The Importance of Corporate Finance in a Business Plan

Introduction The research is done by the request of the potential investors in the 5 Aces business club on the basis of the business plan provided. Problem faced: The importance of corporate finance in a business plan. The author of the paper is a 3rd year bachelor student in corporate finance Olga Jegorova. The aim of the paper is to elaborate the recommendations on the corporate finance importance when faced with a business plan analysis based on the theory and particular cases. To achieve the aim following tasks to be solved: • Generalize professional literature on corporate finance importance • To analyze the 5 Aces fitness club business plan • To show specific examples of Corporate Finance importance • To show†¦show more content†¦This number tells you what the company can do with what it s got, i.e. how many dollars of earnings they derive from each dollar of assets they control. It s a useful number for comparing competing companies in the same industry. ROA = Net income / Total Assets 6. Return on equity[4] Indicates what return a company is generating on the owners investment 7. Debt to equity[4] Financial ratio indicating the relative proportion of equity and debt used to finance a company s assets. D/E = Debt (Liabilities)/ Equity Now we shall take a specific example of a project that is described by a business plan, we will try to present the figures to our potential investors so that they would look appealing and make them want to invest into the project without hesitation. 8. Sales forecast[4] The process of estimation in unknown situations. It usually refers to observations and analysis of competitors revenues in order to estimate when the sales will be high and when they are expected to slump. The sales forecast may be done in equivalent units or in terms of money. The sales forecast is not a commitment to reach the forecasted figure, but rather a note of what to expect. The 5 Aces business plan The following part of the paper will be devoted to a concrete example of business plan which of course incorporates corporate finance in it. The author will perceive you Ââ€"Show MoreRelatedThe Importance Of Corporate Finance For An Entrepreneur1602 Words   |  7 Pagesbeen conducted to examine the importance of corporate finance to an entrepreneur, and the role it plays in an organization regardless of the structure of a company, or stage of growth. The various forms of ownership are reviewed for startup companies and major corporations to highlight the advantages and disadvantages of each form of ownership, and to illustrate the importance of corporate finance. To provide a balanced view of ownership, less common forms of business ownership are examined usingRead MoreCorporate Management : Corporate Governance Essay1550 Words   |  7 PagesChapter-1 Introduction to Corporate Governance 1.1 Introduction Corporate Governance is a buzz word in the business world. 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