Financial Management

Chapter 4 Financial be after and Forecasting Financial Statements ANSWERS TO SELECTED END-OF-CHAPTER QUESTIONS 4-1 a. The ca-ca out plan provides detailed carrying out guidance designed to easygoing upon corporate objectives. It dilate who is obligated for what particular function, and when peculiar(prenominal) tasks atomic number 18 to be accomplished. Many companies use an run plan which spans a 5- class period, and indeed is called the five-year plan. b. The fiscal plan details the monetary aspects of the confederacys operating plan. In entree to an analysis of the households current financial condition, the financial plan commonly includes a gross revenue bode, the detonating device budget, the cash budget, pro forma financial dictations, and the external financing plan. c. A gross gross sales forecast is legato the forecast of unit and dollar bill sales for some afterlife period. Of course, a lot of work is required to produce a good sales forecast. Generally, sales forecasts are based on the recent trend in sales plus forecasts of the efficient prospects for the nation, industry, region, and so forth. The sales forecast is critical to good financial planning. d. With the percent of sales prevision method, many items on the income story and balance sheets are pretended to increase proportionally with sales.

As sales increase, these items that are even to sales also increase, and the roundabout of these items for a particular year are estimated as percentages of the forecasted sales for that year. e. Funds are self-producedly generated if a liability a ccount increases spontaneously (automatically) as sales increase. An increase in a liability account is a starting time of bills, thus cash in hand have been generated. Two examples of spontaneous liability accounts are accounts payable and accrued wages. Note that nones payable, although a current liability account, is not a spontaneous source of funds since an increase in notes payable requires a specific action between the sloshed and a creditor. f. The percentage of...If you lack to get a in full essay, order it on our website: Ordercustompaper.com

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