the strategy and goals of the company to
determine which business area (s) will
participate.
Once the strategy has been defined, it is time to generate and analyze the ideas
about probable investment projects, and then obtain the relevant information
for the idea or ideas that are considered convenient. Finally, the project must be
financially evaluated and the decision made on the convenience of carrying it
out.
What is Capital
Budgeting?
Capital budget as the process of planning and
managing the long-term investments of the
company. Through this process, those responsible
for allocating resources try to identify, develop and
evaluate investment opportunities that can be
profitable for the company.
When allocating resources to a project,
they can be used to purchase fixed
assets, intangible assets, working capital
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1. Fixed
assets
It refers to all types of assets whose purpose is to
provide the necessary conditions for the company to
carry out its activities.
They share characteristics that are tangible, are used
throughout the life of the project and some of them
depreciate over time.
Some of its components are:
Ground
Machinery and equipment
Transport equipment
Computer equipment
Buildings
Tools
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2. Intangible
assets
These investments are made in intangible goods and
services that are essential to the project or company,
but are not directly involved in production.
As they are intangible, unlike fixed investments, they are
subject to amortization and are recovered in the long term.
Installation costs
Organization and legal constitution of the company.
Payment of permits or fees required by federal, state or
municipal authorities.
Patents, licenses or franchises
Previous studies required such as: mechanical, topographic,
surveys, market research, pre-investment studies, on water
quality.
Payments made in advance such as: insurance premiums,
rents paid in advance.
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3. Working
capital
It constitutes the set of resources necessary, in the
form of current assets, for the normal operation of the
project during a productive cycle, for a specific
capacity and sizes.
Some of its components are:
Raw materials Inventories
Products in process and
finished
Accounts Receivable and
Payable
Cash to cover contingencies
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3. Working capital Budget
TOTAL BUDGET
Sources of Finance
If you want to be successful in business, it is
crucial to determine when, where, and how to
obtain the funds you need.
Corporations often need to raise external funding, or capital, in order to expand
their businesses into new markets or locations, to invest in research &
development, or to fend off the competition.
Sources of Finance
Sources of capital are the most explorable area
especially for the entrepreneurs who are about to
start a new business. It is perhaps the toughest part
of all the efforts. There are various capital sources
There are various capital sources, we
can classify on:
INTERNAL AND EXTERNAL
https://www.youtube.com/watch?v=c8hIwQ5xFY8&feature=emb_logo
What is Master
Budget?
The master budget is a comprehensive financial
planning document. It usually includes all of the
lower-level budgets within the operating budget and
the financial budget.
The budget committee usually develops the master
budget for each year, guided by the budget director,
who is usually the controller of the company. They
usually plan the operating budgets first since
information from the operating budgets is needed for
the financial budgets.
What Does Master Budget Mean?
The master budget is basically management’s strategic plan for the future of the company.
Every aspect of the company operations is charted and documented for future predictions.
You can almost think of the master budget as a folder that includes all of the other budgets
including:
Sales budget
General and Administrative expense budget
Merchandise purchases
budget
Capital budgets
Production budget
Manufacturing budget
Selling budget
Cash budgets
Budgeted Financial Statements
https://www.youtube.com/watch?v=elS2jLPhlsw