BUSINESS PLAN

MARKS: 40 MARKS (20 FOR THE REPORT AND 20 FOR THE

PRESENTATION OF THE BUSINESS PLAN)
A FORMAT FOR DEVELOPING A BUSINESS PLAN
COVER LETTER
COVER PAGE
TABLE OF CONTENTS
EXECUTIVE SUMMARY
MAIN BODY
1.

INTRODUCTION

2.

PURPOSE

3.

COMPANY BACKGROUND

4.

OWNERS OR PARTNERS BACKGROUND

5.

LOCATION OF THE BUSINESS

6.

ADMINISTRATIVE PLAN

7.

MARKETING PLAN

8.

OPERATION PLAN

9.

FINANCIAL PLAN

10.

CONCLUSION

APPENDICES

COVER LETTER

Please attach the company cover letter explaining the business

plan, why it is prepared and the parties to whom it is addressed
to.COVER PAGE

Title of the Business Plan

________________________________________________

Name of the business and business address

____________________
_______________
__________
_______________________

Name of the writer/s

__________
________
_________
___________
___________

Date of submission
__________________

TABLE OF CONTENTS
SECTION/SUB-TOPIC
EXECUTIVE SUMMARY
INTRODUCTION
PURPOSE
COMPANY BACKGROUND
OWNERS OR PARTNERS BACKGROUND
LOCATION OF THE BUSINESS
ADMINISTRATIVE PLAN
MARKETING PLAN
OPERATION PLAN
FINANCIAL PLAN
CONCLUSION

APPENDICES

EXECUTIVE SUMMARY

PAGE

Highlighting the important components of the plan

The product (s)

the target market

market share
major strategies

products, price, promotion -place).

The objectives of the business plan as well as the marketing objectives.

Briefly explain the financial situation, project implementation cost (RM )
and the need to get support in term of loan (RM ), etc. to run the business
successfully.
Indicate the ability to run the business successfully including projected sales
(RM ) and profit (RM ) and strong financial/income statement/cash flow
(RM , Year 1 & RM , Year 3) in the near future.

1.0

INTRODUCTION
1.1

Name of the company

__________________________

1.2

Nature of business
_________________________
_________________________________________________

1.3

Industry profile

Trend in using the proposed product

Industrial growth rate for the product
Problems in using related products and the proposed product would
solve consumer problems.
Government policies towards the use of the proposed product
Availability of Facilities

1.4

Location of the business

____________________
___________________
____________________
_____________________
______________

1.5

Date of commencement

_____________________

1.6

Factors in selecting the proposed business

1. .
2. .
3. .
4. .
5. .
6. .

1.7

Future prospects

Market growth showed high demand for the proposed product.

Experience in using the product indicated positive trend
Changing in consumer life-style
Financial allocation/Fund
Ability of the product to meet consumer need
Future development in the chosen business

Continuity of government policies

2.0

PURPOSE
Clear, concise and coherent objective of the business plan

This business plan is prepared for the purpose of .

1.
Obtaining working capital loan from ______ for the amount of RM
_______
2.

Highlighting the proposed venture to run the business of _____.

3.0

COMPANY BACKGROUND

3.1

Name of the business

E- L QUEST ENTERPRISE
3.2

Business Address

E- L QUEST ENTERPRISE
123A JALAN LAKSAMANA 2
TAMAN TUN AMINAH
81300 JOHOR BAHRU, JOHOR
3.3

Correspondence address (including website/email

address)
Could be difference

E- L QUEST ENTERPRISE
123A JALAN LAKSAMANA 2
TAMAN TUN AMINAH
81300 JOHOR BAHRU, JOHOR

E-lquest.yahoo.com

3.4

Telephone and Fax numbers

07-5555557/8/9
Fax 07-5556767

3.5

Form of business

Business Registration Act 1956 (Amendment 1978)

Sole proprietorship
Partnership
Company Act 1965

Limited company by guarantee

Limited company by share (Private limited company,
Public limited company, Foreign owned company)
Unlimited company

Cooperation Act 1948

Parliamentary Act or State Government Enactment
PARTNERSHIP/Sdn. Bhd.
3.6

Main activity or activities

LIST OF ACTIVITIES THE COMPANY DOES

Manufacturing
Processing
Delivery
Consultation
After sales service
Marketing
Selling
Demonstration
Packaging
Buying the raw materials
Accessories

Getting and keeping enough supply of mathematics

CD from the manufacturer
Promoting the use of Mathematics CD

3.7

Selling the mathematics CD

Supplying the mathematics CD to
retailers/schools/middlemen
Delivery of the purchased CD to clients

Date of commencement
Mac 2008.

