Yorkshire Building Society Financial Plan Analysis



In our endeavour to continue being the most financial services providers, we plan to diversify our line of business to home furnishings. In order to strategically approach this matter, as the Financial Director of Yorkshire Building Society, the Board asked me to prepare a financial plan for the next three years. The financial planning process I took was designed to forecast future financial results from the intended business venture and to determine how Yorkshire Building Society would best use its financial resources in pursuit of this objective. Since financial planning entails looking well into the future, the process called for a creative thinking and analytical process. From the concerted effort, I made during financial planning and subsequently presenting this report to you, presents Yorkshire Building Society with an opportunity to grow its revenues at a more accelerated pace. Through this financial plan, you have been presented with the numerical logic for decision making. In addition, it serves to show the Yorkshire Building Society’s Board where the need to employ its resources for maximum returns and costs management. Through efficient financial management, Yorkshire Building Society, through its Board, will be able to set aside enough funds for marketing this new venture, expanding its operations to bring about more growth. Through this plan, I specifically addressed the required start-up costs, breakeven analysis, forecasted profit and loss, forecasted cash flow, and projected balance sheet. Additionally, financial ratios were conducted to show the expected performance.

Start-Up Costs

Having a good financial plan is a good starting point for answering the critical and fundamental questions on how much it will cost Yorkshire Building Society to get the venture started. The plan by Yorkshire Building Society to start a new business requires that it determines its budgetary needs in a critical manner. Since every business is unique from each other, it has its particular monetary needs at various stages of it development. In estimating the initial capital outlay, I considered the size of our company since there does not exist any universal approach for estimating the start-up costs. Some investment would require considerable investment in equipment and inventory. Additionally, there will be costs involved in the acquisition of the new store in Leeds. Some of the costs that Yorkshire Building Society will incur will be one-off costs as is the case with the new store and the fee for the new venture. Other costs will be ongoing costs, such as the insurance, utilities and inventory for sale. In identifying these costs, I considered whether they were essential or optional since a realistic start-up budget should consider only those items deemed necessary to start a business. Primarily, the start-up costs can broadly be classified into the variable and fixed. Among the fixed costs include the extra administrative costs, insurance, and utilities while variable costs would include shipping and packaging costs, inventory costs, sales commissions, and agents’ fees.

Yorkshire Building Society Financial Plan Analysis

  • Tracy, A., 2012. Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyse Any Business on the Planet. RatioAnalysis.net.