10-1 Chapter Ten Financial Projections Dr. Bruce Barringer University of Central Florida
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-2 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 Hall10-3 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 Hall10-4 Assumptions Sheet An assumptions sheet is an explanation of the most critical assumption that your financial statements are based on
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-5 Financial Statements Income statement Balance sheet Cash flow statement
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-6 Income Statement Net sales Cost of good sold Operating expenses
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-7 Net Sales Net sales consists of total sales minus allowances for returned goods and discounts
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-8 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
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-9 Operating Expenses Operating expenses include marketing, utilities, and administrative costs not directly related to producing a product or service
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-10 Balance Sheet A balance sheet is a projection of a firm’s assets, liabilities, and owner’s equity at a specific point in time
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-11 Balance Sheet Assets Current assets Fixed assets Liabilities Current liabilities Long-term liabilities Owner’s equity
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-12 Cash Flow Operating activities Investing activities Finance activities
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-13 Operating Activities Operating activities include net income (or loss), depreciation, and changes in current assets and current liabilities other than cash
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-14 Investing Activities Investing activities include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-15 Financing Activities Financing activities include cash raised during the period by borrowing money, making payments on loans, or paying dividends
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-16 One Final Note Demonstrate the ability to prepare financial statements Break even analysis
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall10-17 Ratio Analysis Profitability Ratios Liquidity Ratios Overall Financial Stability
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