韩山师范学院财务管理课件第四章 Financial Forecasting.ppt

Chapter 4 Financial Forecasting Chapter 4 - Outline LT 4-1 What is Financial Forecasting? 2 Methods of Financial Forecasting 3 Financial Statements for Forecasting Steps in a Pro Forma Income Statement (I/S) Determining Production Requirements Percent-of-Sales Method What is Financial Forecasting? LT 4-2 Financial forecasting is looking ahead to develop a financial plan for the future Very important for the strategic growth of a firm 2 Methods of Financial Forecasting: LT 4-3 – Using Pro Forma, or Projected, Financial Statements (more exact, time consuming) – Percent-of-Sales Method (less precise, easier to calculate) Often times these statements are required by lenders 3 Financial Statements forForecasting LT 4-4 Pro Forma Income Statement (I/S) Cash Budget Pro Forma Balance Sheet (B/S) The first step is to develop a sales projection Steps in a Pro FormaIncome Statement (I/S) Establish a sales projection Determine a production schedule (or production requirements) Compute other expenses Determine profit by completing an actual pro forma income statement (I/S) Determining ProductionRequirements LT 4-6 Projected Units Sales PLUS Desired Ending Inventory (EI) MINUS Beginning Inventory (BI) EQUALS Production Requirements (or Units to be Produced) Percent-of-Sales Method LT 4-7 A short-cut, less exact, easier method of determining financing needs (The “quick and dirty” approach) Assumes that B/S accounts will maintain a constant percentage relationship to sales Assets / Current Sales = % of Sales McGraw-Hill/Irwin ? 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PPT 4-1 FIGURE 4-1 Developmentof pro formastatements PPT 4-2 TABLE 4-1 Projected wheel andcaster sales (first sixmonths, 2005) PPT 4-3 TABLE 4-2 Stock of beginninginventory PPT 4-3 TABLE 4-3 Productionrequirements for sixmonths PPT 4-3 TABLE 4-4 Unit costs PPT 4-3 TABLE 4-5 Total production costs PPT 4-3 TABLE 4-6 Allocation of