Business Administration - Management FIS403 Chapter Notes - Chapter 4.1: Pro Forma, Financial Statement, Retained Earnings
3 Dec 2017
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Chapter 4 - outline: what is financial forecasting, pro forma income statement, cash budget, pro forma balance sheet, percent-of-sales method, summary and conclusions. Explain why financial forecasting is essential for the healthy growth of the firm. (lo1) Prepare the four financial statements for forecasting. (lo2) Perform the specific accounts method and the percent-of-sales method for forecasting on a less precise basis. (lo3) Determine the need for new funding resulting from sales growth. (lo4) Calculate the required new funds (rnf) and sustainable growth rate (sgr). (lo5) Assess and apply the effects of ifrs on forecasting financial statements. (lo6: financial forecasting is looking ahead to develop a financial. 2 methods of financial forecasting: using pro forma, or projected, financial statements (more exact, time consuming) Pro forma financial statement: pro forma income statement (i/s, pro forma statement of retained earnings, cash budget, pro forma balance sheet (b/s)
