1 Financial Modeling & Forecasting Jason MacMorran
2 Presentation Outline I. Introduction and Learning Objectives II. Definitions and Standards Overview III. Uses for Financial Models IV. Basics of Financial Modeling V. Basics of Financial Analysis VI. Sensitivity and Scenario Analysis VII. Conclusion
3 Learning Objectives Understand accounting standards related to prospective information. Discuss uses and applications for financial models, including uses as decision making tools. Understand basic design and creation of a financial model. Understand uses for financial analysis and sensitivity analysis.
4 Definitions and Standards Overview
5 Definitions and Standards Overview The words projection, forecast, pro forma, model, etc., are often used interchangeably relative to prospective information. In an accounting context, they have different meanings. Generally speaking, the projection, forecast, pro forma or budget will be the output, and the financial model will include the inputs and output. This section is not intended to be authoritative or a detailed look at standards, but a general overview of what to look for and where to find it!
6 Key Accounting Terms Forecast presents an entity s expected financial position, results of operations, and cash flows, based on responsible party s assumptions reflecting conditions it expects to exist and actions it expects to take. Projection presents an entity s financial position, results of operations, and cash flows, based on one or more hypothetical (what ifs) assumptions provided by a responsible party. Hypothetical Assumption - an assumption used to present a condition or course of action that is not necessarily expected to occur, but is consistent with the purpose of the projection (i.e. expansion scenario).
7 Key Accounting Terms Financial Analysis practitioner develops assumptions, analyzes results, and recommends a course of action. Partial Presentation a presentation of prospective financial information that excludes one or more of the items required for prospective financial statements. Responsible Party person or persons responsible for assumptions underlying the prospective financial statements.
8 Types of Presentations Prospective Information Prospective Financial Statements Forecast Projection Prospective, but not Financial Statements Partial presentations Financial analyses Not Prospective Information Pro forma, based on historical amounts Expired budgets
9 Uses of Prospective Information General Use use by persons with whom the responsible party is not directly negotiating, for example: Offering of debt or equity securities under SEC regulations. Offering of tax-exempt bonds. Limited Use use only by the entity with whom the responsibly party is negotiating, for example: Private placement. Negotiating bank financing. Merger negotiations. Internal Use solely for use by the responsible party.
10 Uses of Prospective Information Type of Prospective Presentation Appropriate Uses General Use Limited Use Internal Use Forecast Yes Yes Yes Projection No Yes Yes Partial Presentation No Yes Yes Financial Analysis No Yes Yes
11 Types of Engagements Third-party Use: Special disclaimer on current year budgets practitioners may not be required to apply any procedures if they make certain disclaimers. Compilation assembling prospective statements in conformity with presentation guidelines and issuing report. Agreed-upon procedures varies by engagement, and can be very limited or quite extensive. Examination evaluating assumptions and presentation of financial information and issuing report. Internal Use: Assembly no type of assurance, does not require report.
12 Independence Independence is required in examination and agreed-upon procedures engagements, but not in compilation or internal use engagements because no assurance is expressed.
13 Exceptions Litigation and valuation projects often have exceptions to procedure and presentation rules, so long as they are properly disclaimed.
14 Key Finance Terms Net Present Value present value of expected future cash flows minus initial investment. Internal Rate of Return discount rate at which investment has zero net present value.
15 Resources Accounting AICPA Attestation Standards AICPA Guide for Prospective Financial Information AICPA Practice Aid 06-2 Preparing Financial Models PPC s Guide to Forecasts and Projections Finance Brealey & Myers Principles of Corporate Finance
16 Uses for Financial Models
17 Background Financial models should tell a story. What is the business going to do? How is it going to do it? How is it reflected in the financials? Financial models capture the future operating, investing and financing activities that determine future profitability, financial position, and risk. Financial models should be comprehensive, internally consistent, and externally reasonable.
