Financial

 

Financial Plan

 

 

ü Sources and Uses of Funds (Statement of Cash Flows)

For starting our operations, we need 612,000 AED. The source of the funds will be shared between five members as each of them will share approximately  122,000 AED for starting and maintaining the operations from their personal funds. The funds will be used for purchasing the building of our office and for cleaning machines and for purchasing furniture.

 

ü Cash Flow

The ending cash for the first three years is 822900 AED.

 

ü Income Statement

The projected revenue for the first year is 960,500 AED.. The projected expenses are 514,600 AED. In addition, the profitability of the operation for the first year is 445,900 AED.

   

ü Balance Sheet

The assets for our business are divided to two parts, current and fixed assets. The current assets are accounts receivables, cash and business improvements. The fixed assets are the building, Machinery, equipment, Furniture and fixtures. On the other hand, the liabilities that will be included in the business are notes payable and accounts payable. The owner’s equity is share capital and retained earnings. The total assets, owner’s equity and liabilities for the first year of operation are 1018600, AED 756,300and 262,300 AED respectively.

 

ü Break-Even Analysis

The break-even point is where the total revenue equal to total expenses. As a result, the difference which is the profit is equal to zero. The operation will break even at point 41500 AED.

 

 

Financial Analysis

 

ü Products Costs:

Product Development Costs

The expenses associated with developing our service that will be included in the business are rent, salaries, and license, cleaning items, advertising, insurance, depreciation and miscellaneous expenses.

 

The rent will be for the space of car parking that the university will provide us. Also, the salaries are important for the 20 employees in company which will be paid variously for supervisor and workers. The internet will be also included as it is important for our business performance.

 

In addition, we should have the license for our employees to work as cleaners and drivers. Moreover, the cleaning items (Car wash soap, wash mitts, buckets, absorbent waffle-weave drying towel, a few extra microfiber detail towels, air freshener…) will be included. Another expense is for advertising through social networks (Facebook and twitter) and UAE university emails. Moreover, we have another expense which is insurance for building trade and employees’ health. In addition, we have depreciation expense for the six cleaning machines. We also have miscellaneous expense that we will need for the office of the company such as stationery and research and development. 

     

 

ü Capital Budget:

 

Capital Equipment

 

Our business depend on 3 important fixed assets; the building of the company which will be in university, machinery and furniture.

 

The cost of capital equipment is 231800 AED. We will invest money in purchasing the company’s building by paying 200,000 AED. 22,000 AED will be paid for machinery and equipment. In addition, we will invest the fund by purchasing furniture and fixtures 9800 AED.

 

The depreciation is for cleaning machines which cost 3000 for each and estimated to have five years useful life. At the end of 5th year, the salvage value (residual value) will be 2000 AED. The method used for calculating is straight line depreciation method. The depreciation value is 600 AED. 

 

Depreciation= (cost – residual value)/ useful life 

 

 

ü HR:

 

Salary and Wages

The cost of salaries and wages for the first year is 246,000 AED. We have twenty employees; one supervisor and his monthly salary 1500 AED and 19 workers who they get paid 1000 monthly.

 

Selling and Marketing Expenses

We will use advertising as an effective way to inform the target customers about our services. For the first three years of operation we will spend 2000 AED for marketing our business through social networks such as twitter and Facebook.

 

 

 

ü Other Operating and Other Expenses:

 

Operating Expenses

We have some day-to-day expense such as miscellaneous expense that we will need for the office of the company such as stationery. The stationery is File Folders & Accessories, Paper & Pads, Storage & Desk Organizers and Store Supplies & Signs & Inks…

Research and development, cleaning items, internet and administration are other expenses we may spend on. 

We spend 42000 AED for purchasing specialized cleaning items for cash wash to use it during a year. 

 

Other Expenses

Other expenses that we need to consume are employees’ health and building trade insurance. We spend on that 4200 AED. 200 AED on building trade insurance for a year and 4000 AED on building trade insurance for all employees during a year also.

 

The license is for our employees to work as cleaners and drivers.    

We need to spend 300 AED yearly on each employee (6000 AED yearly)

 

In addition, the rent is 17000 AED monthly (200000 AED yearly) which will be for the space of car parking that the university will provide us.