What does âsustainable earningsâ mean? Why is it an important component of forecasting and valuation?
For unlimited access to Homework Help, a Homework+ subscription is required.
4.1 To what extent do you agree or disagree with the following statement? âAn important top-management job is to make certain that the companyâs actual growth rate and sustainable growth rate are as close together as possible.â
Mr. Vaticinate, your boss at Speedy Bicycle Manufacturing, does not believe in annual sales forecasting. This is a manufacturer of specialty off-road bicycles. Explain to Mr. Vaticinate the tradeoffs between forecasting and not forecasting annual sales. If he were to decide to not forecast what are the alternatives available to him in order to make profits? By the way, does anyone know the definition of vaticinate?
a. What is forecasting risk? Why is it a concern for the financial manager?
b. What are some potential sources of value in a new project?