Financial Objectives And Analysis For Music Application Start-Up Essay.

In addition to discipline knowledge, skills and their application, the study of this unit is intended to contribute to students developing the capabilities needed to be:  
GC1. Adaptable and capable 21st century citizens, who can communicate effectively, work collaboratively, think critically and 
solve complex problems. 
Identifying, anticipating and solving problems ranging from simple to important, complex and unpredictable problems. 
By identifying and managing the risks associated with initiating a real word entrepreneurial initiative, students will receive formative feedback from peers and the teacher during the semester when making and implementing decisions. 
Confident, creative lifelong learners who can use their understanding of themselves and others to achieve their goals in 
work and learning. 
Understanding how to initiate and develop new ideas. 
Decision making.  
through a reflective practice model for career planning (which includes roles, responsibilities and professional boundaries), students will reflect on their personal skills, attributes, interests and motivations as they initiate and 
implement a real world entrepreneurial initiative. They will be provided with structured feedback from peers and 
the teacher to complement and refine their personal insights in relation to their study and career choices.  
Responsible and ethical citizens who use their inter-cultural understanding to contribute to their local and global communities. 
This unit offers students the opportunity to further their development as responsible and ethical citizens contributing to local and global communities through the development of a socially responsible entrepreneurial activity which will contribute to the advancement of a more sustainable community. Students work in teams to initiate and execute an entrepreneurial activity appropriate to the business and the community in which the business operates to meet the needs of a community orientated, socially responsible business challenge. 
Students presenting their results, reflect on individual and corporate citizenship and the intricacies of balancing individual and public good. They receive both peer and teacher feedback about ‘capability’ development and through their presentation to sponsor/clients obtain feedback from practicing professionals.

Financial Objectives

In every business organizations, the Finance part is one of the major parts as the success of the business organizations largely depends on the financial performance of the companies (Brigham and Houston 2012). There is not any exception of this fact in case of the new business organizations or the start ups. For the start up businesses, the finance part is one of the major aspects as the owners of the new companies need to chalk out the financial plan for their businesses in the most optimal way. In this context, it needs to be mentioned that the start up businesses do not have any access in the capital market and for this reason, they have to depend on outside investors for their required capital for business (Brigham and Ehrhardt 2013). Hence, it can be said that the new start up businesses do not have unlimited capital to establish their businesses. In the presence of limited capital, it is the utmost responsibility of the owners of the companies to allocate the total amount of capita among all business operations in such a way so that there is not any shortage of capital. The same situation is applicable for this particular business of launching the music application. From the provide situation, it can be seen that the owners of the business have access to the limited amount of capital (Higgins 2012). Thus, as per the earlier discussion, it is important for them to plan the financial aspects f the business in the most perfect way. For this reason, it is needed for this new business to have some specific financial objectives as it is needed for their financial planning. Financial objectives provide the business organizations with necessary directions to achieve their financial goals. In this case, the financial objectives of this business are mentioned below:

• The first financial objective is to earn enough amount of money with the help of their business operations. This is considered as one of the major financial objectives as earning revenues will help the company to pay all of their short-term as well as long-term business obligations. e In this context, it needs to be mentioned that the owners of new businesses have to take some loans from banks or other financial institutions. Earning revenues helps them to timely make the interest payments of these loans (Brigham 2014).
• The second objective is to earn the estimated percentage of net profit from the business after paying the interests, depreciation and loans for the financial years. It is important for the companies to maintain a certain percentage of profit for the survival of their businesses (Oikonomou, Brooks and Pavelin 2012).
• The third major financial objective of this business is to gain the highest amount of market share in this particular industry with the help of effective business performance. It can be considered as the overall financial objective of this particular business. With the help of maximum proportion of market share, the company will be able to maximize its revenue and profitability in the near future (Gundersen and Garasky 2012).

Thus, from the above discussion, it can be seen that these are the three major financial objectives of the new business of music application. These financial objectives will provide the company with necessary directions to achieve their financial goals.

 Break-Even Analysis:

The above table shows the details about the initial funding and start-up cost of the company. From the above table, it can be seen that there are some specific need for non-current assets for the company. The required non-current assets of the company are office premise, machinery, equipments, furniture, office equipments and others. Thus, in order to arrange all of these non-current liabilities, it is required to have specific amount of capital (Michalski 2013). In addition, as per the above table, there is a need for start-up capital as well for setting p the business. The startup cost includes cost for permits, business plan and others. Apart from this, there is a need for working capital to meet the current obligations of the business. The above table shows all the details about the working capital requirement of the new business. Thus, based on the above table, it can be said that the company has to divide their capital in the above-mentioned form so that there is not any wastage of resources (Michalski 2013).  The above table includes the details about the selling price, variable costs, fixed costs and contribution margin of the new business. From the above table, it can be seen that the selling price is $27.919. After that, the above calculation show that the total variable cost per unit is $14.857.

Start-Up Cost for the Year

The above table also shows the fact that the total amount of fixed cost of the business is $92,432. Hence, it can be seen that the above tables have all the required details about the financial aspect of the new business. With the help of this, the owner of the new business will be able to avoid any kind of shortage of financial resources of the company (Oikonomou, Brooks and Pavelin 2012).

 Balance Sheet:

The financial objective of the business is to gain an in depth understanding of the financial statement of the in order to reflect the true financial statement of the company. The financial statement has been prepared so that the business could generate profit in the foreseeable future. The profit and loss statement has been prepared to keep the track business in order to determine that the likely profit that a business is anticipated to generate. The numbers derived from the financial statement clearly provides the understanding of the best case scenario of the business. The financial report comprises of the cash flow statement that has been prepared to understand the business over the given time period. The ultimate objective of the financial report is understand the net inflow and outflow of cash. Additionally, the financial objective of preparing such statement is to understand the scenario of the cash draining activities.    

The total amount of finance that is required for the startup fund is $150,000 with owners contributions of $100,000 and a sum of $50,000 will be required to meet the additional capital requirements. The startup assets will be comprising of the assets in the form of Computers, furniture, vehicles and equipment’s that primarily forms the part of the Start-up assets.

The business plan provides list of expenditure that are necessarily incurred in the performance of the business activities. The cost of goods sold is the category of expenditure that is related to production of the service. The cost of goods sold represents that the cost that is directly involved in delivering the service. These cost comprises of the keeping the product running for the customers. The company anticipates incurring additional cost relating to hosting and storage related expenditure for having a large customer base. Marketing cost covers all the marketing expenses such as advertising in the magazine, newspaper, television and events.

The business also incurs expenditure on payroll for its personnel in the form of salaries and wages. Cost that have been incurred are in line with the website hosting cost such as computer, material, office furniture etc. The business also incurs cost on dues and subscription as the business wants to be in compliance with the latest technologies and trends by subscribing to both the offline print magazines. Further cost such as administrative cost and insurance are under the purview of the running activities of the main company.

References

Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage Learning.

Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage Learning.

Brigham, E.F., 2014. Financial management theory and practice. Atlantic Publishers & Distri.

Gundersen, C.G. and Garasky, S.B., 2012. Financial management skills are associated with food insecurity in a sample of households with children in the United States. The Journal of nutrition, 142(10), pp.1865-1870.

Higgins, R.C., 2012. Analysis for financial management. McGraw-Hill/Irwin.

Michalski, G., 2013. Portfolio management approach in trade credit decision making. arXiv preprint arXiv:1301.3823.

Oikonomou, I., Brooks, C. and Pavelin, S., 2012. The impact of corporate social performance on financial risk and utility: A longitudinal analysis. Financial Management, 41(2), pp.483-515.