Chapter 6

Chapter 6 - Financial Modeling for ShortTerm...

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Financial Modeling for Short- Term Decision-Making Maher 10e Chapter 6 1
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Learning Objectives 1. Describe the use of financial modeling for profit- planning purposes. 2. Explain how to perform cost-volume-profit (CVP) analysis. 3. Describe the use of spreadsheets in financial modeling. 4. Identify the effects of cost structure & operating leverage on the sensitivity of profit to changes in volume. 5. Explain how to use sales dollars as the measure of volume. 6. Explain the effect of taxes on financial modeling. 7. Describe the use of financial modeling in a multiple- product setting. 2
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Financial Modeling Financial modeling enables analysts to test the interaction of economic variables in a variety of settings. It requires analysts to develop a set of equations that represents a company’s operating & financial relations. 3
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The Cost-Volume-Profit Model The cost-volume-profit model, summarizes the effect of volume changes on an organization’s costs, revenues, and income.
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This note was uploaded on 01/14/2012 for the course ECON 121 taught by Professor Mcdevitt during the Winter '10 term at UCLA.

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Chapter 6 - Financial Modeling for ShortTerm...

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