5.

0 INTRODUCTION

A financial plan incorporates all financial data derived from the operating budgets(marketing
or operation) and administration budgets .The all financial information from the operating
budgets is then translated and transformed into a financial budget.
A financial budget is important in developing a success business ,the important can be
summarize as to determined size of investment that partner have to contribute ,to identify and
propose the relevant source of finances ,to ensure the capital expenses are sufficient ,and also
to be used as a guideline for a project implementation.
In developing a financial budget ,financial manager need to gather all the financial inputs
from operating budget ,determine the project implementation cost ,identify the source of
finance ,prepare the pro forma cash flow statement ,pro forma income statement ,pro forma
balance sheet ,and also perform a financial analysis.
From gathering all information ,financial manager need to accumulate the
marketing,operating and organizational budgets .The financial requirement from each plan is
known as operating budgets (marketing ,operating ,organization ).In addition ,monthly and
annual sales forecast are derived from earlier in the marketing plan .After all these
information gathered,financial manager can implement the financial budget.
The component needed in the project implementation cost are capital expenditure ,working
capital ,other expenditure ,and contingency cost . The following data is our business basic
information:
Name of business: Maju Jaya Engineering And Design
Business Legal Entity: Partnership
Nature of Business: Manufacturing and Supplier

5.2 OBJECTIVES
To achieve the satisfaction and comfortableness of our customer and also to provide a quality
and expose our integrity to our value customer for a better future between this company and
our customers.
The main objective of financial plan is to ensure that the scarce financial resources are
utilized the best possible manner at least cost in order to get returns on investment
Besides that, financial plan is prepared to identify and propose the relevant sources of
finance, to ensure that the initial capital is sufficient and to be used as a guideline for project
implementation.

5.3 FINANCIAL PLAN STRATEGIES

Give an excellent service to customers and receive all their advice which may help we
increase our business beneficial.
Give opinion to other department to achieve the business objective.
Keep business profit increasing at the good stage and minimize losses.
Ensure that our company has sufficient amount of cash at all time to meet unexpected
cash needs.
All data from administration ,marketing and operating expenses must be collected by
financial department to prepare the financial plan .A financial plan need to have all of the
following:

Project Implementation Cost Schedule

Sources of Financing Schedule
Pro forma cash flow statement
Pro forma income statement
Financial Analysis

5.4 FINANCIAL INFORMATION

The estimated cost to start the business is about RM 164,000.00.The sources of fund are from
partners as opening capital and loan from financial institution .
Table 1:Financial Information
POSITION
General Manager

NAME OF PARTNERS
AMIRUL ASHRAF BIN

PERCENTAGE
20%

Administration Manager

SHAIFUDDIN
MUHAMMAD ISMAIL BIN

20%

Marketing Manager
Operating Manager

SUKHATTA
ZULFADHLI BIN HASHIM
ARIFF FAHMI BIN ABDUL

20%
20%

Financial Manager

GHANI
MUHAMMAD

20%

SHAMSUSYAZWAN BIN
SHAMSUDIN

Contribution of the capital by the partners:

Table 2:Capital Contribution
NAME OF PARTNERS
AMIRUL ASHRAF BIN SHAIFUDDIN
MUHAMMAD ISMAIL BIN SUKHATTA
ZULFADHLI BIN HASHIM
ARIFF FAHMI BIN ABDUL GHANI
MUHAMMAD SHAMSUSYAZWAN BIN
SHAMSUDIN

