1. Jeroen E. Ligterink jeroenl@fee.uva.nl www.fee.uva.nl/fm
Financiering
Jeroen E. Ligterink
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2. BMM 18: Financial Planning
Topics Covered
What is Financial Planning?
Financial Planning Models
Example: Executive Cheese
Planners Beware
External Financing and Growth
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3. Financial Planning The Financial Planning Process
Analyzing the investment and financing choices open to the firm.
Projecting the future consequences of current decisions.
Deciding which alternatives to undertake.
Measuring subsequent performance against the goals set forth in the financial plan.
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4. Financial Planning Models
Inputs
Planning Model
Outputs
Inputs - Current financial statements. Forecasts of key variables (such as sales or interest rates).
Planning Model - Equations specifying key relationships.
Outputs - Projected financial statements (pro forma). Financial ratios. Sources and uses of funds.
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5. Financial Planning Models
Pro Formas - Projected or forecasted financial statements.
Percentage of Sales Model - Planning model in which sales forecasts are the driving variable and most other variables are proportional to sales.
Balancing Item - Variable that adjusts to maintain the consistency of a financial plan. Also called plug.
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6. Executive Cheese Current Income Statement and Balance Sheet
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7. Executive Cheese Pro forma Income Statement and Balance Sheet
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8. Executive Cheese
Pro forma Balance Sheet with dividends fixed at $180 and debt used as the balance item.
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9. Executive Fruit
1999 Financial Statements

10. Executive Fruit
2000 Pro Forma Statements

11. Planners Beware
Percent of sales methods are not realistic because fixed costs exist.
Most models generate accounting numbers not financial cash flows
Adjustments must be made to consider these and other factors.
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12. External Financing & Growth
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13. BMM 19: Working capital management and short term planning
Links Between Long-Term and Short-Term Financing
Tracing Changes in Cash and Working Capital
Cash Budgeting
A Short-Term Financing Plan
Sources of Short-Term Financing
The Cost of Bank Loans
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14. Cash Conversion Cycle Cash Raw materials Receivables inventory
Period between firm’s payment for materials and collection on its sales.
Cash
Raw materials
inventory
Receivables
Finished goods
inventory
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15. Cash conversion cycle
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16. Example - Cash Conversion Cycle
Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle.
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17. Example - Cash Conversion Cycle Inventory period
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18. Example - Cash Conversion Cycle Receivables period
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19. Example - Cash Conversion Cycle: Payable period
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20. Cash Budgeting Steps to preparing a cash budget
Step 1 - Forecast the sources of cash.
Step 2 - Forecast uses of cash.
Step 3 - Calculate whether the firm is facing a cash shortage or surplus.
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21. Sources of Short Term Financing
Bank loans
Commercial paper
Secured loans
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22. Cost of Bank Loans Simple Interest Effective annual rate
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23. Cost of Bank Loans
Discount Interest
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24. Minicase chapter 19
Autodealer Capstan heeft in 2005 regeling uitgestelde betaling (koop nu betaal over een half jaar) ingevoerd. Het is nu einde eerste kwartaal 2006
Wat zijn de consequenties van de kortingsaktie?
Investering in netto werkkapitaal
Hoe is het gefinancierd?
Bancaire financiering
Bank wil niet verder financieren, is dit juist bezien vanuit haar perspectief?