3.8

Date of registration
February 1, 2008

3.9

Registration number
JM035768

3.10 Name of bank

CIMB
Tun Aminah Branch
Alan Laksamana 8
Johor Bahru, Johor.
3.11 Bank account number
AC12345678

3.12 The Companys Vision

WHAT THE COMPANY WANT TO BE?

To be the preferred company in ICT-based teaching and learning

materials in Malaysia.
3.13 The Mission
WHY THE COMPANY EXIST?
To provide ICT-based mathematics problems solving that enhance
learners ability and interest in mathematics.
3.14 Objectives of the Company
What the company want to achieve or to give to customers
1.
2.
3.

4.0

To provide ICT-based teaching and learning materials for schools in

Malaysia.
To promote the use of ICT-based teaching and learning materials inline with the national aspiration and educational development of
Malaysia.
To supply and to deliver the ICT-based teaching and learning
materials to customers.

OWNERS OR PARTNERS BACKGROUND

Name:
________________
I/C No:
_______________
Marital status: _________
Permanent address: ________________
Correspondence address (including email):
_____________
______________
Telephone number: __________________
Academic qualifications: _________________________________
__________
___________
__________________
________________
Courses attended:

Attended training in
________________________
________________________
_______________________
xxxxxx.

Skills & Experience:

Able to _________________________
Expert in _________________________

Present occupation: _______________________________

Previous business experience: _________________________

__________________________

Name:
I/C No:
Marital status:
Permanent address:
Correspondence address (including email):
Telephone number:
Academic qualifications:

Courses attended:

Skills & Experience:

Present occupation:
Previous business experience:

Name:
I/C No:
Marital status:
Permanent address:
Correspondence address (including email):
Telephone number:
Academic qualifications:

Courses attended:

Skills & Experience:

Present occupation:
Previous business experience:

Name:
I/C No:
Marital status:
Permanent address:
Correspondence address (including email):
Telephone number:
Academic qualifications:

Courses attended:

Skills & Experience:

Present occupation:
Previous business experience:

Name:
I/C No:
Marital status:
Permanent address:
Correspondence address (including email):
Telephone number:
Academic qualifications:

Courses attended:

Skills & Experience:

Present occupation:
Previous business experience:

5.0

LOCATION OF THE BUSINESS

o Physical location

o Building
o Basic amenities
The company is located in/at

_____________________
_____________________
____________________
It is located adjacent to the main roads
Could be difference
The company occupies a shop lot of BANGUNAN ..
Rental/Own cost of the building, condition, structure, type

Basic amenities include

_______________
______________
____________

__________________Location Plan of the Company

Prepare and attach the location plan

6.0

ADMINISTRATIVE PLAN

Introduction to the organization

One of the best ways to introduce a business organization is to state its
vision and objectives.
6.1

VISION

WHAT THE COMPANY WANT TO BE?

________________________________________________________

6.2

MISSION

WHY THE COMPANY EXIST?

__________________________________

6.3

OBJECTIVES

WHAT THE COMPANY WANT TO ACHIEVE OR TO GIVE TO CUSTOMERS

4.
5.
6.

___________________________________________________.
_________________________________________________.
_________________________________________________.

6.1

Organization chart

An organization chart will show how a business is structured according to the

departments and/or positions in the company. It will allow one to see how
the lines of authority and responsibility flow through the organization.