18 Background Financial models can integrate elements of accounting, finance, economics, corporate psychology, and business philosophy. Accounting based models compilations for investors / creditors. Finance / economics based models decision making (net present value, internal rate of return, etc.). Psychology / Philosophy In a decision making model, how will competitors react to your planned actions? Does the plan involve risks you know you re unwilling to take?
19 Uses for Financial Models Financing (debt or equity) Merger / Acquisition Buy vs. Lease Lost Profits Valuation Business Interruption Budgeting Litigation Support Business Plans Start-ups Strategic Plans Contraction / Closure Expansion
20 Financial Models in Everyday Life A financial model does not have to be complex! Simple situations call for simple financial models: Buy vs. lease of vehicle Impact of change in interest rate on borrowing Payback period on an investment Complex situations call for complex financial models: Merger and acquisition pro-forma and future cost savings Entering new markets / launching new products Litigation
21 Basics of Financial Modeling
22 Basics of Financial Modeling Define the need Basic organization Sample construction Other layout considerations
23 Define the Need What is the desired goal of the financial model? Launching a new product? Integrating a potential acquisition? Refinancing debt? Who is the expected user? Management? Investors? Bankers? What is the expected use? Internal? External? The above issues will govern the sophistication and reporting requirements of a financial model.
24 Define the Need Presentation / engagement will depend on purpose and audience. May require complete financial statements over a defined time period. May require limited information over a defined time period. May require one-time sources and uses of funds.
25 Complete Financial Statements Most difficult and time consuming to prepare, but also most instructive to user: Balance Sheet measures future liquidity and leverage Income Statement measures future operating results Statement of Cash Flows outlines future cash needs for growth (investment and borrowing) and returns to investors Collectively, complete financial statements can help measure return on investment and potential risks.
26 Limited Information Most common, including: Prepare a twelve month budget Six months of start-up expenses Amortize a loan over five years Do not necessarily have to be financial statements!
27 Sources and Uses of Funds SOURCES AND USES Where is money coming from (bank debt, equity, etc). What is it going to be spent on (equipment, refinance, operating costs, etc). Often seen in refinancing and bond offerings. Contribution Cap % Sources Cash on Hand $ % Bank Revolver 0 0.0% Senior Bank Note 20, % Subordinated Bank Note 5, % Owner Contribution 10, % New Equity 50, % Total Sources $ 85, % Uses Purchase new equipment $ 10, % Operating costs 25, % Office manager 40, % Refinance Existing Debt 0 0.0% Working Capital 10, % Cash % Total Uses $ 85, %
28 Time Period Generally, time period should match the business life cycle. 5 year projection for a 20 year real estate deal may not be helpful. 20 year projection in a rapidly changing industry may not be relevant. How to handle changes in the economy? For litigation or damage oriented models, time period should correspond to period of damage.
29 Basic Organization Most financial models include the following basic elements: Identification of the problem to be solved (buy vs. lease, expansion, new location, etc.) Key assumptions (sales growth, margins, capital expenditures, impact of competitors, etc.) Output / results (financial statements, net present value, go / no go decision, etc.)
30 Sample Construction Problem - Client / Employer wants to expand an existing product into a new geographic market (new location). Which question is better: Will the project be profitable? Will the project provide an adequate return on investment? Accounting based financial statements will show profitability. Net present value / internal rate of return analysis will show return on investment.
31 Sample Construction - Scope Problem and expected use/users will define scope of financial model. In the case of expansion / new location, the following factors should be considered: Will be a long-term project Will likely require significant investment (equity and /or debt) Will likely require consideration of competitor reactions Based on this problem and expected use/users, output should be complete presentation over a long-term, with consideration of return on the investment.
32 Sample Construction - Assumptions What are key assumptions? Will vary by client and industry May be impacted by current economic environment in short-term Critical points: Assumptions should be defined separately (i.e. a separate tab in Excel workbook); often referred to as projection drivers Assumptions should be reasonable and logical Assumptions should be supported by historical trends, industry trends, economic data, or other data (will discuss later) Bad assumptions = bad decisions!
