Exam 15: Financial Planning and Forecasting

The set of assumptions underlying the firm's financial plan and the resulting projected financial statements are accordingly often referred to as which of the following?

Goldilochs Inc.reported sales of $8 million and net income of $2 million.The firm has a total asset turnover of 3.2.The firm's chief financial officer is projecting a $5 million increase in sales and that spontaneous liabilities will increase by $350,000 automatically.The firm currently pays out 80 percent of its net income to shareholders.Assuming that all assets and current liabilities are expected to grow with sales,how much in additional funds will Goldilochs need from external sources to fund the expected growth?

Suppose a firm has had the historical sales figures shown as follows.What would be the forecast for next year's sales using regression to estimate a trend?

Financial planning involves estimating projected cash flows,which is useful for all the following EXCEPT:

Goldilochs Inc.reported sales of $8 million and net income of $1.5 million.The firm has $10.5 million in total assets.The firm's chief financial officer is projecting a 25 percent increase in sales.The firm has $1.25 million in accounts payable and $1,500,000 in long-term debt (bonds).The firm currently pays out 20 percent of its net income to shareholders.Assuming that all assets and spontaneous liabilities are expected to grow with sales,how much in additional funds will Goldilochs need from external sources to fund the expected growth?

The financial plan is an important element in the process of strategic planning.What does strategic planning involve?

Suppose you were forecasting sales for a firm that exhibited a cyclical pattern within each week.How would you go about forecasting sales for this firm?

Suppose a firm has had the historical sales figures shown as follows.What would be the forecast for next year's sales using the average approach?

Explain when it is appropriate to use the naїve,average,and seasonality- and trend-adjusted approaches to forecasting sales.

Suppose a firm has had the historical sales figures shown as follows.What would be the forecast for next year's sales using regression to estimate a trend?

Explain the process of financial planning process of a firm.

Silly Putty Inc.has had sales of $12 million,$17 million,and $16 million for each of the last three years.What would be the MAPE if the actual sales were $15 million using the average approach?