6.2

Manpower planning

The administrative plan needs to include a list of all the staff positions. It is
best to present the positions and number of people for each position in table
form to facilitate easier understanding. It must be noted here that the
positions listed here are confined to administrative staff.
Table 6.1: Positions and the number of administrative staff
Position
EXCECUTIVE DIRECTOR
Finance Manager (Finance)
Head of Human Resource Management &
Administration
Manager (Finance)
Manager (Account)
Manager (Human Resource Management / Human
Resource Development)
Manager (Administration)
Executive (Finance)
Executive (Account)
Executive (HRM)
Clerk (Account)
Clerk (Finance)
Clerk (HRM)
Clerk (HRD)
Clerk (Administration)

Number of staff

6.3

Schedule of tasks and responsibilities

A schedule of tasks and responsibilities has to be constructed for every

post that is available in the organization. This schedule will describe in
detail the tasks and responsibilities of the person holding the particular
post.
Table 6.2: Schedule of tasks and responsibilities
Position

Job description

Manager (Administration)

To administer activities related to

transportation, security and general office
management
To plan, motor and implement matters related
to recruitment, salaries, training and human
relations in the company
To identify training needs of the employees
and to provide training according to the
identified needs
To prepare balance sheet and account
statement for the company
To issue sales order and purchase order based
on requests from other departments and to
monitor use of budget according to the
approved operating budget

Manager (HRM)
Executive (HRD)
Clerk (Finance)
Clerk (Account)

6.4

Schedule of remuneration

The administrative plan has to include the remuneration schedule that lists
the salary and wage structure for each position. Additionally, it should
include the contribution that a company has to allocate to different provident
funds like the Employee Provident Fund (EPF) and the Social Security
Organization (SOCSO).
Table 6.3: Remuneration for administrative staff
Position

Manager
(HRM)

Manager

(Administration
)

Executive
(HRD)
Clerk
(Administratio
n)
Clerk (HRM)
Clerk (HRD)

No.

Monthly
salary
(RM)

EPF
contributi
on (13%)
(RM)

SOCSO
(2%)
(RM)

Amount
(RM)

6.5

List of office equipment

A list of office furniture and equipment is necessary to facilitate layout

planning and budget considerations.
Table 6.4: List of office equipment
Item
Personal computer
Office renovation
Photocopiers
Telephones
Split unit airconds

Quantity

Price/per unit (RM)

Total cost (RM)

6.6

Administrative budget

The administrative budget must be determined to facilitate the overall

financial planning of the business. All costs under every section of the
business plan need to be summarized under the relevant section. The cost
structure of a business can be divided into three main categories:
Fixed assets: Refers to the investment made in the purchase of assets that
will be used in the organization for a period of more than one year. E.g.
Furniture and fittings, business premises, renovation, equipment.
Monthly expenses: Refers to the payments that have to be made every
month as part of maintaining the business existence. E.g. remuneration and
contributions for business personnel, monthly payment for utilities, business
premise rental, traveling expenses, office supplies.
Other expenses: Refer to the expenses that do not fall into the above
categories. These items are often expenses incurred once a year or on a
periodic basis. E.g. Vehicle road tax and insurance, business registration
fees, deposit for utilities, deposit for rental, legal fees.
Table 6.5: Administrative budget
Fixed assets
expenses (RM)
Furniture and
fittings
Salaries
Rental deposits
Utilities
Insurance
Traveling expenses
Office supplies
Road tax

7.0

MARKETING PLAN

Monthly expenses Other expenses

(RM)
(RM)

7.1

Product or service description

You need to describe clearly the product or service that is offered to

the customers. It should be noted that a good product or service must
have the ability to fulfill the needs and wants of the target customer.
The name of the products/services:
Main Features of the products/services;
Details of The products
Differentiation
7.2

Target market

Identify your target market

The target market:
Other group of consumers:
7.3

Market size

The size of a particular market needs to be estimated so that the

business can then estimate its own market share. Subsequently, these
estimates are to be used in forecasting sales for the business. Usually
the market size estimation is done in the form of units of goods or
sales.
7.4

Competition

A good analysis on competition needs to list the main competitors and

their respective strengths and weaknesses. This analysis will help the
business formulate a suitable strategy to deal with the expected
competition.