33 Sample Construction - Assumptions Sample Company Projection Assumptions Growth Rates Line Item Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Revenues 5% 5% 5% 5% 5% Salaries 5% 5% 5% 5% 5% Benefits 5% 5% 5% 5% 5% Supplies 5% 5% 5% 5% 5% Licenses 5% 5% 5% 5% 5% Utilities 5% 5% 5% 5% 5% Repairs and maintenance 5% 5% 5% 5% 5% Insurance 5% 5% 5% 5% 5% Telephone 5% 5% 5% 5% 5% Management fees 5% 5% 5% 5% 5% Miscellaneous 5% 5% 5% 5% 5% Accounts Receivable Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Assumed days outstanding Accounts receivable turnover Projected Net Sales $ 953,135 $ 1,000,792 $ 1,050,831 $ 1,103,373 $ 1,158,542 $ 1,216,469 Projected accounts receivable $ 182,793 $ 191,933 $ 201,529 $ 211,606 $ 222,186 $ 233,295 Accounts Payable Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Assumed days outstanding Accounts payable turnover Projected Operating Expenses, less Int & Depr $ 718,244 $ 751,156 $ 785,714 $ 822,000 $ 860,100 $ 900,105 Projected accounts payable $ 27,549 $ 28,811 $ 30,137 $ 31,529 $ 32,990 $ 34,525
34 Sample Construction Income Statement Easiest place to start: Core assumptions relate to operations (growth rates, margins, etc.) Operations not dependent on balance sheet or cash flows When appropriate, separate fixed and variable costs. If model is very detailed, consider separate worksheets for departments, revenues, cost of revenues, operating expenses, etc. Separating the model into smaller parts helps to catch errors!
36 Sample Construction Balance Sheet Often more difficult to model, mostly because cash balances are iterative (turn on Excel feature). Working capital (receivables, inventory, payables) projected from assumptions, such as days outstanding / turnover ratios. Capital expenditures need to support expected level of operations. Financing (debt / equity) will depend on capital needs, working capital requirements, etc. Retained earnings will roll from net income.
37 Sample Construction Balance Sheet Sample Company Projected Balance Sheets Year 1 Year 2 Year 3 Year 4 Year 5 Terminal ASSETS Current Assets Cash $ 366,367 $ 564,455 $ 773,599 $ 946,853 $ 1,182,298 $ 1,409,996 Accounts receivable 182, , , , , ,295 Total Current Assets 549, , ,128 1,158,459 1,404,484 1,643,292 Fixed Assets Fixed assets, at cost 748, , , , , ,450 Accumulated depreciation (140,533) (281,066) (421,599) (572,132) (722,665) (722,665) Total Fixed Assets, net 607, , , ,318 75,785 75,785 Total Assets 1,157,077 1,223,771 1,301,979 1,384,777 1,480,269 1,719,077 LIABILITIES & EQUITY Liabilities Accounts payable 27,549 28,811 30,137 31,529 32,990 34,525 Notes payable 61,291 46,964 31,993 16,349 (0) (0) Total Liabilities 88,840 75,776 62,130 47,877 32,990 34,525 Equity Capital contributions 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Retained earnings 68, , , , , ,552 Total Equity 1,068,237 1,147,996 1,239,849 1,336,899 1,447,279 1,684,552 Total Liabilities and Equity $ 1,157,077 $ 1,223,771 $ 1,301,979 $ 1,384,777 $ 1,480,269 $ 1,719,077
38 Sample Construction Cash Flow Connect the parts from the Balance Sheet and Income Statement. Consider a T=0 time period for initial investments (capital expenditure, debt financing, equity financing, etc). Is there a minimum days cash on hand to start with? This will influence financing requirements. Cash balances are iterative (turn on Excel feature).