5.5 FINANCIAL INPUT

5.5.1 ADMINISTRATIVE EXPENDITURE

ADMINISTRATION BUDGET

AMOUNT(RM)
21,000
21,000
21,000
21,000
21,000

F.Asset
s

Particulars

Monthl
y

Others

Total

Fixed Assets*
Land & Building

OFFICE EQUIPMENT

2,560

2,560
-

Working Capital
SALARY

6,700

6,700

RENTAL

2,800

2,800

UTILITIES

500

500

EPF

804

804

SOCSO

168

168

Other Requirements
Deposit

3,000

3,000

Registration & Licences

800

800

Insurance & Road Tax

Other Expenses
Total

2,560

10,972

3,800

17,332

Table 3:Administration Budget

5.4.2 MARKETING EXPENDITURE

MARKETING BUDGET
Particulars

F.Assets

Monthly

Others

Total

Fixed Assets*
SIGNBOARD

2,500

2,500
-

Working Capital
BANNER

250

250

NEWSPAPERS

100

100

BUSINESS CARD

150

150
-

Other Requirements
Deposit

Registration & Licences

Insurance & Road Tax

Other Expenses

3,000

Total

2,500

500

Table 4:Marketing Budget

5.4.3 OPERATING EXPENDITURE

OPERATIONS
BUDGET

Particulars

F.Assets

Monthly

Others

Total

Fixed Assets*
LORRY

17,000

MACHINE

60,000

LOADER

4,500

SAFETY EQUIPMENT
Working Capital

570

Purchase of Materials
Carriage Inwards &
Duties

17,000

45,000

45,000
-

Salaries, EPF & SOCSO

FUEL

300

300
-

Other Requirements
Deposit

Registration & Licences

Insurance & Road Tax

500

500

Other Expenses

500

62,800

Total

82,070

45,300

Table 5:Operating Budget

5.4.4 PROJECT SALES AND PURCHASES

Sales & Purchases Budgets

Month
Sales

Purchases

1
2
3
4
5
6
7
8
9
10
11
12
Total Year 1
Total Year 2
Total Year 3
Increment Year 2 (%)
Increment Year 3 (%)

(RM)
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
180,
000
2,160,
000
2,268,
000
2,381,
400
5%
5%

(RM)
45,000
45,000
45,000
45,000
45,000
45,000
45,000
45,000
45,000
45,000
45,000
45,000
540,000
567,
000
595,
350
5%
5%

Table 6:Project Sales And Purchases

5.4.5 COLLECTION FOR SALES AND PAYMENT FOR PURCHASES

Sales Collections
(%)

Current month
1 month after sales
2 months after sales
Total

100%
0%
0%
100%

Payments to
Suppliers (%)
Current month
1 month after purchase
2 months after purchase
Total

100%
0%
0%
100%

Table 7: COLLECTION FOR SALES AND PAYMENT FOR PURCHASES

5.5 PROJECT IMPLEMENTATION COST & SOURCE OF FINANCIAL

Table 8: PROJECT IMPLEMENTATION COST & SOURCE OF FINANCIAL

5.6 DEPRECIATION SCHEDULES OF FIXED ASSETS

Table 9:Depreciation Schedule

5.5 LOAN & HIRE PURCHASE AMORTIZATION SCHEDULES

Table 10:Loan & Hire Purchase Amortization Schedules

5.6 SCHEDULE

PRO FORMA CASH FLOW STATEMENT

i.

CASH INFLOWS
Ow ners' Capital (cash)
Bank Loan
Cash Sales

MONTH

Maju Jaya Engineering And Design

PRO FORMA CASH FLOW STATEMENT

180,000

180,000

180,000

180,000

180,000

180,000

180,000

2,323,022

2,160,000

58,022

105,000

2,268,000

2,268,000

2,381,400

2,381,400

YEAR 3

180,000

180,000

88,641

YEAR 2

84,420

6,615

37,044

TOTAL

180,000

180,000

35,280

10,637

12

80,400

6,300

11

180,000

180,000

33,600

10,130

10

6,700

6,000

180,000

180,000

2,800

9,648

6,700

500

180,000

180,000

2,800

804

6,700

500

180,000

180,000

6,700

2,800

804

6,700

500

180,000

180,000

6,700

2,800

804

58,022

105,000

6,700

500

180,000

180,000

6,700

2,800

804

Deposit

Cash Purchases

Operations Expenses

Marketing Expenses

Administrative Expenses

CASH PAYMENTS

TOTAL CASH INFLOWS

6,700

500

343,022

Collection of Accounts Receivable

6,700

2,800

804

6,700
2,800

500

6,700
2,800

804

SALARY
2,800
500

2,800

804

2,223

2,800
500

2,117

2,800

804

RENTAL

804

500

2,016

500

168

804

168

804

168

500

168

500

168

804

168

UTILITIES

168

EPF
168

168

168

168

168

SOCSO

3,308

1,323

1,260

3,150

1,200

3,000

250

100

250

250
100

100
100

250

250

250

100

100

250

100

250

100

250

250

100

100

250

250

100

100

NEWSPAPERS

BANNER

1,985
150

1,890
150

1,800
150

150

150

150

150

150

150

150

150

150

BUSINESS CARD

300

800

3,000

500

300

500

45,000

500

300

45,000

300

45,000

Principal

87,130

967

338

967

338

967

338

967

338

967

338

967

338

967

338

967

338

967

338

967

338

967

4,062

11,604

4,062

11,604

4,062

11,604

595,350
45,000

87,130

567,000
45,000

300

540,000
45,000

45,000

45,000

300

45,000

45,000

45,000

45,000

300

300

300

300

Payment of Accounts Payable

300

Carriage Inw ards & Duties

-

300

3,969

3,780

Salaries, EPF & SOCSO

3,000

FUEL

800

Registration & Licences

500

Insurance & Road Tax

Other Expenses

3,600

Purchase of Fixed Assets - Land & Building -

Interest

967

338

Purchase of Fixed Assets - Others

Principal

338

EXCESS/(DEFICIT)