Name of competitor and their products:

Strengths and weaknesses of the competitors:

7.5

Strengths and weaknesses of your products:

Market share

The market share is estimated as a percentage of the market size.

This estimation is made based on the companys strengths and
weaknesses compares with its competitors.

Total market share: (Main target group and other target

groups)

Competitors market share:

The target market share:

7.6

Marketing objectives
State the marketing objectives; make sure that they are
measurable.

7.7

1.

To achieve sales target of RM1.98 million in the

first year and RM8.5 million in three years

2.

To promote the sell of the mathematic CD up to

132,500 units in three years

3.

To capture 20% market share of standard two

pupils.

Sales forecast

The sales forecast is done for at least the first year of the business and
can be extended to cover sales for the second and third years as well.
Sales forecast for the first year is done on a monthly basis whereas 2nd
and 3rd years sales forecast are yearly basis estimates.
Identify sales per unit:
Market share
Determine sales volume based on the target market share:

Determine sales forecast in RM:

Year

Month

Sales forecast (RM)

The sales forecast can also be itemized.

7.8

Marketing strategy

Identify your marketing strategies:

Product strategies:
One unit of CD: ___________________
Package: _________________________
Optional product: Books on __________________.
Price strategies:
Promotion strategies:
Electronic advertisement: _________________________________
Print advertisement: ____________________________________
Exhibitions in schools: ____________________________________
Sales promotion: 5 CDs free one: __________________________
Trial period: __________________________________
Distribution channel strategies:
Specific outlets: _______________________________
Kiosk: _______________________________
Direct orders: _________________________
Part-time sales agent at schools: __________________
Websites: xxxx
Facebook: ----

7.9

Marketing budget

The marketing plan also needs a budget for fixed cost, monthly expenses
and all other expenses.
Fixed cost; e.g. The purchase of a van
Monthly marketing expenses; e.g. promotion cost, marketing staff
remuneration and vehicle tax.
Other expenses; e.g. vehicle insurance.
Item
Van
Promotion
Vehicle insurance
Business card
Pamphlets
Catalogues
Gifts
Traveling
expenses
Remuneration
Kiosk rental

8.0

Fixed assets
expenses
80000.00

OPERATIONAL PLAN

Monthly expenses Other expenses

50000.00
2500.00
1000.00
15000.00
15000.00
20000.00
30000.00
18000.00
3000.00

8.1

Process flow chart

Identify the main steps or phases of operations and

construct a flow chart to indicate the flow of the steps.
Figure 8.1: A flow chart showing steps involve in developing
and selling of CD Mathematics

Figure 8.1: A flow chart showing steps involve in ordering

and selling of CD Mathematics
Identify customer
requirements
Propose design and content
of the courseware
Plan and manage order or CDs
according to sales trend

Promote the CD and get sales

order

Develop prototype of the

courseware
Purchase of
Receive
CDs from
Send sales order to storage
raw material
manufacturers/Production
&
courseware
store them in the storage Test the prototype &
determine final design of the
rooms
courseware
Develop the courseware,
Prepare/Package
of the CDs
testing and finalization
according to sales order
Packaging and Storage
Supply the CDs to customers
Supply to
customers/marketing
department based on the
Manage
request Collection of
payment CDs and account
receivable/Financial

Identify customer
requirements
Propose
Supply todesign and content
of
the
courseware
customers/marketing
Packaging
Test
Develop
the
prototype
the
and
courseware,
Storage
&
of the
department
based
on
testing andfinal
determine
courseware
finalization
designthe
of the

8.2

Production schedule

The production schedule is prepared to enable the business

to meet the desired outputs. The production schedule
planning is closely guided by the sales forecast done earlier
in the marketing plan.
Table 8.1: Production and Order of CDs schedule for 2008
Months

Jan
Feb
Mac
April
May
June
July
August
Sept
Oct
Nov
Dec
2008

Units of CDS
required based
on the sales
forecast
2000
2000
2000
4000
4000
4000
4000
4000
6000
6000
6000
6000
50000