39 Sample Construction Cash Flow Sample Company Projected Cash Flows T=0 Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Cash Flows from Operating Activities Net Income $ - $ 68,237 $ 79,758 $ 91,853 $ 97,050 $ 110,380 $ 237,273 Adjust for non-cash items Depreciation - 140, , , , ,533 - Adjust for changes in: (Increase) decrease in accounts receivable (174,089) (8,704) (9,140) (9,597) (10,076) (10,580) (11,109) Increase (decrease) in accounts payable 26,347 1,202 1,262 1,326 1,392 1,461 1,534 Net Cash Provided (Used) by Operations (147,742) 201, , , , , ,698 Cash Flows from Investing Activities Capital expenditures (748,450) (50,000) - - Net Cash Used in Investing (748,450) (50,000) - - Cash Flows from Financing Activities Loan proceeds 75, Member contributions 1,000, Principal payments - (13,709) (14,326) (14,971) (15,645) (16,349) - Net Cash Provided (Used) by Financing 1,075,000 (13,709) (14,326) (14,971) (15,645) (16,349) - Net Increase in Cash 178, , , , , , ,698 Cash, Beginning of Year - 178, , , , ,853 1,182,298 Cash, End of Year $ 178,808 $ 366,367 $ 564,455 $ 773,599 $ 946,853 $ 1,182,298 $ 1,409,996
40 Sample Construction Iterative Calculations
41 Sample Construction Cash Flows Most overlooked in financial modeling, but most important. Statement of Cash Flows shows: Timing of capital expenditures for growth Additional borrowing needs Ability to provide return on investment Cash flows available to investors (free cash flows) is a core element in financial decision making, and is essential to a net present value analysis or an internal rate of return analysis.
42 Sample Construction Decision Making Sample Company Decision Making T=0 Year 1 Year 2 Year 3 Year 4 Year 5 Terminal EBIT $ 94,358 $ 109,103 $ 124,584 $ 130,840 $ 147,909 $ 316,364 Less: tax on EBIT (23,590) (27,276) (31,146) (32,710) (36,977) (79,091) After-tax EBIT 70,769 81,827 93,438 98, , ,273 Add: depreciation N/A 140, , , , ,533 - Less: capital expenditures (50,000) - - Less: working capital requirements (7,502) (7,877) (8,271) (8,685) (9,119) (9,575) Free Cash Flows to Debt and Equity $ 203,799 $ 214,483 $ 225,700 $ 189,978 $ 252,346 $ 227,698 Free Cash Flows to Debt and Equity $ (1,075,000) $ 203,799 $ 214,483 $ 225,700 $ 189,978 $ 252,346 $ 1,138,490 Present Value (1,075,000) 186, , , , , ,203 Net Present Value $ 129,942 Required Rate of Return 20%
43 Other Layout Consideration Have a summary tab that provides the answer concisely. Have designated input only tabs and clearly delineate variables. Link and cross-link worksheets Use Excel formulas: If/then Average and median Lookup Forecast Trend
44 Basics of Financial Analysis
45 Why Perform Financial Analysis? Projection assumptions can be supported by historical financial analysis. Basic financial analysis tools include: Common size financial statements Ratio analysis Trend analysis Industry comparatives Financial analysis tools and techniques can: Isolate trends (positive and negative). Help identify strengths and weaknesses.
46 Common Size Financial Statements Income Statement line items as a percentage of revenues: Identify changes in cost of sales, gross profits, and operating expense margins over time. Balance Sheet line items as a percentage of total assets: Identify changes in (and composition of) current assets and liabilities, fixed assets, debt, and other balances sheet items over time. Are margins and compositions expected to stay the same in the future? Why have margins changed? Were the changes expected?
