Question

Project: Business Ventures – Part 3

This project will focus on using the principles of financing and financial statements covered in Chapters 1 & 2, to develop financial statements—an income statement and a balance sheet—for a business you choose. If you have already completed Business Ventures Part 1 and Part 2, you may continue to base Part 3 on that business, or you can start with a new business. Your main goal for this project is to create a table like the one shown below to develop your financial statements: an income statement and a balance sheet. Next, you will analyze the charts relating to an income statement and a balance sheet. Finally, you will decide what financing source you will use to expand your business and explain why you chose this source.

During this project you'll accomplish the following:

Objectives
Create a table and develop an income statement and a balance sheet.
Analyze charts relating to an income statement and a balance sheet.
Decide what financing source you will use to expand your business and explain why you chose this source.
Business Ventures - Part 3

Directions
1. Using the information learned in Unit 3, create a table like the one shown below to develop your financial statements: an income statement and a balance sheet.

Click here for a printable income statement.

Click here for a printable balance sheet.

2. Next, using the information from the charts shown below, analyze the information and explain how it relates to an income statement or a balance sheet.

img/img_is_graph_business_ventures3.gif

img/img_bs_graph_business_ventures3.gif

Write a paragraph to explain if the business had a net income or net loss. Why?

Write a paragraph to explain what the chart shows about the business's financial condition?

3. Now, based on your financial statements, decide what financing source (self-financing, friends and family, investors, loans, grants, or credit cards) you will use to expand your business and explain why you chose this source.

Question # 1
Long Text (essay)
Type your answers to the questions here:

Write a paragraph to explain if the business had a net income or net loss. Why?

Write a paragraph to explain what the chart shows about the business's financial condition?

Based on your financial statements, decide what financing source (self-financing, friends and family, investors, loans, grants, or credit cards) you will use to expand your business and explain why you chose this source.

Answer 1

Answer: The business shown in the graph had a net income or gain. The reason being is one quick glance shows that the business shows its revenue and assets in a teal blue. That teal blue is well above owners equity, total liabilities, and total expenses.

The chart shows that the business is doing great and is pulling in massive profits. The chart also shows that whatever the business is doing they can continue to do so for a while until market or economic changes occur that would render their strategies ineffective.

Based on my financial statements I would likely use self financing. At the very least in the initial stages of the business. This is because I'd rather not owe anyone for a business that doesn't even generate revenue yet. However after the business is stable and more money is needed for growth then I would entertain the possibility of getting a grant or seeking an investor.

Explanation: I'm not sure this is the best answer but this question is more opinion than anything, try taking my answer as an example and work off of that in order to make yours more unique.

Answer 2

Based on the charts the company is making a Net Income because almost all four quarters had a profit. In order to find out if they had a profit or not, I added up the Total Revenue and Total Expenses. Total revenue made around $100,000 and the total expenses were around $61,000. I calculated that the company roughly made $39,000 in profit for that year.

The chart shows that the business is doing well and is attracting huge profits. The chart also shows that whatever the business is doing they can continue to do so for a while until market or economic changes make their strategies ineffective.

Based on my financial statements I would try to get a loan to help finance the company because the company is making a profit of 15%. With a profitable business with proof, it can be used to show that the company is able to pay of the loan and fees. This financial source is the best for my situation because the business is too large for funding from self financing and family or friends, is too small for Angel Investors, and is too much for a credit card. The loans allow the company to pay off at a gradual rate for a fixed term.

Step-by-step explanation:

These were answers for when I finished the project.

EDGE 2021

**Please do not copy word for word**

Only use as an example so you don't plagiarise