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Lesson 17
Financial Feasibility
A financial feasibility is an assessment of the financial aspects of something. If this case, for starting and running a business. It considers many things including start-up capital, expenses, revenues, and investor income and disbursements.
Financial Feasibility
A study on whether a project is viable after taking into consideration its total costs and probable revenues. If the revenues cover the costs of the project, then the project is visible.
Financial Feasibility
For instance, The cost of expanding production will entail $500,000; however, the expected increase in revenue will be $1,000,000. Thus, the project is feasible as its revenue more than cover its costs.
Financial Feasibility
In case of a new project, financial viability can be judged on the following parameters: Total estimated cost of the project Financing of the project in terms of its capital structure, debt equity ratio and promoter's share of total cost Existing investment by the promoter in any other business Projected cash flow and profitability
Financial Statement
A financial statement is a formal record of the financial activities of a business, person, or other entity. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements
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2. Financial resources and other costs
Financial resources could be categorized on the basis of periodicity into: Short term resources: (those payable in a year). Trade credit supplies, short term loans from backs or other lending institutions, sales of account receivable etc. belong to this category.
Term Loans: Intermediate term loans are those available for one to three (sometimes five) years. It includes terms loans from banks, lease finance, financial assistance from institutions etc.
loans Long-term loans are those from banks, equity capital and investments of earnings.
Financial Cost
Financial costs incorporate expenses that a company incurs through operations, from factory costs to surcharges down the supply chain. Examples include the cost of raw materials, semi finished products and completely finished goods along with administrative expenses, such as rent, salaries, insurance and utilities.