47 Ratio Analysis Ratio analysis can assist with understanding and projecting: Growth Cost control Asset turnover Profitability Risk How these ratios have changed (or not) over time. How do ratios compare to benchmarks? Integra Information (www.integrainfo.com) RMA Statement Studies (www.statementstudies.org) Trade associations
48 Ratio Analysis Growth Ratios Growth in revenues Growth in expenses Growth in earnings Cost Control Ratios Often common size income statement / margins Turnover Ratios Receivable turnover Inventory turnover Payable turnover Total asset turnover
49 Ratio Analysis - Example Sample Company Projection Assumptions Growth Rates Line Item Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Revenues 5% 5% 5% 5% 5% Salaries 5% 5% 5% 5% 5% Benefits 5% 5% 5% 5% 5% Supplies 5% 5% 5% 5% 5% Licenses 5% 5% 5% 5% 5% Utilities 5% 5% 5% 5% 5% Repairs and maintenance 5% 5% 5% 5% 5% Insurance 5% 5% 5% 5% 5% Telephone 5% 5% 5% 5% 5% Management fees 5% 5% 5% 5% 5% Miscellaneous 5% 5% 5% 5% 5% Accounts Receivable Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Assumed days outstanding Accounts receivable turnover Projected Net Sales $ 953,135 $ 1,000,792 $ 1,050,831 $ 1,103,373 $ 1,158,542 $ 1,216,469 Projected accounts receivable $ 182,793 $ 191,933 $ 201,529 $ 211,606 $ 222,186 $ 233,295 Accounts Payable Year 1 Year 2 Year 3 Year 4 Year 5 Terminal Assumed days outstanding Accounts payable turnover Projected Operating Expenses, less Int & Depr $ 718,244 $ 751,156 $ 785,714 $ 822,000 $ 860,100 $ 900,105 Projected accounts payable $ 27,549 $ 28,811 $ 30,137 $ 31,529 $ 32,990 $ 34,525
50 Ratio Analysis Profitability Ratios Return on Assets (ROA) Return on Equity (ROE) Return on Investment (ROI) Risk Ratios Leverage Interest coverage Current ratio
51 Financial Analysis Beware the pitfalls: Ratios can be complicated by accounting methods: How do comparable companies report inventory, depreciation, etc. GAAP allows for different treatments, and different accounting treatments can skew ratio output. Ratios are industry dependent : CPA firms use different ratios than manufacturing firms Be cautious of rules of thumb Financial analysis tools are diagnostic; they do a better job of raising questions than providing answers!
52 Sensitivity and Scenario Analysis
53 Sensitivity Analysis Sensitivity Analysis How does the projection respond to different shocks? Important to know which variables and assumptions are most influential in your model.
54 Scenario Analysis Run multiple scenarios: Measure outcomes of events with different influences. Often used to see best case and worst case. Used to establish a range of cash flows for the company, but does not necessarily increase confidence in decision.
55 Monte Carlo Analysis Monte Carlo analysis: Measures outcomes of events with random influences and assigns probabilities based on frequency. Can run tens of thousands of potential scenarios in seconds. Does not give you THE answer, but gives confidence in the range of answers for a set of variables.
57 Parting Thoughts Be sure to define the problem and expected use. Support the assumptions. Consider alternative scenarios. Provide the right output for the expected user.
59 Contact Information Jason MacMorran, CPA/ABV, CVA, CFF, MS Postlethwaite & Netterville, APAC 8550 United Plaza Blvd., Suite 1001 Baton Rouge, LA
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold
Financing Entrepreneurial Ventures Part 1 Financial Plan & Statements Barbara Peitsch Program Director, Univ. of Michigan Peter Scott Professor of Entrepreneurship/Consultant August 2015 Economic Empowerment
Chapter 15 Accounting & Financial Statements Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Bookkeeping vs. Accounting Bookkeeping Accounting The recording of business transactions.
