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ch 17 - Chapter17 Forecasting ForecastingSales...

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Financial Planning and  Forecasting Chapter 17 Forecasting Sales Projecting the Assets and Internally  Generated Funds Projecting Outside Funds Needed Deciding How to Raise Funds 17-1
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Preliminary Financial Forecast: Balance Sheets (Assets) 2008 2009E 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 17-2
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Preliminary Financial Forecast: Balance  Sheets (Liabilities and Equity) 2008 2009E Accts payable & accrued liab. $   100 $   125 Notes payable      100       190 Total current liabilities 200 315 Long-term debt 100 190 Common stock 500 500 Retained earnings       200       245 Total liabilities & equity $1,000 $1,250 17-3
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Preliminary Financial Forecast:  Income Statements 2008 2009E 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 17-4
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Key Financial Ratios 2008 2009E Ind Avg Comment Basic earning power 10.00% 10.00% 20.00% Poor Profit margin 2.52% 2.62%
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