to come up with effective operating capital forecasts i will carefully analyze my financial statements especially the income statement and the balance sheet to find out the crucial information i need to calculate the turnover rates

CAN YOU RESPOND 50-100 WORDS TO THIS STUDENT

In order to best forecast the required investment and operating capital for my business, I will need to properly understand how money flows in and out of my business. To understand the money flow through my business, I will carefully look at and understand the business’ working capital cycle( Barringer, 2015). Importantly, I will look at how quickly my current assets are turned into cash, how quick the cash is used to pay my current liabilities. I will keenly evaluate my turnover rates as the business’s previous turnover rates will help to effectively forecast my investment and operating capital needs.

What steps should be followed for that purpose?

To come up with effective operating capital forecasts, I will carefully analyze my financial statements, especially the income statement and the balance sheet to find out the crucial information I need to calculate the turnover rates. After properly calculating the turnover rates, I will make a projected income statement to get estimates of additional capital I will need to grow the business. Calculating the differences between the projected and historical balances for inventory, account receivable as well as accounts payable will help me to effectively understand the changes to operating capital and to make informed operating capital decisions.

What documents and analyses will be required to establish forecast credibility?

I will undertake serious variance analysis where I will carefully compare the actual financial statement (balance sheet, income statement and cash flow statements) to my projections. To have realistic and credible forecasts I will use my own industry experience and work with qualified accountant.

How would you attract needed investors?

To attract the needed investors I will do a thorough research on my investors- to-be, be realistic and clear in my pitch, prepare well-detailed marketing research and business plan, give them a possibility to participate in my business, show strong passion for my business and show a thorough understanding of my business ( Barringer, 2015). Besides, I will do effective networking, start with my family and friends and properly sell myself and my business.

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