Wi-Tribe Start-up Costing And Financial Analysis

 Expected Cash Flow Statement

One of the medium to showcase the good efforts applies by an entity in achieving all the targets in a stipulated time period in the form of higher profits. Profitability shows the hard work of an entity in attracting all the customers towards its entity (Narasimhan, 2017). Advertising and marketing expenses incurred by the firm is important weapon in generating higher profits. Marketing skills of marketing manager of WI-TRIBE converts potential user into regular and loyal customers mark good impression on all the external users of the markets.

Some assumptions added flavour in preparing income statements are supporting factors in determining the actual position of the concern. Depreciation charged on the purchase of computer at the rate of 15% for both the year 2018 and 2019 (Visvanathan, 2017).

One aspect of standard financial statement used in analyzing the financial position of an enterprise. Financial position identifies with the help of positional Statement in ascertaining the financial position of the business concern at different point of time as an individual prepare this statements twice or once in a financial year (Öztürk, 2017). It can be renowned as a financial track to keep watch on all the positive and negative side of the firm in the form of assets and liabilities. Assets show the income received by the business concern evaluates on various parameters and on another hand, liabilities depicts all the obligations of the business concern.

A current financial statement is for Wi-tribe entities, who initiate their new business of providing high speed internet service through the development of applications. The business idea of this new business is to start an application to provide data extracted from the website to facilitate all the users (Kim, Schmidgall & Damitio, 2017). There are different competitors in the market who operates similar kinds of business to give the tough fight to WI-TRIBE business. A balance sheet of this entity targets all the costs and incomes involved in an entity. Identifying all the costs is essential to control the expenses to increase the potential of an entity. On the contrary to this, assets and income received by the firm is identifies with the help of balance sheets to compensate higher costs and expenses incurred in a firm.

Unique concept used by an entity to know its current as well as future position to survive in the external market called as breakeven point method. Compatibility of business intelligence has tested by an individual by determining this point to ensure its longer survival. According to this concept, a sales unit produced by the firm surpasses this level to earn the desired profit within a stipulated time period (Kim, Jang, Gao, Kim, Chung & Bang, 2017).

It is a journey of exploring ways to boost the overall profitability by determining desired profits per unit. Formula of the break-even point depicts the importance of fixed costs and contribution margin. These two factors play an integral role in reaching the desired destination of ascertaining the break-even point higher than the actual sales units to show the profit part.

Fixed costs total used in calculating the break-even point and contribution margin will be calculated per unit. Variable costs has deducted from the overall sales revenue to ascertain the amount of contribution margin per unit. Variable costs changes according to the changes takes places in the entire units produced by the firm in a financial year.

Two kinds of costs incurred in an entity are fixed and variable costs that can be controllable or non-controllable. These two costs fluctuate with the overall production in a business entity. Fixed cost is not under the control of the venture as it remains the same in both zero as well as higher production of the business enterprise.

Nowadays, competition has increased in the market will eliminate on initial stage by identifying the strength of the firm. This measure has used by the firm to identify the capacity of the enterprise after achieving the actual breakeven point. This concept shows the maximum amount of profit earned by an entity in the future by considering all the factors for the betterment of the business concern. Sustainable competitive advantage can attain by the corporation by emphasizing on important aspects of the business concern.

Operating business without earning the profit is waste of time and energy of an entity owner as profit element is an integral aspect of the business. The efficiency of the business reflects in changing profit of the business concern. Alteration in the selling price will induce the entire business profits. With the help of higher profit, an image of an entity can get increase in front of all the external users by grabbing their attention towards the business. Their positive response towards an entity will be beneficial for the firm in achieving all the targets within a stipulated deadline offer by the customers (Morano & Tajani, 2017).

After analyzing the financial position of WI-TRIBE, investment needs of the firm has categorized into four levels. Four stages of determining the investment needs include basic contingency funds, term insurance, future long-term goals and future short term goals.

Personal savings of an entity owner comes under this category to meet the future uncertainty which, in turn, increases the income potential of the firm. In today’s world, protection of the wealth of an individual is requiring to beat all the competitors. Term insurance protects the income of the firm by segregates their obligations into three categories of short term, medium term, and long-term. Higher expenses incurred in an entity needs to control and improve the condition of the business. Subletting use by the firm to compensate the higher expenses in the form of rent of an enterprise.

Funding of business

WI-TRIBE needs finance to meet their uncertain needs of an enterprise as without finance, the existence of the business is not possible. Through crowd funding, small proportions of finance will raise from large number of people to meet all the desired needs of the business. This practice has used by an entrepreneur who intends to start their business on their own. Donation based crowd funding use by firm under which; large number proof individuals collectively raise money for charitable trusts to support the social cause.

Worth of the current business of WI-TRIBE will determine on the overall sales and the revenue generated by an entity. An income statement shows 50% increase in sales from 2018-2019 which is use as an increasing trend till the passage of 5 years.

Kim, M., Schmidgall, R. S., & Damitio, J. W. (2017). Key Managerial Accounting Skills for Lodging Industry Managers: The Third Phase of a Repeated Cross-Sectional Study. International Journal of Hospitality & Tourism Administration. 18(1). 23-40.

Kim, S., Jang, H., Gao, R., Kim, C., Chung, Y., & Bang, S. (2017). Break-Even Point Analysis of Sodium-Cooled Fast Reactor Capital Investment Cost Comparing the Direct Disposal Option and Pyro-Sodium-Cooled Fast Reactor Nuclear Fuel Cycle Option in Korea. Sustainability. 9(9). 1518.

Morano, P., & Tajani, F. (2017). The break-even analysis applied to urban renewal investments: A model to evaluate the share of social housing financially sustainable for private investors. Habitat International. 59. 10-20.

Narasimhan, M. S. (2017). Income Statement.

Öztürk, C. (2017). The role and current status of IFRS in the completion of national accounting rules–Evidence from Turkey. Accounting in Europe, 1-9.

Visvanathan, G. (2017). Intangible assets on the balance sheet and audit fees. International Journal of Disclosure and Governance. 14(3). 241-250.