Financial Forecasting

Financial Forecasting - a business may be determined by how...

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Running head: FINANCIAL FORECASTING 1 Financial Forecasting Cathy Bandelow Harvesting the Money Tree/FIN 200 01/13/2011 John Simulcik
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FINANCIAL FORECASTING 2 Financial Forecasting An essential component for the planned growth of a business is financial forecasting. A business using financial forecasting may be brand new, family-owned business, or an existing business. The future expansion of a business many be determined if feasible, in a financial forecast. A financial forecast can be adjusted by occurrences that have taken place within a business. Lending decisions are periodically based on financial statements derived from a financial forecast. Pro forma statements are an estimate of receivables, inventory, payables, borrowing needs, and projected profits. Pro forma statements are generally used as a guide by lenders in determining a forthcoming lending decision. A brand new business would benefit from preparing a financial forecast. Future budgets and investors in the business can rely heavily on a financial forecast. The continued operation of
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Unformatted text preview: a business may be determined by how the cash and other assets are to be maintained and used. A family-owned business requires a financial forecast to also determine how the cash and other assets are to be maintained and used. The principal owner of a family-owned business generally has a clear cut idea of the business capital position. A financial forecast is extremely important when personal assets and contributions are at stake. A long-standing corporation has an advantage over a brand new business and a family-owned business. A long-standing business can review previous financial forecasts and use those forecasts in preparing future plans. Goals are normally outlined with a financial forecast for a long-standing business. Exploring expansion, growth or to remain on a steady course are determined by the financial forecast. FINANCIAL FORECASTING 3 References Block-Hirt-Danielson. (2009). Foundations of Financial Management (13 th ed). The McGraw-Hill Companies....
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Financial Forecasting - a business may be determined by how...

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