Articles

Capital Planning

http://millennium-mgt.net/index.php/strategies/small-business/starting-up?id=100

Capital Planning, Finance, and Risk Management are central finance tasks universal to all companies. Every business must comply with proper financial, accounting and risk management principles, and meet legal requirements, while ensuring the proper capitalization, capital structure, cash flow, and profits needed to sustain business growth and satisfy investors.

We provide comprehensive executable strategies, using proprietary finance models to analyze finance and capital decisions in light of performance, liquidity, profitability, and sustainable growth rate to forecast capital Strengths, Weaknesses, Opportunities, and Threats. We design also customized IT systems and programs for complete solutions to capital planning challenges. Our Capital Planning Strategy emphasizes several critical components including:

Capital Structuring | Asset Optimization | Finance | Taxation | Accounting | Investment Management | Risk Control | Governance | Resource Allocation

Capital and Finance planning determines how a business will achieve its strategic goals and objectives while managing risk. Capital and Finance plans should be created immediately after enterprise mission, vision, and objectives have been set. The Capital Plan highlights capital structure, debt equity ratio, assets, capital expenditures, exit strategies, etc., While the Finance Plan describes each of the activities, resources, equipment and materials needed to achieve objectives, as well as the time frames involved. Our Capital Plan includes:

* Assessing the business environment

* Confirming business vision and objectives

* Identifying the types of resources needed to achieve objectives

* Quantifying amounts of resources (labor, equipment, materials)

* Calculating the total cost of each type of resource

* Summarizing costs to implement a budget

* Identifying any risks and issues with the agreed upon budget

* Capital Sourcing with Debt/Equity Structuring -Restructuring


Creating an accurate Finance and Capital Control Plan is critical to the success of any organization. It provides the enterprise with rigor by confirming that the objectives set are achievable from a financial perspective. It also helps the CFO, CEO and the Board to set financial targets for the organization, and reward staff for meeting objectives within the budget set. Our finance capital planning program involves three categories:

Finance Management Strategy | Finance Management Objective | The Capital Planning and Budget Cycle

The financial plan includes three primary financial statements (balance sheet, income statement, and cash flow statement) that are created within a business plan. We develop financial statements, forecasts, models, and plans including annual projections of income and expenses for your company, division or department. Your finance plan is an estimation of cash needs, a decision on how to raise the cash, such as through activities like sales and marketing, borrowing or issuing additional shares in a company. While a financial plan refers to estimating future income, expenses and assets, a finance plan refers to the means by which cash will be acquired to cover capital investments and future expenses, for instance through earning, borrowing or using saved cash.

CAPITAL STRUCTURE AND SOURCING

Structuring and securing capital for growth is among the most important business activities, yet one that most companies do infrequently. Restructuring a company's current capital base is even less familiar territory for most businesses. Millennium will assist with the development of a long-term capital plan and exploit its network of sources and relationships to begin executing the plan. To define and meet your capital needs our service encompasses:

  • Defining and developing finance plans and related economic, financial and capital components
  • Evaluate capital structures and alternatives to improve liquidity while supporting long-term growth.
  • Identifying financial institutions and other capital sources that are well-matched with your business model and needs.
  • Facilitate initial investor introductions and meetings.
  • Assemble and share your 'financial story' in a way that is both meaningful and compelling.
  • Negotiate with stakeholders to restructure existing debt, equity and other corporate liabilities.
  • Explore venture capital, strategic partnerships, joint ventures and alternative capital resources.
  • Advise and assist with the management of existing investor / banking relationships.
  • CAPITAL PLAN MODEL

    We develop integrated customized reliable capital plan models, ensuring consistency between the Capital and Finance Plans. This allows optimizing the cost of capital, greater ROI, Improved ROA, real time monitoring of KPI'S, conducting cost/performance analysis, review of internal and external reporting procedures, efficiency reviews, capital budgeting, and reference class forecasting. Features of our finance plans are used for ratio analysis including:

    Income statement (Profit & Loss) monthly & quarterly (3 years) - with automated discounts & returns, bad debts and losses & thefts.

    Income statement 3-5 years with EBITDA and EPS details

    Cash flow projection M and Q (3 years) - direct method used

    Cash flow projection annual (5 years)

    Balance sheet projection monthly (3 years)

    Balance sheet projection annual (5 years) - with no. of shares issued and net asset value per share details

    Notes to the financial statements - with automated data from the projections

    Tax account - sales tax, income tax

    Inventory account (5 years)

    Historic ratios (3 years)

    Projected ratios (5 years) - including IRR/NPV, SGR, OCF, FCF, Z-score for business valuation

    Industry standards comparison (5 years)

    Loan capacity ratios (5 years)

    Annual summary matrix (balanced scorecard) - beginning balance, income statement, cash flow, ending balance (5 years)

    Best/Worst case scenarios (Sensitivity analysis) (5 years)

    Comparison analysis - personnel, sales, advertising, income, cash flow, balance sheet (5 years)

    Advertising & promotion plan detailed (3 years), annual (5 years)

    Annual ROA / ROE / SGR dynamic analysis tree (5 years)

    Annual WACC / EVA dynamic analysis trees (5 years)

    Detailed break-even analysis per product line with break-even charts per product line

    Annual dynamic What-If analysis (5 years)

    Financial summary with CAGR (5 years)

    Revenue analysis per product line (5 years)

    Annual summarized projections (income statement, cash flow, balance sheet, ratios) up to 10 years

    Line of Credit (Overdraft) scenarios

    Executive dashboard timeline (3 years)

    Exchange rate multiplier

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    Call us to discuss capital planning strategies for asset optimization, investment, superior ROI, working capital management, and improved financial efficiency. We provide technical implementation for all planning initiatives to satisfy GAAP, SEC Regulations, Investor Relations, financial reporting, feasibility, profitability, income, financial statement, and ratio analysis.