financial planning presentation 20160301 18072237

8/18/2019 Financial Planning Presentation 20160301 18072237

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Financial Planning andForecasting Financial Statem

Presented ByDalia Mohamed

Heba-tullah Azzam

Mohamed Abdel Ta

Rasha Khedr

With Dr. Samia K


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CHAPTER 14

CONTENTS

Financial planning definitio

importance and types.

Cash budget.

Pro forma income statemen

Pro forma balance sheet.


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FINANCIAL PLANNINGDEFINITION:• The task of determining how the organization will aord to a

strategic goals.

•Created immediately after the vision and obectives have be

determined.

•!escribes activities" reso#rces" e$#i%ment" and materials neachieve an

organization&s obectives as well as the timeframe.

BENEFITS:•!evelo%ing a 'nancial %lan is critical to the s#ccess of anyorganization.•(t validates the b#siness %lan" by con'rming that the obectiv

achievable from a 'nancial %oint of view.


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FinancialPlanning

FinancialPlanning

Long-term, orstrategic

nancial !lans

Long-term, orstrategic

nancial !lans

S"ort-term, oroperating !lans

and #$dgets

S"ort-term, oroperating !lans

and #$dgetsGuides

Cas" !lanning)%re%aring thecash b#dget*

)%

st


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CAS% PLANNING: CAS% B&DGET

•+tatement of the 'rm,s %lanned in-ows and o#t-ows of cash t#sed

to estimate its shortterm cash re$#irements.

• Covers a 0year %eriod" divided into smaller time intervals.

• The n#mber of intervals de%end on the nat#re of the b#siness.

The more seasonal and #ncertain a 'rm,s cash -ows" the gr

n#mber of intervals.


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T%E GENE'AL FO'(AT OF T%CAS% B&DGET


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)ECT'A (AN&FACT&'ING P'O FO'(INCO(E STATE(ENT

•3 sim%le method for develo%ing a %ro forma income statemis the

!ercent-o*-sales met"od+

•(t forecasts sales and then e4%resses the vario#s incomestatement items as %ercentages of %roected sales.

• The %ercentages #sed are likely to be the %ercentages of

for those items in the %revio#s year.Sales Forecast *or )ectra(an$*act$ring ./

Unit sales Dollar salesModel X 1,500 Model X ($25/unit) $ 37,500Model Y 1,950 Model Y ($50/unit) 97,500

Total $135,000


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A Pro Forma Income Statement

5sing the Percentof+ales method

Man#fact#ring for the year 7

80" 290

+ales reven#e

;08


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BALANCE S%EET 3 n#mber of sim%li'ed a%%roaches are available for %re%ar

forma balance sheet.

Ane involves estimating all balance sheet acco#nts as a%ercentage of sales.

3 better and more %o%#lar a%%roach is the #dgmental a%%r

'nancial Manager %#ts his #dgments and ass#m%tions" #ndthe 'rm estimates the val#es of certain balance sheet acc#ses its e4ternal 'nancing as a balancing" or F%l#g"G 'g#r


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TO APPL1 T%E 2&DG(ENTAL APP'OAC% TO P'EPA'E )ECT'A (AN&./ P'O FO'(A BALANCE S%EET, BELO3 ASS&(PTIONS A'E (AD

Minim#m cash balance of ;"999 is desired.

Marketable sec#rities will remain #nchanged from their c#rrent level of ;D"999 3cco#nts receivable on average re%resent abo#t D< days of sales )abo#t 0H> o

Beca#se 6ectra,s ann#al sales are %roected to be ;08"999. 3dding the ;29"999 ac$#isition to the e4isting net '4ed assets and s#

de%reciation of ;>"999 yields net '4ed as sets of ;8"999. 3cco#nts %ayable sho#ld e$#al one'fth %#rchases which is ass#med to be 8

ann#al sales which is ;>099

Ta4es %ayable will e$#al onefo#rth of the c#rrent year,s ta4 liability.

otes %ayable will remain #nchanged from their c#rrent level" and no changec#rrent liabilities is e4%ected.


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, 2&DG(ENTAL APP'OAC%, 1AI )ECT'A(AN&FACT&'ING )!7C7MB7I 80" 290*


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THANKS FOR YOUR ATTENTION

financial planning presentation 20160301 18072237

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