Farmer-to-Consumer Marketing #6 Financial Management Scope of Financial Management Managing the financial affairs of a direct marketing operation includes: Raising capital Identifying financial objectives
Chapter 2 Financial Statement and Cash Flow Analysis Answers to Concept Review Questions 1. What role do the FASB and SEC play with regard to GAAP? The FASB is a nongovernmental, professional standards
Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements In the United States, businesses generally present financial information in the form of financial statements
Assessing Viability and Feasibility of Business Ideas Dr. Neeraj Pandey Assistant Professor LM Thapar School of Management WHY NEW VENTURES FAIL Lack of Objective Evaluation No Real Insight into the Market
Press Release INTERACTIVE DATA REPORTS FOURTH-QUARTER AND FULL- YEAR 2014 RESULTS New York February 12, 2015 Interactive Data Corporation today reported its financial results for the fourth quarter and
Financial Planning for East Coast Yachts Prepared for East Coast Yachts Prepared by Dan Ervin, Mary-Ann Lawrence, Kevin Klepacki, Katie Wilson, Andrew Wright January 1, 2010 Table of Contents iii Table
Ratio Analysis: Liquidity, Activity & Coverage Quality of Earnings Fraudulent actions Above-average financial risk One-time transactions Borrow from the future/reach into the past Ride the depreciation
2. Liquidity analysis: Length of cash cycle Operating cycle of a merchandising firm: number of days it takes to sell inventory + number of days until the resulting receivables are converted to cash Acquisition
PROFITABILITY ANALYSIS The following financial statements for Spencer Company will be used to demonstrate the calculation of the various ratios in profitability analysis. Spencer Company Comparative Balance
business builder 4 how to prepare a cash flow statement zions business resource center zions business resource center 2 how to prepare a cash flow statement A cash flow statement is important to your business
100 Arbor Drive, Suite 108 Christiansburg, VA 24073 Voice: 540-381-9333 FAX: 540-381-8319 www.becpas.com Providing Professional Business Advisory & Consulting Services Douglas L. Johnston, II firstname.lastname@example.org
FIN 301 Class Notes Chapter 17: Financial Statement Analysis INTRODUCTION Financial ratio: is a relationship between different accounting items that tells something about the firm s activities. Purpose
FSA Note: Summary of Financial Ratio Calculations This note contains a summary of the more common financial statement ratios. A few points should be noted: Calculations vary in practice; consistency and
ENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure Chapter 7. Methods of Financial Forecasting: Integrated Financial Modeling Questions and Problems 1. The cash cycle is the time between when
Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Credit is the lifeblood of South Louisiana business, especially for the smaller firm. It helps the small business owner get started, obtain equipment, build inventory,
RATIO ANALYSIS-OVERVIEW Ratios: 1. Provide a method of standardization 2. More important - provide a profile of firm s economic characteristics and competitive strategies. Although extremely valuable as
PLANNING FOR SUCCESS P a g e 0 PLANNING FOR SUCCESS P a g e 1 Planning for Success: Your Guide to Preparing a Business and Marketing Plan This guide is designed to help you put together a comprehensive,
Financial Plan The Financial Plan is perhaps one of the most important components of your Business Plan (see Business Plan Handout). Not only is it essential if you are seeking external financing it is
Guide to Financial Statements Study Guide Overview (Topic 1) Three major financial statements: The Income Statement The Balance Sheet The Cash Flow Statement Objectives: Explain the underlying equation
Business Valuation A presentation for Manitoba Learning Match 2014 February 11, 2014 Daniel Bernard, CA, CBV J.P. Barnabé, CA Overview When to get a Valuation Valuation Reports Basic Principles of Valuation
Management Accounting 319 Financial Statement Ratio Analysis Financial statements as prepared by the accountant are documents containing much valuable information. Some of the information requires little
