Financial Planning, Forecasting & Budget

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Financial Planning, forecasting & Budgeting Rio

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By: adamspowel (30 month(s) ago)

Great we sell Financial Budgeting Software in UK at http://www.financialdriver.com

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Financial Forecasting,Planning, and Budgeting : 

Financial Forecasting,Planning, and Budgeting

Financial Forecasting : 

Financial Forecasting 1) Project sales revenues and expenses.

Financial Forecasting : 

Financial Forecasting 1) Project sales revenues and expenses. 2) Estimate current assets and fixed assets necessary to support projected sales.

Financial Forecasting : 

Financial Forecasting 1) Project sales revenues and expenses. 2) Estimate current assets and fixed assets necessary to support projected sales. Percent of sales forecast

Percent of Sales Method : 

Percent of Sales Method Suppose this year’s sales will total $32 million. Next year, we forecast sales of $40 million. Net income should be 5% of sales. Dividends should be 50% of earnings.

Slide 6: 

This year % of $32m Assets Current Assets $8m 25% Fixed Assets $16m 50% Total Assets $24m Liab. and Equity Accounts Payable $4m 12.5% Accrued Expenses $4m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $15m Common Stock $7m n/a Retained Earnings $2m Equity $9m Total Liab. & Equity $24m

Slide 7: 

Next year % of $40m Assets Current Assets 25% Fixed Assets 50% Total Assets Liab. and Equity Accounts Payable 12.5% Accrued Expenses 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 8: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets 50% Total Assets Liab. and Equity Accounts Payable 12.5% Accrued Expenses 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 9: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets Liab. and Equity Accounts Payable 12.5% Accrued Expenses 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 10: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable 12.5% Accrued Expenses 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 11: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 12: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 13: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 14: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 15: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock n/a Retained Earnings Equity Total Liab. & Equity

Slide 16: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings Equity Total Liab. & Equity

Predicting Retained Earnings : 

Predicting Retained Earnings Next year’s projected retained earnings = last year’s $2 million, plus:

Predicting Retained Earnings : 

Predicting Retained Earnings Next year’s projected retained earnings = last year’s $2 million, plus: projected net income cash dividends sales sales net income x x ( 1 - )

Predicting Retained Earnings : 

Predicting Retained Earnings Next year’s projected retained earnings = last year’s $2 million, plus: projected net income cash dividends sales sales net income $40 million x .05 x (1 - .50) x x ( 1 - )

Predicting Retained Earnings : 

Predicting Retained Earnings Next year’s projected retained earnings = last year’s $2 million, plus: projected net income cash dividends sales sales net income $40 million x .05 x (1 - .50) = $2 million + $1 million = $3million x x ( 1 - )

Slide 21: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity Total Liab. & Equity

Slide 22: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity $10m Total Liab. & Equity

Slide 23: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity $10m Total Liab. & Equity $27m

Slide 24: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity $10m Total Liab. & Equity $27m How much Discretionary Financing will we Need?

Slide 25: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity $10m Total Liab. & Equity $27m How much Discretionary Financing will we Need?

Slide 26: 

Next year % of $40m Assets Current Assets $10m 25% Fixed Assets $20m 50% Total Assets $30m Liab. and Equity Accounts Payable $5m 12.5% Accrued Expenses $5m 12.5% Notes Payable $1m n/a Long Term Debt $6m n/a Total Liabilities $17m Common Stock $7m n/a Retained Earnings $3m Equity $10m Total Liab. & Equity $27m How much Discretionary Financing will we Need?

Predicting Discretionary Financing Needs : 

Predicting Discretionary Financing Needs

Predicting Discretionary Financing Needs : 

Predicting Discretionary Financing Needs Discretionary Financing Needed =

Predicting Discretionary Financing Needs : 

Predicting Discretionary Financing Needs Discretionary Financing Needed = projected projected projected total - total - owners’ assets liabilities equity

Predicting Discretionary Financing Needs : 

Predicting Discretionary Financing Needs Discretionary Financing Needed = projected projected projected total - total - owners’ assets liabilities equity $30 million - $17 million - $10 million

Predicting Discretionary Financing Needs : 

Predicting Discretionary Financing Needs Discretionary Financing Needed = projected projected projected total - total - owners’ assets liabilities equity $30 million - $17 million - $10 million = $3 million in discretionary financing

Sustainable Rate of Growth : 

Sustainable Rate of Growth

Sustainable Rate of Growth : 

Sustainable Rate of Growth g* = ROE (1 - b) where

Sustainable Rate of Growth : 

Sustainable Rate of Growth g* = ROE (1 - b) where b = dividend payout ratio (dividends / net income)

Sustainable Rate of Growth : 

Sustainable Rate of Growth g* = ROE (1 - b) where b = dividend payout ratio (dividends / net income) ROE = return on equity (net income / common equity) or

Sustainable Rate of Growth : 

Sustainable Rate of Growth g* = ROE (1 - b) where b = dividend payout ratio (dividends / net income) ROE = return on equity (net income / common equity) or net income sales assets sales assets common equity ROE = x x

Budgets : 

Budgets Budget: a forecast of future events.

Budgets : 

Budgets Budgets indicate the amount and timing of future financing needs. Budgets provide a basis for taking corrective action if budgeted and actual figures do not match. Budgets provide the basis for performance evaluation.