Units of CDs to
develop by
production
department
700

Units of CDs to
order from
manufacturers

1400
1400
1400
2100

2600
2600
2600
3900

17500

32500

1300

8.3

Material requirements

Materials needed for the operations of the business can be

either in the form of raw materials or ready products. The
materials required must be listed according to the amount
required and cost. Main suppliers to supply the materials
must also be listed.
Table 8.2: Material requirements
Item

Quantity
required

Safety
stock

Price per
unit (RM)

Supplier

0.30

Total
purchase
(RM)
5400.00

CD
CD covers
CD case
Boxes

17500

500

3500

100

0.30

1080.00

KKK

XXX

8.4

Manpower requirements

The operations plan needs to list all the manpower required

in the operations section of the business. This list takes
into consideration only the people involved directly in the
operations. The list needs to state the nature of
employment (fulltime/part-time/contract), remuneration and
any related compensation such as EPF and SOCSO.
Position

No. of
emp
1

Job status

EPF
(13%)
390.00

SOCSO
(2%)
60.00

Total

Contract

Remuneratio
n per month
RM3000

Engineer

Fulltime

RM7800

1014.00

156.00

8970.00

Sys Ana

Fulltime

Tech (CD)

Fulltime

Tech (Test)

Fulltime

Crk (Ord)

Fulltime

Crk (Inv)

Fulltime

Store
Keeper

Fulltime

RM700

91.00

14.00

805.00

Laborers

10

Part-time

RM6000

780.00

120.00

6980.00

Head of
Coursewar
e Dev
(Dev)

3450.00

8.5

Machine and equipment

All machine and equipment required must be listed together

with the estimated price, number of units and suppliers
name.
Item

Price per
Unit

No required

Total cost

Supplier

Soft wares
Testing
equipment
Packaging
machine
Course ware
processing
equipment

3500

10500.00

XYX

10500

21000.00

XYT

8.6

Operational layout plan

The operations layout plan of a business refers to the

planning of how best to utilize the operations area. You
need to highlight relevant factors that need to be
considered for efficient operations as well as how machines
and equipments are to be placed for maximum productivity.
Figure 8.3: Operation lay out for the production of
Mathematic CD

Production
department
office

Raw
material
Storage
Course ware
dev
machineries

Course ware
testing
equipment
& Quality
verification

Storage of
CDS

8.7

Operation overheads

The operation overheads encompass water, electricity,

telephone, and gas facilities as well as other basic utilities
that are essential in moving the operations.
Table 8.2: Operation overheads for the production of
Mathematics CD
Item
Electricity
Water
Gas
Telephone

Cost (RM)

8.8
Operation budget
In preparing the operation budget, you must consider fixed assets cost,
monthly expenses and other expenses.
The fixed assets cost under the operation section includes the cost of the
building or buying the operations space (factory, shop, etc) and any relevant
renovation work, as well as the purchase of machines and equipment.

The monthly expenses cover material cost, remuneration and all factory
overheads

Other expenses include deposit on factory rental, deposit for utilities and
insurance.
Table 8.4: Operational budget
Item
Machines
Equipment
Wages
Factory rental
Deposit on
factory rental
Deposit on
utilities
Insurance
Material cost
Factory
overheads
Renovation

Fixed asset
13000

Monthly expenses Other expenses

8000.00
10000.00

30000.00
2800.00
10,000.00

9.0

FINANCIAL PLAN

The financial plan acts as a point where all financial information in the
administrative, marketing and operations plans are collected and
summarized to give a picture of the how much the business will cost to run.
The information in the financial plan is essential in analyzing the viability of
the project and will have an impact on whether the business venture will
continued as planned, be adapted or abandoned. When the business is
carried out as planned, the financial information can be used to control the
business expenses.
9.1

