Write a report to your potential investors to explain the financial data from tasks 1 and 2 above. This report should include the essential components of: Introduction, Main Section, and Conclusion.. [ad_1]
Your report should be based on the scenario of a new business called New Hair Shampoo:
You have developed a new style of Shampoo, which you believe could revolutionise the hair shampoo market. The cost to produce a bottle of 400ml shampoo is £1.5. After careful Market Research you decide to sell it at £5.00 per bottle, and you have set a 12-month sales plan.
Following on from the Dragon’s Den success stories – (search in BBC iPlayer if you are unfamiliar with this programme), you have decided to present a report to a small group of potential investors.
You know that any potential investor will expect you to have a good knowledge of how much your product will cost to produce and also of the expected level of sales and profit your product is predicted to make.
- Production and sales plans:
(a) Prepare a 12 months production and sales plan table. You are required:
- Prepare the sales and production plan in unit and money measures;
- Leave some stocks at the year-end in order to satisfy the sales in the starting of the following year;
(b) Present the sale price, production cost and gross profit for your product on a ‘per unit’ base and a 12 month base.
|Per unit (£)||12 month (£)|
- Produce the following financial documents for the first 12 months of trading:
(a) Cash Budget (month by month)
(b) Forecast Income Statement (for the year)
(c) Forecast Balance Sheet (for the year)
- Write a report to your potential investors to explain the financial data from tasks 1 and 2 above. This report should include the essential components of: Introduction, Main Section, and Conclusion.
The purpose of the report is to sell the idea of your new business to potential investors, and persuade them to invest. As this is an accounting and finance module, the emphasis must be financial.
Your potential investors will want to know what return they can expect on their investment. As a minimum they will expect you to provide details of the following:
- Budgeted sales and production
- Forecast cash in-flow, out-flow, and the balance
- Forecast turnover, cost, expenses and profit
- Forecast value of assets, debts, and value of the business
You should refer to the data and financial documents from tasks 1 & 2 and include them in the form of appendices to your report.
Presentation and Structure of the report weight 10% of the mark.