Definitive Business Plan, Second Edition, The

Looking back

There is little need to dwell on how you find the historical figures that you need for your business plan. You just extract them from your records. The only warnings to consider are that sometimes:

• Summarized figures hide things. A $10000 increase in net fixed assets could conceal a $15000 acquisition and $5000 of depreciation.

• Policy decisions and changes in practices mislead. A decision to write-off a long-standing bad debt might suggest a reduction in assets when actually nothing fundamental has changed.

In other words, when moving through history to the current figures and on to forecasts, try to make sure that the numbers are presented consistently. Where a change in accounting policies causes lumpiness in the numbers, include ...