Module 2: Preparing for Capital Venture Financing Building Pro-Forma Financial Statements Module 2: Preparing for Capital Venture Financing Building Pro-Forma Financial Statements TABLE OF CONTENTS 1.0
C H A P T E R 1 0 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS I N T R O D U C T I O N Historically, profit-oriented businesses have used the accrual basis of accounting in which the income statement,
FINANCIAL ANALYSIS CS Sample Reports version 2008.x.x TL 19887 (10/14/2008) Copyright Information Text copyright 2004-2008 by Thomson Reuters/Tax & Accounting. All rights reserved. Video display images
C&I LOAN EVALUATION & UNDERWRITING A Whitepaper C&I Lending Commercial and Industrial, or C&I Lending, has long been a cornerstone product for many successful banking institutions. Also known as working
BUSINESS PLAN TEMPLATE MANUFACTURING COVER SHEET (This highlights how you can be contacted. numbers and email addresses listed are operational.) Ensure that telephone 1. Identify the Business 2. Identify
Integrated Case 4-25 D Leon Inc., Part II Financial Statement Analysis Part I of this case, presented in Chapter 3, discussed the situation of D Leon Inc., a regional snack foods producer, after an expansion
The Orangeville & Area Small Business Enterprise Centre (SBEC) 87 Broadway, Orangeville ON L9W 1K1 519-941-0440 Ext. 2286 or 2291 email@example.com www.orangevillebusiness.ca Supported by its Partners:
Please NOTE This example report is for a manufacturing company; however, we can address a similar report for any industry sector. Performance Review For the period ended 12/31/2013 Provided By Holbrook
HEALTHCARE FINANCE: AN INTRODUCTION TO ACCOUNTING AND FINANCIAL MANAGEMENT Online Appendix A Financial Ratios INTRODUCTION In Chapter 17, we indicated that ratio analysis is a technique commonly used to
Learning Objectives FI3300 Corporation Finance Spring Semester 2010 Dr. Isabel Tkatch Assistant Professor of Finance Explain the objectives of financial statement analysis and its benefits for creditors,
CHAPTER 11 Creating a Successful Financial Plan The Importance of a Financial Plan Financial planning is essential to running a successful business and is not that difficult! Common mistake among business
Financial Terms & Calculations So much about business and its management requires knowledge and information as to financial measurements. Unfortunately these key terms and ratios are often misunderstood
Midterm Fall 2012 Solution Instructions: 1) Answers for the multiple-choice questions must be recorded on the UW answer card. All other questions must be answered in the space provided on the examination
LEADing Practice Financial Scorecard Measurements Scorecard Area Finance & Accounting Scorecard Group Accounting ratios Balance sheet Scorecard Performance Measurement Deferred revenue as % of total revenue
Chapter 18 Financial Planning Answers to Concept Review Questions 1. What is the financial planning process? What is a strategic plan? Describe the roles that financial managers play with regard to strategic
Second Quarter 2015 Earnings Conference Call NYSE: CVA JULY 22, 2015 Cautionary Statements All information included in this earnings presentation is based on continuing operations, unless otherwise noted.
Business Plan Planning Service Financial Analyses and Projections Financials Included With Every Ceo Resource Plan These are the financial analyses and projections that are included with all plans developed
APX GROUP HOLDINGS, INC. REPORTS FIRST QUARTER 2015 RESULTS First Quarter 2015 Financial and Portfolio Highlights APX Group Reports Total Revenue of $149.9 Million, up 14.9% Year over Year Adjusted EBITDA
What Do Short-Term Liquidity Ratios Measure? What Is Working Capital? HOCK international - 2004 1 HOCK international - 2004 2 How Is the Current Ratio Calculated? How Is the Quick Ratio Calculated? HOCK
Topic 9 Preparing a Successful Financial Plan LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the overview of accounting methods; 2. Prepare the three major financial statements
Understanding Business Valuations SBA America East Conference August 1, 2012 Neal Patel, CBA Reliant Business Valuation Abridged Slides: Email firstname.lastname@example.org for full presentation Appraiser s Professional
Cash Flow Analysis 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology Mar 1/3, 2004 1 About The Exam March 10 th a week from today.
