Chapter 16 - CHAPTER 16 Financial Planning and Forecasting...

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    16-1 CHAPTER 16 Financial Planning and Forecasting Forecasting sales Projecting the assets and internally  generated funds Projecting outside funds needed Deciding how to raise funds
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    16-2 Preliminary financial forecast: Balance sheets (Assets) 2005 2006E Cash and equivalents $    20 $    25 Accounts receivable 240 300 Inventories 240 300 Total current assets $  500 $  625 Net fixed assets 500 625 Total assets $1,000 $1,250
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    16-3 Preliminary financial forecast:  Balance sheets (Liabilities and  equity) 2005 2006E $   100 $   125 Notes payable 100 190 Total current liabilities 200 315 Long-term debt 100 190 Common stock 500 500 Retained earnings 200 245 $1,000 $1,250
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    16-4 Preliminary financial forecast:  Income statements 2005 2006E Sales $2,000.0 $2,500.0 Less: Variable costs 1,200.0 1,500.0         Fixed costs 700.0 875.0 EBIT $100.0 $125.0 Interest 16.0 16.0 EBT $84.0 $109.0 Taxes (40%) 33.6 43.6 Net income $50.4 $65.40 Dividends (30% of NI) $15.12 $19.62 Addition to retained earnings $35.28 $45.78
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    16-5 Key financial ratios 2005 2006E Ind Avg Comment Basic earning power 10.00% 10.00% 20.00% Poor Profit margin 2.52% 2.62% 4.00% Poor Return on equity
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This note was uploaded on 09/08/2010 for the course BUS 170 at San Jose State University .

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Chapter 16 - CHAPTER 16 Financial Planning and Forecasting...

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