Draft a 3- to 4-page financial plan for Costco. This plan should include sections for a business case and profit-and-loss statements. Include the following items: A business case that includes a description, type of business, and sources of funding Note: Use your Wk 5 Assessment Prep: Business Case Research assignment and feedback. A profit-and-loss statement for a 3-year period Project revenue. State realistic assumptions, such as growth per year, in your projections. Estimate direct costs, including capital, marketing, labor, and supply costs. A conclusion that includes an explanation of what working through a financial plan can do for a larger company

Wk 5 Assessment Prep: Business Case Research Assignment

• Determine why funding is needed for the company.
  • Grow operations
  • Acquire new technology
  • Offer new goods and services
  • Hire extra staff
  • Make other investments

• Determine the sources of funding. Consider self-funding, borrowing, equity, venture capital, etc.
  • Self-funding: Costco made $4.2 billion in membership revenue in 2022.
    • Projected to make about $30 billion in gasoline for 2023
    • Food Court makes about $1 billion in sales a year
    • Profit from merchandise

• Very possible for Costco to have Angel investors or have venture capitalist.
  • Angel investor: help fund the business, in return want a partnership or an investor
  • Venture capitalist: enters during the middle of operation and funds business, in exchange they want to be a part of the company

• Evaluate the requirements of each funding source you determined appropriate.
  • Self-funding: have to acquire the sources for funding. Have to be committed to risking their own money
  • Angel Investor: Be willing to let a third party into the business
  • Venture Capitalist: Be willing to let a third party into the business,

• Analyze the associated risks of each funding source.
  • Self-funding: Risk of losing money, not making profit off of goods, and merchandise
  • Angel Investor: Losing your business to the third party
  • Venture Capitalist: Losing your business

• Decide which sources are the best fit for your company based on the requirements of each. Justify your decision.
  • The best fit is self-funding: The risk is low b/c the profits are coming from owners capital.
  • Costco makes money a large profit from membership fees and gas, and providing necessities for everyday life
  • Costco is operating effectively, management is good at funding its operations and having profit to achieve end of year goals.