Percentage of Sales Method

Percentage of Sales Method - 1 Finance 4310 Percent of...

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Unformatted text preview: 1 Finance 4310 Percent of Sales Technique The Cookbook Method Finding the EFR It is possible to avoid preparing the Pro • It is possible to avoid preparing the Pro Forma Balance Sheet and Income Statement. • The procedure can be reduced to a set of equations. 2 The Cookbook Equation i d ) f (O sheet. balance current the from Assets s Spontaneou Total SA : where Sales) ast DPR)(Forec- (NPM)(1- S Sales SL- NFA S Sales SA EFR = Δ Δ + Δ = Margin Profit Net NPM Assets. Fixed Net in change Forecast NFA Sales. s Period' Last- Sales Forecast S periods). recent from average an (Or sheet. balance current the from s Liabilitie s Spontaneou Total SL periods). recent from average an (Or = = Δ = Δ = Ratio Payout Dividend DPR = The Cookbook Equation R.E. to Addition Forecast- SL- NFA CA EFR : that Note Sales) ast DPR)(Forec- (NPM)(1- S Sales SL- NFA S Sales SA EFR Δ Δ + Δ = Δ Δ + Δ = li biliti t i change the by provided financing internal of amount the is term third The sales. of level...
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This note was uploaded on 02/24/2010 for the course FINA 4310 taught by Professor Impson during the Spring '10 term at North Texas.

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Percentage of Sales Method - 1 Finance 4310 Percent of...

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