Managerial Accounting Project
For this project, you will create the accounting portions of a business plan using an assortment of tools presented in the course. You will select a business that is of interest to you or that you would like to start. You may use an existing business as long as you concisely discuss its founding process. Your paper should be in Chicago format (suggested length: 10-11 pages) and include at least two quality references. Note: Wikipedia, blogs, and social media do not qualify as academic resources. One of the references can be our textbook.( Introduction to managerial accounting 7th edition, Peter C. Brewer,Ray H. Garrison, Eric W. Noreen)
To start, write 1-2 pages that describe:
• Why you selected this business
• Some basic information about the business’s market, location, and competition
• Why you think this business would be profitable
• How your financial decisions will affect the business
After this introductory portion, you will create the financial plan. Requirements for your final project are as follows:
1. Startup Cost Analysis
In this section, you will include a detailed list of how much it will cost to start the business. This should include most, if not all, of the following: cost of property, buildings, machinery, equipment, planning, legal fees, consulting fees, and one year of operational costs.
2. Cost/Benefit Analysis
In this section, you will perform an analysis of the advantages and disadvantages of the business. Determine if your business is a sound investment decision (justification/feasibility) by conducting a SWOT analysis, and compare the total expected cost (disadvantages) of each against the total expected benefits (advantages) to see whether the benefits outweigh the costs and by how much.
3. Breakeven Analysis
In this section, you will perform a basic breakeven analysis. Estimate basic variable and fixed costs that will accrue in operations, and then compare this to how much revenue (units that need to be sold) is needed to cover these costs. This should include your basic operational costs (e.g. salaries, rent, utilities, product costs, etc.). Be sure to include calculations and a graph showing your breakeven analysis.
4. Cost-Volume-Profit (CVP) Analysis
In this section, you will perform a CVP analysis and investigate the outside factors that may influence your breakeven point. Identify 2-4 qualitative factors that can vary between your base case (the breakeven analysis) and changes to this base case. You also need to weigh the pros/cons of each of the outside factors. These outside factors can include changes of location, changes in competition, or changes in outside market factors (e.g. stock market, oil prices, commodities, or anything that can affect revenue for your business). Be sure to include calculations and graphs for CVP analysis.
5. Pro-Forma Financial Statements
In this section, you will create pro-forma financial statements in which you will estimate the financial operations of your business. This will include a pro-forma income statement, pro-forma statement of cash flows, and a pro-forma balance sheet. For each of these, project out for three years (all three years can be listed on one statement). Although these values are estimations, they can help predict how successful the business will be.
Based on the results of your analyses, discuss whether the business will be as profitable as you first expected. Briefly explain why (or why not) and what can be done to improve the possible outcome.
Please upload your paper using a pdf format.