Project implementation cost schedule

The project implementation cost will show how mush investment in term of
fixed assets cost, monthly expenses and other cost are needed to start the
business.
Table 9.1: Project implementation cost schedule
A. Capital expenditure
Land & building (contributed by owner)
Machinery and equipment
Furniture and fixtures
Vehicle Van (hire purchase)
Renovation cost
Sub-Total
B. Working capital (2 months)
Marketing
Production/Operation
Administrative
C. Other expenditure
Pre-operating
Business registration
Insurance
Road tax
Sundries

RM
45,000
23,000
7,000
25,000

RM

RM

Deposits
Utilities (Tel/water/electricity)
Sub-Total
Grand Total
D. Add: Contingency cost (10%)
TOTAL PROJECT IMPLEMENTATION
COST

137,500
(sama
dengan
total

source of
fund)

9.2

Sources of funds schedule

Sources of funds will indicate availability of funds to finance the project

implementation cost.
Table 9.2: Sources of finance schedule
A. Equity contribution
Cash
Assets (land & building)
Sub-Total
B. External sources
Hire purchase (Van)
Term loan
Sub-Total
C. Others
TOTAL SOURCES OF FINANCE

RM

RM

137,500 (sama
dengan total
implementation
cost)

9.3

Fixed assets depreciation tables (optional)

Table 9.3: A depreciation schedule for a van

Type of asset:
Original cost:
Economic life:
Scrap value:
Method:

Van
RM25,000
5 years
RM0
Straight line

Year

Accumulated depreciation
(RM)
0
5,000
10,000
15,000
20,000
25,000

0
1
2
3
4
5

Annual depreciation
(RM)
0
5,000
5,000
5,000
5,000
5,000

Book value
(RM)
25,000
20,000
15,000
10,000
5,000
0

9.4

Loan amortization schedule (optional)

Information on term loan

Term loan
Loan amount:
Loan period:
Interest rate:
Method:

Hire purchase
Loan amount:
Loan period:
Interest rate:
Method:

RM45,000
5 years
10%
Annual rest

RM20,000
5 years
8%
Flat rate

Term loan
Annual payment of principal
RM45,000/5 years = RM9,000

Hire purchase
Annual payment of principal
RM45,000/5 years = RM9,000

Interest payment:
Year 1: RM45,000
RM4,500
Year 2: RM36,000
RM3,600
Year 3: RM27,000
RM2,700
Year 4: RM18,000
RM1,800
Year 5: RM9,000

x 10% =

Interest payment:
Year 1: RM20,000 x 8% = RM1,600

x 10% =

Year 2: RM20,000 x 8% = RM1,600

x 10% =

Year 3: RM20,000 x 8% = RM1,600

x 10% =

Year 4: RM20,000 x 8% = RM1,600

x 10% = RM900

Year 5: RM20,000 x 8% = RM1,600

Table 9.3: Term loan amortization schedule

Loan amount: RM45,000
Loan period: 5 years
Year
Interest
(RM)
0
0
1
4,500 (10% x
45000)
2
3
4
5

3,600 (10% x
36000)
2,700
1,800
900

Interest rate: 10%

Method: Annual rest
Principal
Payment
(RM)
(RM)
0
0
9,000 (interest
13,500
13500 9000 =
1125.00
4500)
monthly
9,000
12,600

Balance
(RM)
45,000
36,000 (45000
9000)

9,000
9,000
9,000

18,000
9,000
0

11,700
10,800
9,900

27,000

9.5

Hire purchase repayment schedule (optional) can be combined

with 9.5

Table 9.4: Hire purchase loan amortization schedule

Type of asset: Van
Cost of asset: RM25,000
Down payment: RM5,000
Year
Interest
(RM)
0
0
1
1,600 (8% x
20000)
2
1,600
3
1,600
4
1,600
5
1,600

Loan amount: RM20,000

Interest rate: 8%
Method: Flat rest
Principal
Payment
(RM)
(RM)
0
0
4,000
5,600
4,000
4,000
4,000
4,000

5,600
5,600
5,600
5,600

Balance
(RM)
20,000
16,000 (20000
4000)
12,000
8,000
4,000
0

9.6

Pro forma cash flow statement

Proforma cash flow will indicate the business cash situation of the company.
Table 9.5: A pro forma cash flow statement (Monthly)
Month
A

