chapter_17 - 17-1CHAPTER 17Financial Planning and...

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Unformatted text preview: 17-1CHAPTER 17Financial Planning and ForecastingForecasting salesProjecting the assets and internally generated fundsProjecting outside funds neededDeciding how to raise funds17-2Preliminary financial forecast:Balance sheets (Assets)20052006ECash and equivalents$ 20$ 25Accounts receivable240300Inventories240300Total current assets$ 500$ 625Net fixed assets500625Total assets$1,000$1,25017-3Preliminary financial forecast: Balance sheets (Liabilities and equity)20052006EAccts payable & accrued liab.$ 100$ 125Notes payable100190Total current liabilities200315Long-term debt100190Common stock500500Retained earnings200245Total liabilities & equity$1,000$1,25017-4Preliminary financial forecast: Income statements20052006ESales$2,000.0$2,500.0Less: Variable costs1,200.01,500.0 Fixed costs700.0875.0EBIT$100.0$125.0Interest16.016.0EBT$84.0$109.0Taxes (40%)33.643.6Net income$50.4$65.40Dividends (30% of NI)$15.12$19.62Addition to retained earnings$35.28$45.7817-5Key financial ratios20052006EInd AvgCommentBasic earning power10.00%10.00%20.00%PoorProfit margin2.52%2.62%4.00%PoorReturn on equity7.20%8.77%15.60%PoorDays sales outstanding43.8 days43.8 days32.0 daysPoorInventory turnover8.33x8.33x8....
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chapter_17 - 17-1CHAPTER 17Financial Planning and...

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