Chapter_03Long-Term Financial Planning and Growth(公司理财-四川大学,

Chapter 3zsong@http://

Long-Term Financial Planning and Growth3-0

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Chapter Outline What is Financial Planning? Financial Planning Models: A First Look The Percentage of Sales Approach External Financing and Growth Some Caveats Regarding Financial Planning Modelszsong@http://

3-1PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

3.1 What is Financial Planning? Elements of Financial Planning Investment in new assets determined by capital budgeting decisionszsong@http://

Degree of financial leverage determined by capital structure decisions

Cash paid to shareholders determined by dividend policy decisions

Liquidity requirements determined by net working capital decisions

3-2PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Financial Planning Process Planning Horizon short-run decisions (usually next 12 months) long-run decisions (usually 2– 5 years)zsong@http://

Aggregation combine capital budgeting decisions into one big project

Assumptions and Scenarios Make realistic assumptions about important variables Run several scenarios where you vary the assumptions by reasonable amounts Determine at least a worst case, normal case and best case scenario3-3

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Role of Financial Planning Examine interactions help management see the interactions between decisionszsong@http://

Explore options give management a systematic framework for exploring its opportunities

Avoid surprises help management identify possible outcomes and plan accordingly

Ensure feasibility and internal consistency help management determine if goals can be accomplished and if the various stated (and unstated) goals of the firm are consistent with one another 3-4PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

3.2 A Financial-Planning Model: Ingredients Sales Forecast many cash flows depend directly on the level of sales (often estimated sales growth rate) zsong@http://

Pro Forma Statements setting up the plan as projected financial statements allows for consistency and ease of interpretation

Asset Requirements the additional assets that will be required to meet sales projections

Financial Requirements the amount of financing needed to pay for the required assets

Plug Variable determined by management decisions about what type of financing will be used (makes the balance sheet balance)

Economic Assumptions explicit assumptions about the coming economic environmentPDF文件使用"pdfFactory Pro"试用版本创建洀| http://

3-5

Example: Historical Financial StatementsGourmet Coffee Inc. Balance Sheet Decemb

er 31, 2007 Assets 1000 Debt 400 Equity 600 Total Gourmet Coffee Inc. Income Statement For Year Ended December 31, 2007 Revenues Costs 1000 Total 1000 Net Income 2000 1600 400zsong@http://

3-6PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Example: Pro Forma Income Statement Initial Assumptions Revenues will grow at 15% (2000*1.15) All items are tied directly to sales and the current relationships are optimal Consequently, all other items will also grow at 15%zsong@http://

Gourmet Coffee Inc. Pro Forma Income Statement For Year Ended 2007 Revenues 2,300 Costs Net Income 1,840 4603-7

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Example: Pro Forma Balance Sheet Case I Dividends are the plug variable, so equity increases at 15% Dividends= 460 NI– 90 increase in equity= 370 zsong@http:// Gourmet Coffee Inc. Pro Forma Balance Sheet Case 1 Assets Total 1,150 Debt Equity 1,150 Total Gourmet Coffee Inc. Pro Forma Balance Sheet Case 1 Assets 1,150 Debt Equity Total 1,150 Total 460 690 1,150

Case II Debt is the plug variable and no dividends are paid Debt= 1,150– (600+460)= 90 Repay 400– 90= 310 in debt

90

1,060 1,1503-8

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

3.3 The Percentage of Sales Method Some items vary directly with sales, while others do not Income Statement Costs may vary directly with sales - if this is the case, then the profit margin is constant Depreciation and interest expense may not vary directly with sales– if this is the case, then the profit margin is not constant Dividends are a management decision and generally do not vary directly with sales– this affects additions to retained earnings zsong@http://

Balance Sheet Initially assume all assets, including fixed, vary directly with sales Accounts payable will also normally vary directly with sales Notes payable, long-term debt and equity generally do not because they depend on management decisions about capital structure The change in the retained earnings portion of equity will come from the dividend decision

3-9

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Example: Income StatementTasha’s Toy Emporium Income Statement, 2007% of Sales Sales Costs EBT Taxes (40%) Net Income Dividends Add. To RE 5,000 3,000 2,000 800 1,200 600 600 zsong@http:// Tasha’s Toy Emporium Pro Forma Income Statement, 2007 Sales 5,500 Costs 60% EBT Taxes 40% Net Income 16% Dividends 24% Add. To RE 3,300 2,200 880 1,320 660 660

Assume Sales grow at 10% Dividend Payout Rate= 50%3-10

PDF文件使用"pdfFactory Pro"试用版本创建洀| http://

Example: Balance SheetTasha’s Toy Emporium– Balance SheetCurrent% of Sales Pro Forma Current% of Pro Sales Forma

PDF文件使用"pdfFactory Pro"试用版本创

建洀| http://

zsong@http://

ASSETSCurrent Assets Cash A/R Inventory Total Fixed Asse …… 此处隐藏：5433字，全部文档内容请下载后查看。喜欢就下载吧 ……