FIN 300 Lecture Notes - Lecture 4: Accounts Payable, Financial Statement, Promissory Note
26 Dec 2016
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Investments in new assets capital budgeting decisions. Degree of financial leverage capital structure decisions. Cash paid to shareholders dividend policy decisions. Planning horizon divide decisions into short-run decisions (usually next 12 months) and long-run decisions (2-5 years) Aggregation combine capital budgeting decisions into one big project. Run several scenarios where you vary the assumptions by reasonable amounts. Determine at least a worst case, normal case and best case scenario. Forecast of key variables (e. g. sales growth, interest rates etc. ) Historical growth rates (e. g. average growth rate) Economic analysis (e. g. relate to gdp growth, interest rates, employment rates etc. ) Industry analysis (e. g. firm and competitor analysis, new product development, advertising and credit policy, production capacity) Simple model used as the first step in the forecasting process. Assumptions are ok for an initial estimate, but should look closely at each account to see if the assumptions are reasonable. O(cid:373)e ite(cid:373)s te(cid:374)d to (cid:448)a(cid:396)(cid:455) di(cid:396)e(cid:272)tl(cid:455) (cid:449)ith sales, (cid:449)hile othe(cid:396)s do(cid:374)"t.
