COMM 2202 Lecture Notes - Lecture 4: Retained Earnings, Accounts Payable, Capital Structure
13 Dec 2018
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Document Summary
Chapter 4: long-term financial planning and corporate growth. Examining interactions - helps management see that interactions between decisions. Exploring options - gives management a systematic framework for exploring its opportunities (issue new debt, issue more shares, reduce dividends paid out) Avoid surprises - management identi es possible outcomes and plan accordingly. Ensuring feasibility and internal consistency - determine if goals can be accomplished and the goals of the form are consistent with one another. Sales forecast - many cash ows depend directly on the level of sales (using a growth rate in sales) Pro forma statements - future, projected nancial statement. Asset requirements - how much additional xed assets will be required to meet sales projections. Your balance sheet will not be balanced (need more assets than we have) Financial requirements - how much are we short (need - assets, have - liabilities + equity) Plug variable - what type of nancing will be used.