Cash flow
Equity
cash
Term loan
Cash sales

Total
cash flow

Cash
outflow
Operation
al
expendit
ure
operation
al plan

Preoperat
ion

Jan

20000
sales
forecas
tmarketi
ng plan
20000

Raw
materials

3000

Direct
labor

3000

Operationa
l
overheads
Marketin
g
expendit
ure
marketin
g plan
Sales
commissio

2000

1000

Feb

Mac

Apr

May

Jun

Jul

Aug

Sept

Oct

n
Entertainm
ent
allowance
Administr
ative
expendit
ure
adminitra
tive plan
Salaries &
wages
EPF &
SOCSO
Other
administra
tive
overheads
Loan
repayment
: (refer
loan
schedule)
Principal
Interest
Hire
purchase
repayment
Down
payment
Principal
(refer hire
purchase
schedule)
Interest
(refer hire
purchase
schedule)
Capital
expendit
ure
operation
al &
administr
ative
plans
Machinery
&
equipment
Furniture &
fixtures
Renovation
Preoperationa

500

5000
1000
2000

750
375

5000
333

133

23000
7000
4000
2700

l
expenditur
e
Deposits
D Total
cash
outflows
E Cash
surplus
(Deficit)
B-D
F

Beginnin
g cash
balance

G Ending
cash
balance

800
4250
0
3000
0
(7250
0
42500
)
0

30000

19091
909
(20000

19091)
30000
(preoperati
on)
30909
(30000
+ 909)

Table 9.6: A pro forma cash flow statement (Annually)

Year

Cash flow
Equity cash
Term loan
Cash sales

Year 1 (Derive from

monthly
transaction)

Year 2

Year 3

27500
45000
240000 (from
monthly schedule)
312500
(27500 +45000 +
240000)

0
0
276000
(Estimation)

0
0
31740
(Estim

271600

239900

24971

36100

67690

40900 (from
year 1)
77000 (36100 +

77000
year 2
14469

Total cash flow (+ all A

activities)

Cash outflow
Operational expenditure
Raw materials
Direct labor
Operational overheads
Marketing expenditure
Sales commission
Entertainment allowance
Administrative expenditure
Salaries & wages
EPF & SOCSO
Other administrative overheads
Loan repayment:
Principal
Interest
Hire purchase repayment
Down payment
Principal
Interest
Capital expenditure
Machinery & equipment
Furniture & fixtures
Renovation
Pre-operational expenditure
Deposits
Total cash outflows (+ all C
expenditures)
Cash surplus (Deficit) (B C)

Beginning cash balance

40900 (312500
271600)
0

Ending cash balance

40900 (from E)

40900)

9.7

Pro forma profit and loss statement/ Income statement (optional)

Pro forma profit and loss statement will show the business profit/loss
estimation at the end of the accounting period.
You must get cost of goods manufactured and gross profit
Calculation of cost of goods manufactured
RM
Raw material used
Opening stock (1/1) jika masih
ada
Add: Purchase of raw materials
Raw material available
Less: Closing stock (31/12) guna
untuk finished products
Direct materials

0
36000 (from cash
flow schedule)
36000
3000

33000 (36000
3000)
36000 (from cash
flow schedule
annually)
69000 (33000 +
36000)
28600
(24000 + ??? dummy

Direct labor
Prime cost
Manufacturing overheads*
(operational OH + Depreciation
charges)
Work-in-process
Add: Work-in-process (1/1)
Less: Work-in-process (31/12)
Cost of goods manufactured

RM

0
0
0
97600 (69000 +
28600)

(To be transferred to the trading

account)

* The amount of manufacturing overheads is not the same as the amount of

the operations overhead (RM24000) in the cash flow statement because
depreciation charges for the plant, machinery and equipment have been
added on to the operational overheads. The depreciation charge does not
appear in the cash flow because it is a non-cash expenditure.

