Sagot :
Sam is planning to open a pool cleaning business from his home. Sam's business will come with a set-up cost of $9,000 and an annual operational cost of $30,500. Sam anticipates an annual profit of $45,000 for the first year and expects profits to increase by 5.5% annually for the next 5 years. this is all information Sam should include in the financial analysis component of his business plan.
What is Financial Analysis?
Financial analysis is the process of assessing the performance and suitability of enterprises, projects, budgets, and other financial-related transactions. Financial analysis, if done internally, can assist fund managers in making future company decisions or looking back at historical trends for prior accomplishments. Financial research, when done externally, can assist investors in selecting the finest investment possibilities.
Financial analysis is used to assess economic trends, establish financial guidelines, create long-term corporate activity plans, and pinpoint potential investment opportunities. This is accomplished by combining financial data with numbers. Calculating ratios from the data in the financial statements to compare against those of other companies or against the company's own historical performance is one of the most popular methods for analyzing financial data.
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