Financing Plan for Business Expansion

6.2.2 Based on the Cash Flow Statement, the total finance requirement to achieve a positive Closing Cash Balance has been determined to be \$500,000. To determine the ratio of Debt to Equity, let\'s assume a balanced approach with a 50:50 ratio, meaning 50% of the finance will come from Equity and...

6.2.2 Based on the Cash Flow Statement, the total finance requirement to achieve a positive Closing Cash Balance has been determined to be \$500,000. To determine the ratio of Debt to Equity, let\'s assume a balanced approach with a 50:50 ratio, meaning 50% of the finance will come from Equity and 50% from Debt. Now, let\'s complete the Financing Plan table: 6.2.3 **Prospective Source Types** **Prospective Sources** **%** **\$** ------------------------------ ------------------------- ------- ----------- Equity Tru Earth Investors 50% \$250,000 Debt Tru Earth Bank Loan 50% \$250,000 Total Finance Requirement 100% \$500,000 Planned Breakdown by Finance Types: - Equity: 50% -\> \$250,000 - Debt: 50% -\> \$250,000 This financing plan outlines the allocation of funds from Equity and Debt sources to meet the total finance requirement of \$500,000 for the planned business expansion.