Table 9.6: Calculation of gross profit for a manufacturing company

RM
SALES
COST OF GOODS SOLD
Opening stock for finish goods
(1/1)
Add: Cost of goods manufactured
Goods available for sale
Less: Closing stock for finished
goods (31/12) telah proses; eg
CD dah sedia siap

RM
240000 (Year 1
data)

0
97600 (data cost)
97600
3000

94600 (97600
3000)
145400 (240000
94600)

GROSS PROFIT

Table 9.6: Calculation of gross profit for a trading company

RM
SALES
COST OF GOODS SOLD
Opening stock for finish goods
(1/1)
Add: Purchased of finished goods
Goods available for sale
Less: Closing stock for finished
goods (31/12)
GROSS PROFIT

RM
240000

0
36000
36000
3000
33000
207000

Table 9.7: A pro forma income statement for a manufacturing

company
RM
SALES
COST OF GOODS SOLD
Opening stock for finish goods
(1/1)
Add: Cost of goods manufactured
Goods available for sale
Less: Closing stock for finished
goods (31/12)
GROSS PROFIT
LESS: OPERATING EXPENSES
Administrative expenses
Marketing
Interest:
Term loan
Hire purchase
Depreciation charges
Miscellaneous
Total operating expenses
NET PROFIT BEFORE TAX

RM
240000 (cash flo
schedule)

0
97600
97600
3000
94600
145400
96000
18000
4500
1600
7200
2700

130000
15400 (145400 130000)

Table 9.6: A pro forma income statement for a trading company

RM
SALES
COST OF GOODS SOLD
Opening stock for finish goods (1/1)
Add: Purchased of finished goods
Goods available for sale
Less: Closing stock for finished
goods (31/12)
GROSS PROFIT
LESS: OPERATING EXPENSES
Administrative expenses
Marketing
Operations/productions
Interest:
Term loan
Hire purchase
Depreciation charges
Miscellaneous
Total operating expenses
NET PROFIT BEFORE TAX

RM
240000

0
36000
36000
3000
33000
207000
96000
18000
60000
4500
1600
11800
2700
194600
12400

9.8 Pro forma balance sheet (optional)

Proforma balance sheet will highlight the overall financial standing of the
business at the end of the accounting period.
Table 9.7: A pro forma balance sheet for a manufacturing company
RM
FIXED ASSETS
Land & Building
Machinery & equipment
Furniture and fixtures
Renovation
Van

RM

45000
18400
5600
3200
20000
92200

CURRENT ASSETS
Cash
Closing stock for raw materials
Closing stock for finished goods

40900
3000
3000

46900

OTHER ASSETS
Deposits

800

TOTAL ASSETS

139900

EQUITY
Capital
Accumulated profit

72500
15400
87900
0

CURRENT LIABILITIES
LONG-TERM LIABILITIES
Term loan
Hire purchase
TOTAL EQUITY AND LIABILITIES

36000
16000

52000
139900

Table 9.7: A pro forma balance sheet for a trading company

RM

RM

FIXED ASSETS
Land & Building
Machinery & equipment
Furniture and fixtures
Renovation
Van

45000
18400
5600
3200
20000

92200

CURRENT ASSETS
Cash
Closing stock for finished goods

40900
3000
43900

OTHER ASSETS
Deposits

800

TOTAL ASSETS

136900

EQUITY
Capital
Accumulated profit

72500
12400

CURRENT LIABILITIES
LONG-TERM LIABILITIES
Term loan
Hire purchase
TOTAL EQUITY AND LIABILITIES

84900
0

36000
16000

52200
136900

10.0 CONCLUSION
Briefly highlight about the product (s), the need to provide assistance
(especially financial/fund/loan) and the ability of the company to run the
business successfully including repayment of the loan.

Briefly
indicate
the
importance
consumers/communities/nation, etc.

of

the

business

to

Highlight the need to support the business proposal by relevant parties.

the

Conclude with appreciation/acknowledgement to the parties which provide

continuous support, if any.APPENDICES

Registration of the company

Related forms - Borang 24 & 49

Suppliers quotation

List of machineries

Agreement letter

Letter of references

Research findings

Pictures

Previous financial statements