《公司理财》3.pptVIP

3-* Financial Statements Analysis and Long-Term Planning Chapter 3 Copyright ? 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 3.4 Financial Models Investment in new assets – determined by capital budgeting decisions 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 Financial Planning Ingredients Sales Forecast – many cash flows depend directly on the level of sales (often estimate sales growth rate) Pro Forma Statements – setting up the plan as projected (pro forma) 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 environment Percent of Sales Approach Some items vary directly with sales, 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 Percent of Sales Approach Balance Sheet Initially assume all assets, including fixed, vary directly with sales. Accounts payable also normally vary directly with sales. Notes payable, long-term debt, and equity generally do not vary with sales because they depend on management decisions about capital structure. The change in the retained earnings portion of equity will come from the dividend decision. External Financing Needed (EF