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Chapter 10
 

Chapter 10

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    Chapter 10 Chapter 10 Presentation Transcript

    •  
    • Chapter 10 The Financial Plan
    • Sequence of Financial Statements
      • Budgets
        • Operating- Short-Term
        • Capital- Long-Term
      • Pro Forma Statements
    • Pro Forma Statements
      • Pro Forma Income
        • Sales Budget By Month
        • Expenses Are Function Of Sales Level
      • Pro Forma Cash Flow
        • Cash Receipts
        • Cash Payments
      • Pro Forma Balance Sheet
      • Pro Forma Sources & Applications of Funds
    • Daily Knowledge On Financial Position
      • Cash Balance On Hand
      • Bank Balance
      • Daily Summaries Of Sales/Cash Receipts
      • Problems In Credit Collections
      • Record Of Money Paid Out
      • Slow-Paying Accounts Receivable
      • Discounts Offered On Accounts Payable
      • Payroll- Hours Worked & Payroll Owed
      • Taxes- When Taxes Due & Reports Required
      Weekly Knowledge On Financial Position
    • Monthly Knowledge On Financial Position
      • Provide Records
        • Receipts
        • Disbursements
        • Bank Accounts
        • Journals
      • Review
        • Income Statement
        • Balance Sheet
      • Reconcile Checking Account
      • Balance Petty Cash Account
      • Review Tax Requirements & Make Deposits
      • Review/Age Accounts Receivable
    • Sales Budget
      • Calculate Sales Expectations In Units
      • Utilize
        • Marketing Research
        • Industry Sales
        • Experience
      • Forecasting Techniques
        • Survey of Buyers
        • Sales Force Opinions
        • Expert Opinions
        • Time Series Analysis
    • Cash Flow: (Cash Flow From Operating Activities)
      • Net Income XXX
      • Adjustments to NI
      • Noncash/Nonoperating Items
      • +Depreciation XXX
      • Cash Changes in Current Assets/Liabilities
      • +/- Accounts Receivable XXX
      • +/- Inventory XXX
      • +/- Prepaid Expenses XXX
      • +/- Accounts Payable XXX
      • Net Cash From Operations XX,XXX
    • Cash Flow: (Cash Flow From Other Activities)
      • Capital Expenditures (-) (XXX)
      • Payments of Debt (-) (XXX)
      • Dividends Paid (-) (XXX)
      • Sale of Stock XXX
      • Net Cash From Other Activities (XXX)
      • Net Cash From Operations XXX
      • Net Cash From Other Activities (XXX)
      • Increase/(Decrease) in Cash XXX
    • Pro Forma Balance Sheet
      • Assets
      • Current Assets
      • Cash $50,400
      • Accounts Receivable 46,000
      • Merchandise Inventory 10,450
      • Supplies 1,200
      • Total Current Assets $108,050
      • Fixed Assets
      • Equipment $240,000
      • Less Depreciation 39,600
      • Total Fixed Assets $200,400
      • Total Assets $308,450
      • =======
      Pro Forma Balance Sheet (cont’d)
      • Total Liabilities & Owners’ Equity
      • Current Liabilities
      • Accounts Payable $23,700
      • Current Portion of L.T. Debt 16,800
      • Total Current Liabilities $40,500
      • Long-Term Liabilities
      • Notes Payable $209,200
      • Total Liabilities $249,700
      Pro Forma Balance Sheet (cont’d)
      • Owners’ Equity
      • C. Peters, Capital $25,000
      • K. Peters, Capital 25,000
      • Retained Earnings 8,700
      • Total Owners’ Equity $58,750
      • Total Liabilities & Owners’ Equity $308,450
      • =======
      Pro Forma Balance Sheet (cont’d)
    • Break-Even Analysis B/E(Q) = Total Fixed Cost SP per Unit – VC per Unit
    • Break-Even Graph Break-Even TR = TC
    • Pro Forma Sources & Applications of Funds
      • Sources of Funds
      • Mortgage Loan $150,000
      • Term Loan 75,000
      • Personal Funds 50,000
      • Net Income From Operations 8,750
      • Add Depreciation 39,600
      • Total Funds Provided $323,350
      • Applications of Funds
      • Purchase of Equipment $240,000
      • Inventory 10,450
      • Loan Repayment 16,800
      • Total Funds Expended $267,250
      • Total Funds Provided $323,350
      • Total Funds Expended 267,250
      • Net Increase in Working Capital $56,100
      • ======
      Pro Forma Sources & Applications of Funds(cont’d)