Whose done business management? Help!
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Topic: Whose done business management? Help!
Posted By: MissCandice
Subject: Whose done business management? Help!
Date Posted: 20 September 2007 at 9:00pm
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Hi,
Im doing a business management course.. My assignment is due tomorrow.. i had to write a preliminary evaluation of a proposed small business.. iv done that but they want me to do a projected return on investment and i wouldnt have a clue how to do this or where to begin? Anyone know how? Thanks Kandice ------------- ~ Mummy to a beautiful girl ~ |
Replies:
Posted By: ffudehtpu
Date Posted: 21 September 2007 at 9:50am
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Return on investment is the money you can expect back on capital used to start up teh business. Normally most start up business do not expect to see a ROE in the first 3-5 years. Basically if you have projected your income and expendture for the first 5 years in the business plan then uses this to calculate your anticipated profit, divide tis by the equity in the business and you get the return on investment, normally this would be referenced to money in bank return rates. ------------- http://lilypie.com"> 
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Posted By: ffudehtpu
Date Posted: 21 September 2007 at 9:51am
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on god i'm a geek ------------- http://lilypie.com">
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Posted By: MissCandice
Date Posted: 21 September 2007 at 9:57am
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oh god thats so over my head! ------------- ~ Mummy to a beautiful girl ~ |
Posted By: ffudehtpu
Date Posted: 21 September 2007 at 1:05pm
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ok work out how much money you think the business will make each year, then work out how much mone they are going to have to invest at the beginning to set the business up. divide the money you think it will make by the money they need to invest. Eg they will make $40K sales in the first year, there will be $35k expenses in the first year so te business will make $5K to set up the busiiness they need to buy xyz so will put in $100K (this is called equity) 5/100 = 5% return on investment for the first year. hope that helps ------------- http://lilypie.com">
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Posted By: MissCandice
Date Posted: 21 September 2007 at 2:54pm
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That is awesum thanks.. ------------- ~ Mummy to a beautiful girl ~ |