10-1 Chapter Ten Financial Projections Dr. Bruce Barringer University of Central Florida.
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Transcript of 10-1 Chapter Ten Financial Projections Dr. Bruce Barringer University of Central Florida.
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 10-2
Introduction
Sources and uses of funds statement Assumptions sheet Income statements Balance sheets Cash flows Ratio analysis
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 10-3
Sources and Uses of Funds Statement
The sources and use of funds statement is a document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 10-4
Assumptions Sheet
An assumptions sheet is an explanation of the most critical assumption that your financial statements are based on
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Financial Statements
Income statement Balance sheet Cash flow statement
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Income Statement
Net sales Cost of good
sold Operating
expenses
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Net Sales
Net sales consists of total sales minus allowances for returned goods and discounts
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Cost of Goods Sold
Cost of goods sold includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor
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Operating Expenses
Operating expenses include marketing, utilities, and administrative costs not directly related to producing a product or service
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Balance Sheet
A balance sheet is a projection of a firm’s assets, liabilities, and owner’s equity at a specific point in time
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Balance Sheet
Assets Current assets Fixed assets
Liabilities Current liabilities Long-term liabilities Owner’s equity
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Cash Flow
Operating activities
Investing activities
Finance activities
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Operating Activities
Operating activities include net income (or loss), depreciation, and changes in current assets and current liabilities other than cash
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Investing Activities
Investing activities include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings
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Financing Activities
Financing activities include cash raised during the period by borrowing money, making payments on loans, or paying dividends
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One Final Note
Demonstrate the ability to prepare financial statements
Break even analysis
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Ratio Analysis
Profitability Ratios
Liquidity Ratios
Overall Financial Stability
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright ©2009 Pearson Education, Inc. publishing as Prentice Hall