Introduction - I- Introduction As we know, businesses...

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I- Introduction As we know, businesses develop budgets and business plans to ensure optimum financial performance. An important element of budgeting and planning is financial forecasting. The financial forecasting allows financial managers to anticipate events before they occur, particularly the need for raising funds externally. Forecasting the finances of a business requires certain understanding of financial dynamics. One of the most important considerations is that business growth may call for additional sources of financing because profit may be inadequate to cover the net build up in research and development, inventory, labor and other asset accounts. When forecasting, one must take into account for these items, plus payables, and other corporate accounts versus anticipated profits and borrowing requirements. From this data collection financial mangers must strategically plan the management of their business or suffer profit loss and loss of investors. Shareholders want their return on investment to be maximized by the corporation in the future as well as the present. Poor strategic planning will result in loss of investors driving the stock prices of a company downward. When companies release their quarterly or annual forecast for profits, investors use this information as a tool to plan their investment. Relying on the company to meet their projected forecast or better. When lower profit warnings are issued at the end of the reporting period, investors become nervous and trade their stocks to reduce their risk of loss. With outstanding shares un-purchased the company loses their working capital and in turn forces the price of the stock to drop even further. Profits alone may not to be enough to sustain a business, companies need to raise capital. By strategically planning on how to successfully to meet their goals and maximize shareholder wealth, companies
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will continue to grow. This paper will examine the necessary steps for financial forecasting, important elements of projecting future growth, types and methods of financing capital requirements, the impact of changes in interest rates and dividend payouts, alternatives used develop to capital financing and then impact on debt ration and equity. These steps effect the planning and budgeting process that Riordan Manufacturing needs to follow in order that they maintain the company in a sustained growth pattern. II- Overview Riordan Manufacturing Incorporation is the transformation of Riordan Plastic, Inc. The firm was founded in 1991 by Dr. Riordan in response to the commercial application of Research and Development in processing polymers. Riordan Manufacturing is a world class manufacturer of plastics; which employs 550 people, with a projected annual earnings of $46 million. With total annual revenues in excess of $1 billion, Riordan Industries has entered into the Fortune 1000 Enterprise distinction. Its primary product is plastic beverage containers produced at its plant in Albany, Georgia. The company also
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Introduction - I- Introduction As we know, businesses...

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