Exam 11: Forecasting Financial Requirements

For the typical small firm,the primary source of equity capital for financing growth is

A line of credit is a short-term loan used in a business to help with financing fixed assets.

What are sources of equity ownership in a business? Are these sources cash resources?

Match the term with its definition. a.Cash budget b.Current ratio c.Line of credit d.Net working capital e.pro forma financial statements f.percentage-of-sales technique g.spontaneous debt financing -Statements that project a firm's financial performance and condition,including projected profits,assets and financing requirements,and cash flows

As her accounts payable and accrued expenses rose along with her firm's sales,Ariel noticed that ________ occurs.

Marcia like to use other people's money when financing her business.In this way she "does more with less" by controlling resources without actually owning them.

Alex wants to make sure he has enough liquid assets to pay his current bills.To do this,he should calculate his firm's:

A golf club should break down its annual cash budget into shorter time units because

Because Liam's new restaurant had a high volume of sales,his inventory needs increased illustrating that a firm's asset needs are the primary force driving sales.

The percentage-of-sales technique is an effective method for a new company to estimate asset requirements because asset-to-liabilities ratios tend to be relatively constant within an industry.

Willar expects his new business to support him and his family.This means his asset and financing requirements will:

Financial forecasts are required by lenders since they will want to know how they will be paid back;investors will use the forecasts to value the company.