TOTAL CASH OUTFLOWS

193,515

193,515

149,507

315,437

193,515

121,923

58,077

437,360

315,437

121,923

58,077

559,282

437,360

121,923

58,077

681,205

559,282

121,923

58,077

803,127

681,205

121,923

58,077

925,050

803,127

121,923

58,077

1,046,972

925,050

121,923

58,077

1,168,895

1,046,972

121,923

58,077

1,290,817

1,168,895

121,923

58,077

1,412,740

1,290,817

121,923

58,077

1,534,662

1,412,740

121,923

58,077

1,534,662

1,534,662

788,360

3,071,169

1,534,662

1,536,507

731,493

4,685,309

3,071,169

1,614,140

767,260

Loan Repayments

Hire-Purchase Repayments

Hire-Purchase Dow n Payment

Interest

OPENING BALANCE

PRO FORMA INCOME STATEMENT

ii.

Tax

ENDING BALANCE

Table 11: PRO FORMA CASH FLOW STATEMENT

Table 12: PRO FORMA INCOME STATEMENT

iii.

PRO FORMA BALANCE SHEET

Table 13: PRO FORMA BALANCE SHEET

iv.

FINANCIAL ANALYSIS

Table 14: FINANCIAL ANALYSIS

5.7Liquidity Ratio

Current Ratio
500.0
450.0
400.0
350.0
300.0
Ratio

250.0
200.0
150.0
100.0
50.0
1

2
Ye ar

This ratio shows our business ability to generate cash to meet its short-term obligation .It also
the best known to measures of financial strength by identify in figure as shown below:

CURRENT RATIO

TOTAL CURRENT ASSETS

TOTAL CURRENT LIABILITIES

From the graph above our company current ratio in the first year is 179.0 and increase from
year to year.

Quick Ratio (Acid Test)

450.0
400.0
350.0
300.0
250.0
Ratio

200.0
150.0
100.0
50.0
1

2
Ye ar

Quick ratio also known as the acid test ratio , measures the extent to which current liabilities
are covered by liquid ratio. To determined quick ratio , the calculation of liquid assets does
not take into account inventories since it is difficult to convert them into cash quickly.

QUICK RATIO = TOTAL CURRENT ASSETS-INVENTORIES

TOTAL CURRENT LIABILITIES

Return on Sales
400%
350%
300%
250%
%

200%
150%
100%
50%
0%
1

2
Ye ar

Return on sales (ROS) is a ratio widely used to evaluate our companys operational
efficiency. ROS is also known as a firms operating profit margin. It is calculated using
this formula .

RETURN ON SALE = NET INCOME (BEFORE INTEREST AND TAX)

SALES

This measure is helpful to management , providing insight into how much profit is being
produced per dollar of sales . As with many ratios , it is best to compare a companys ROS
over time to look for trends , and compare it to other companies in this industry . An
increasing ROS indicates the company is growing more efficient , while a decreasing ROS
could sign looming financial troubles.

Return on Equity
350%

300%

250%

200%
%
150%

100%

50%

0%
1

2
Year

The amount of net income returned as a percentage of shareholder equity . Return on equity
measures a corporations profitability by revealing how much profit a company generates
with the money shareholder have invested:

RETURN ON EQUITY =

NET INCOME
SHAREHOLDERS EQUITY

Return on Investment
350%

300%

250%

200%
%
150%

100%

50%

0%
1

2
Ye ar

A performance measure used to evaluate the efficiency of an investment or to compare the

efficiency of a number of different investments . ROI measures the amount of return on an
investment relative to the investments cost . To calculate ROI , the benefit

RETURN ON INVESTMENT=(GAIN FROM INVESTMENT COST OF INVESTMENT)

COST OF INVESTMENT

Debt to Equity
3.50
3.00
2.50
2.00
Ratio

1.50
1.00
0.50
0.00
1

2
Year

A measures of a companys financial leverage calculated by dividing its total liabilities by

stockholders It indicates what proportion of equity and debt the company is using to finance
its assets.

DEBT TO EQUITY =

TOTAL LIABILITIES
SHAREHOLDERS EQUITY

5.8 CONCLUSION

Alhamdulillah and grateful to Allah S.W.T with work hard and cooperation ,we managed to
complete our business plan for Maju Jaya Engineering And Design . The business plan

proposed is hope to succeed and we hope our business will have positive growth over the
years , overcoming the obstacles and challenges to become well-known in the country and
global hopefully.
We believed that our business has a big potential in the future . Every partners have to play
their own roles and give full commitment in their own responsibilities. The general manager
plays the most important role in monitoring his workers and the tasks given to them.
Besides, we target that our business may fulfill customers satisfaction as our business
operates at strategic location we will ensure that our customers will receive the best service in
dealing with our company. Based on our chosen location, our business may grow better as it
is strategic location to attract customers and bring new market into Malaysia economy, which
is good for our country economic growth.