General Setting
In this section, we will configure the general parameters of the financial model.
The parameters to be configured include:
Business name: The name of the business.
Start month: The month when the plan begins.
Start year: The year when the plan begins.
Duration: The duration of the plan. Typically, this is either 3 years or 5 years.
Starting cash balance: The initial cash balance. For new businesses, this is the amount of capital initially contributed by shareholders. For existing businesses, this represents the current cash available. Currently, the model only supports new businesses, and this value is usually the initial capital contributed by shareholders.
Status: The status of the business. There are two statuses: Active and Inactive. An Active status means the business is currently operating, while Inactive means the business is not in operation.
Business industry: The industry sector of the business. You can choose from a list of predefined and common sectors such as Retail, Manufacturing, Service, Construction, Real estate, Wholesale, Agriculture, Mining, Transportation, Finance, Insurance, etc.
Income tax rate: Corporate income tax. Typically, this is 20% or 25%.
Payroll tax rate: Personal income tax. Typically, this is 10% or 15%.
Currency: The currency unit. Currently, the model only supports common currencies such as USD, EUR, GBP, etc.
In this section, the most critical parameters to pay attention to are:
Duration: The choice of plan duration determines the amount of data the model will generate. For example, choosing 3 years means the model will generate data for the next 3 years. Choosing 5 years means the model will produce data for the next 5 years.
Starting Cash Balance: This is an important parameter because it affects whether the model can predict the financial situation of the business over a long period. If the initial cash balance is too low, the model will present many situations that are not consistent with reality. For example, if the initial cash is too low and the investment in initial assets is too high, users may need to adjust by adding more capital through borrowing or new investment.
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