Financial Forecasting参考.ppt

Financial Forecasting 4 Chapter 4 - Outline What is Financial Forecasting? 3 Financial Statements for Forecasting Determining Production Requirements 2 Methods of Financial Forecasting Percent-of-Sales Method Methods to determine the amount of new funds required in advance What is Financial Forecasting? LT 4-2 Financial forecasting is looking ahead to develop a financial plan for the future Provides lead time to make necessary adjustments before actual events occur Helps to plan for significant growth in firm Can be used as a target for measuring performance Often required by bankers and other lenders 3 Financial Statements for Forecasting Pro Forma Income Statement (I/S) Cash Budget Pro Forma Balance Sheet (B/S) The first step is to develop a sales projection Development of Pro Forma Statements Development of pro forma statements Establish a sales projection Forecast economic conditions Survey sales personnel Determine production needs, COGs, and gross profit Determine units to be produced Determine the cost of producing the units Compute cost of goods sold Compute gross profit Compute other expenses General and administrative Interest expense Finally construct the pro forma income statement Establish a Sales Projection Let us assume Goldman Corporation has two primary products: wheels and casters Determining Production Requirements LT 4-4 Projected Units Sales PLUS Desired Ending Inventory (EI) MINUS Beginning Inventory (BI) EQUALS Production Requirements (or Units to be Produced) Stock of Beginning Inventory Number of units produced will depend on beginning inventory Production Requirements for Six Months Unit Costs Cost to produce each unit: Total Production Costs Cost of Goods Sold Costs associated with units sold during the time period Assumptions for the illustration: FIFO accounting is used First allocates the cost of current sales to beginning inventory Then to goods manufactured during the period Allocation of Manu