Forecasting Slides

Forecasting Slides - Financial Statement Forecasting with...

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Financial Statement Forecasting with the Percent of Sales Method
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Financial Planning and Pro Forma Statements Three important uses: Forecast the amount of external financing that will be required Evaluate the impact that changes in the operating plan have on the value of the firm Set appropriate targets for compensation plans
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Steps in Financial Forecasting Forecast sales Project the assets needed to support sales Project internally generated funds Project outside funds needed Decide how to raise funds See effects of plan on ratios and stock price
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2003 Balance Sheet (Millions of $) $ 20 accruals $ 100 Accounts rec. 240 Notes payable 100 Inventories 240 Total CL $ 200 Total CA $ 500 L-T debt 100 Common stk 500 Net fixed assets Retained earnings 200 Total assets $1,000 Total claims $1,000 500
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2003 Income Statement (Millions of $) Sales $2,000.00 Less: COGS (60%) 1,200.00 SGA costs 700.00 EBIT $ 100.00 Interest 10.00 EBT $ 90.00 Taxes (40%) 36.00 Net income $ 54.00 Dividends (40%) $21.60 Add’n to RE $32.40
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This note was uploaded on 04/16/2008 for the course GB 301 taught by Professor O'brien during the Spring '07 term at Bentley.

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Forecasting Slides - Financial Statement Forecasting with...

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