Problem Day Forecasting 1.30.2012 v3.1

Problem Day Forecasting 1.30.2012 v3.1 - Problem Day:...

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Unformatted text preview: Problem Day: Financial Forecasting Housekeeping Items New Quiz Time Deadlines o POWs 10pm o Reading quizzes 11am Phillips Petroleum POW Quiz due Tuesday at 10pm Ch. 5 Reading Quiz due Wed morning by 11am Bring your calculator next week! TA email: Busm301@gmail.com o POW Helps EPS = Net Income / Outstanding Common Shares o Use 1992 # of shares Common Equity includes RE o (Hint: New RE = Old RE + New NI Dividends) Averages o Calculate the ratio for each year and then average the years Todays Agenda Prayer Careers in Finance Review of ROE Cash Budgeting Forecasting o Percent of Sales Method Careers in Finance Banking Investment & Commercial Debt / Equity issuance Advisory services M & A Capital restructuring Mega $ corporate transactions NYC, San Francisco Corporate Finance Financial accounting Financial planning and analysis Consulting PWC, Accenture Combine strategy & finance Gain variety of experience and skills Fund Management Venture Capital Private Equity Mutual Funds Hedge Funds Private Wealth Management Tales From a Financial Analyst Sales increasing Net Income increasing But No Cash! How Do the Balance Sheet and Income Statement Tie Together? Balance Sheet Assets = Liabilities + Owners Equity What happens if net income increases? Owners Equity increases! If Owners Equity increases, what else must increase? An Asset! Typically accounts receivable Income Statement: Sales- Expenses Net Income Terminology Item 1 Synonym Operating Income Net Receivables Net Income Total Debt PP&E COGS SG&A P&L EBIT or Operating Profit Accounts Receivable Net Profit or Net Loss Total Liabilities Property, Plant & Equip. Cost of Goods Sold Selling, General, & Admin. Profit & Loss ROE Leverage Multiplier Revisit Assets $1mm Liabilities $500k Equity $500k = Assets $1mm = Liabilities $800k Equity $200k ROE = 50 / 500 = 10% Net Income = $50k ROE = 50 / 200 = 25% The same amount of net income is available to less equity holders. We changed nothing in the firm except how its financed! Cash Budget Cobra Kai collects 60% of its sales during the month of the sale, 30% one month after the sale, and 10% two months after the sale. The company expects sales of $10,000 in August, $20,000 in September, $30,000 in October, and $40,000 in November. How much money does Cobra Kai expect to collect in October?...
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This note was uploaded on 02/17/2012 for the course FINANCE 301 taught by Professor Jimbrau during the Winter '12 term at BYU.

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Problem Day Forecasting 1.30.2012 v3.1 - Problem Day:...

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