Checkpoint- Financial Forecast

Checkpoint- Financial Forecast - coming cash flows using...

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Financial forecasting is all about estimating the future financial returns in lieu of a financial budget  of spending. For a brand new company fixed costs are very high, really need to fight over small issues in this  competitive business environment. Even variable cost is very high as low production in the beginning due to  low number of clients or customers hence it becomes very important for a brand new company to project or  forecast their financials because any loses in the beginning years of the business would simply loose the  For a family owned company, the reason more or less remains same for a family owned company  with an only difference that high credibility is expected here because the company runner is answerable to  other profit holders of company in the family. Therefore, financial forecasting gives a clear picture about the 
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Unformatted text preview: coming cash flows using capital budgeting methods. In contrast with long-standing corporation, such companies devote a very serious attention to financial forecasting because usually high cost involved short term & long term projects are at stake. they have previous years data of their financial statements & previous quarterly results which they use in evaluating how they have performed in the past what rate of return they are expecting in future with the projects lined up, how much tuned is there organization with the internal & external environmental conditions. What would be NPV & IRR of their projects? Because it’s not just the profits but it’s also the reputation of the company is at stake....
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This note was uploaded on 05/07/2010 for the course ACCOUNTING ACC225 taught by Professor Professor during the Spring '10 term at University of Phoenix.

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