ABSTRACT Smithfield Motors: A case in lending, strategy, and value Steve A. Nenninger Sam Houston State University The primary subject matter of this case is financial statement analysis. Issues examined
Understanding Financial Management: A Practical Guide Guideline Answers to the Concept Check Questions Chapter 3 Interpreting Financial Ratios Concept Check 3.1 1. What are the different motivations that
ADDITIONAL REFERENCES AND FINANCIAL MODELS: For more information about financial statements and terms refer to e book, How to Read Financial Statements. Advanced financial models providing 5 year projections
Accounting Principles Critical to Success Presented By: C. P. Krishnan Basic Accounting You Need to Know Assets, Liabilities, Equity, Income, & Expenses Assets Includes what you have and what people owe
APX GROUP HOLDINGS, INC. REPORTS FIRST QUARTER 2014 FINANCIAL RESULTS 1st Quarter Financial Highlights Total revenues of $130.2 million for the first quarter 2014, an increase of 21.8%, compared to $106.9
CHAPTER 11 Creating a Successful Financial Plan The Importance of a Financial Plan Financial planning is essential to running a successful business and is not that difficult! Common mistake among business
How to Assess Your Financial Planning and Loan Proposals By BizMove Management Training Institute Other free books by BizMove that may interest you: Free starting a business books Free management skills
5-Year County-Level Financial Profile Industry Report Architectural Services (SIC Code: 8712) in Prince George County, Maryland Sales Range: $500,000 - $999,999 Date: 11/07/08 Report Description This 5-Year
ENGI 8607: Business Planning and Strategy in an Entrepreneurial Environment ZipCar Dr. Amy Hsiao Lecture 5 Memorial University of Newfoundland ZipCar Components of a Business Model How It Works http://www.zipcar.com/cambridge/findcars?zipfleet_id=94396
Questions and Problems Chapters 2,3 pp45-47 1. Building a balance sheet. Penguin Pucks, Inc., has current assets of $3,000, net fixed assets $6,000, current liabilities of $900, and long-term debt of $5,000.
BUYING OR SELLING A BUSINESS: A CHECKLIST FOR SUCCESSFULLY NEGOTIATING PRICE Phil Thompson Business Lawyer, Corporate Counsel www.thompsonlaw.ca A COMMON GOAL AND COMMON UNDERSTANDINGS Agreed: Our common
Excellence in Financial Management Discussion Board Articles Ratio Analysis Written by: Matt H. Evans, CPA, CMA, CFM All articles can be viewed on the internet at www.exinfm.com/board Ratio Analysis Cash
Finance Master Winter 2015/16 Jprof. Narly Dwarkasing University of Bonn, IFS Chapter 2 Outline 2.1 Firms Disclosure of Financial Information 2.2 The Balance Sheet 2.3 The Income Statement 2.4 The Statement
Financial Statement Analysis: An Introduction 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Scope of Financial Statement Analysis... 3 3. Major
CHAPTER 3 LONG-TERM FINANCIAL PLANNING AND GROWTH Answers to Concepts Review and Critical Thinking Questions 5. The sustainable growth rate is greater than 20 percent, because at a 20 percent growth rate
TYPES OF FINANCIAL RATIOS In the previous articles we discussed how to invest in the stock market and unit trusts. When investing in the stock market an investor should have a clear understanding about
8 Lecture Liquidity and Working Capital Analysis Liquidity and Working Capital Operating Activity Additional Liquidity Measures Current assets Current Liabilities Working Capital Current ratio Cash-based
Measuring Financial Performance: A Critical Key to Managing Risk Dr. Laurence M. Crane Director of Education and Training National Crop Insurance Services, Inc. The essence of managing risk is making good
Valuing the Business 1. Introduction After deciding to buy or sell a business, the subject of "how much" becomes important. Determining the value of a business is one of the most difficult aspects of any
SMALL BUSINESS DEVELOPMENT CENTER RM. 032 FINANCING THROUGH COMMERCIAL BANKS Revised January, 2013 Adapted from: National Federation of Independent Business report Steps to Small Business Financing Jeffrey
Zayo Group Holdings, Inc. Reports Financial Results for the Third Fiscal Quarter Ended March 31, 2016 Third Fiscal Quarter 2016 Financial Highlights $478.0 million of consolidated revenue, including $96.1
CHAPTER OUTLINE Spotlight: J&S Construction Company (http://www.jsconstruction.com) 1 The Lemonade Kids Financial statement (accounting statements) reports of a firm s financial performance and resources,