Case Study: Creating Integrated Financial Statements Model
In this case study, you plan to apply for a business loan to open a bubble tea shop because you have low capital. To do so, you may need to submit an integrated financial model to the banker. An integrated financial model needs to have a balance sheet, income statement, and cash flow statement projecting how your business will be performing. 📜
In order to start the operation, you need $10,000 in a machine, $35,000 in furniture and fixtures, $5,000 in miscellaneous inventory (such as cups, tea, milk, filters, and so on), and $5,000 in cash. To raise a total amount of $55,000, you invest $25,000 in the form of equity and borrow $30,000 as a bank loan.🧋
Assumptions (base case):
- Daily sales: 120 cups of bubble tea per day (45% will be in large cups; 55% will be in small cups). It depends on historical seasonal and weather patterns.
- Price: RM7.90 for a small cup of bubble tea and RM8.90 for a large cup of bubble tea.
- Rent: RM1,200/month (estimated base case).
- Consumables: RM0.50 per cup. This amount has been averaged over both large and small cups.
- Staff salary: RM30,000 per year, plus 15% in other staff costs and benefits.
- Utilities (e.g. electricity, gas, and water): RM300 per month.
- Company income tax rate: 30%.
You may download the 👉👉 final integrated financial model 👈👈 to investigate and explore how to build the model.
Hope you find this article helpful. Happy learning. 🌱
