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Chapter 7 (II)
Funds Analysis, Cash-Flow
Analysis, and Financial
Planning
Learning outcomes
After todays lecture you should be able to:
Prepare
$ 17
169
$ 15
123
39
42
$225
$180
$ 28
108
$ 23
205
$ 18
164
$ 21
128
31
27
51
41
$167
$255
$233
$190
DEC
$ 39
JAN
$ 35
FEB
$ 64
MAR
$ 53
APR
$ 40
MAY
$ 48
JUN
$ 50
$ 64
$ 53
$ 40
$ 48
111
34
$209
107
34
$194
92
34
$166
92
34
$174
JAN
FEB
MAR
$163
$163
$209
70
0
25
$258
40
0
0
$203
0
9
0
$218
APR
MAY
JUN
$194
$166
$174
0
0
25
$219
0
0
0
$166
0
10
0
$184
90
394
696 Prepaid
5 Accum
10
Current
Assets
$ 1,195 Fixed
Assets (@Cost)
1,030 Less:
Acc. Depr.
(329) Net Fix.
Assets
$ 701
Investment, LT
50
Other Assets, LT
223
Total Assets
$2,169
Notes Payable
$ 290
Acct. Payable
94
Accrued Taxes
16
Other Accrued Liab.
100
Current Liab.
$ 500
Long-Term Debt
530
Shareholders Equity
Com. Stock ($1 par)
200
Add Pd in Capital
729
Retained Earnings
210
Total Equity
$1,139
Total Liab/Equity
$ 2,169
JAN
$ 90
FEB MAR
$ 57 $ 34
225
258
$( 33)
180
167
203
218
$( 23) $( 51)
$ 57
$ 34
$( 17)
APR
$( 17)
MAY JUN
$ 19 $ 86
255
219
$ 36
233
166
$ 67
190
184
$ 6
$ 19
$ 86
$ 92
Range of
Cash-Flow Estimates
Examine factors that may influence cash receipts
such as changes in the state of the economy that
influence consumer buying decisions and pricing
strategies.
Examine factors that may influence cash
disbursements such as changes in the state of the
economy that impact operations, capital
expenditures, and dividend payments.
Management Uncertainty in
Ending Cash Balances
PROBABILITY OF
OCCURRENCE
January Distribution
$37
$51
$57
$69
$77
Management Uncertainty in
Ending Cash Balances
PROBABILITY OF
OCCURRENCE
February Distribution
$34
$14
$24
$44
$54
Forecasting
Financial Statements
Expected future financial statements based on
conditions that management expects to exist
and actions it expects to take.
Considerations
(1) Forecasted Income Statement
(2) Forecasted Balance Sheet
Basket Wonders
Common Size Income Statements
$2,036
Summary