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    Prepairing, Analyzing and Forecasting: Financial Statements: Quantifying The Business Plan

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    Princess Joy Morales
    This document discusses preparing, analyzing, and forecasting financial statements. It explains how to analyze income statements and balance sheets to understand a business's performance over time. It also outlines how to forecast future financial statements, including income statements, balance sheets, funds flows, and cash flows. Forecasting considers factors like market conditions, competition, regulations, technology changes, and how the organization will respond. The goal is to understand a business's short-term survival and long-term sustainability.

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    Prepairing, Analyzing and Forecasting: Financial Statements: Quantifying The Business Plan

    Uploaded by

    Princess Joy Morales
    59 views5 pages
    This document discusses preparing, analyzing, and forecasting financial statements. It explains how to analyze income statements and balance sheets to understand a business's performance over time. It also outlines how to forecast future financial statements, including income statements, balance sheets, funds flows, and cash flows. Forecasting considers factors like market conditions, competition, regulations, technology changes, and how the organization will respond. The goal is to understand a business's short-term survival and long-term sustainability.

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    CHAPTER VII.pptx

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    This document discusses preparing, analyzing, and forecasting financial statements. It explains how to analyze income statements and balance sheets to understand a business's performance over time. It also outlines how to forecast future financial statements, including income statements, balance sheets, funds flows, and cash flows. Forecasting considers factors like market conditions, competition, regulations, technology changes, and how the organization will respond. The goal is to understand a business's short-term survival and long-term sustainability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    59 views5 pages

    Prepairing, Analyzing and Forecasting: Financial Statements: Quantifying The Business Plan

    Uploaded by

    Princess Joy Morales
    This document discusses preparing, analyzing, and forecasting financial statements. It explains how to analyze income statements and balance sheets to understand a business's performance over time. It also outlines how to forecast future financial statements, including income statements, balance sheets, funds flows, and cash flows. Forecasting considers factors like market conditions, competition, regulations, technology changes, and how the organization will respond. The goal is to understand a business's short-term survival and long-term sustainability.

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    You are on page 1of 5

    CHAPTER VII

    PREPAIRING, ANALYZING
    AND FORECASTING
    FINANCIAL STATEMENTS:
    QUANTIFYING THE BUSINESS
    PLAN
    CASH FLOW
    SUPPLIERS
    CREDIT
    RAW MATERIALS
    AND SUPPLIERS

    BANK
    LOANS
    CASH

    LAND, BUILDING,
    STOCKHOLDERS MACHINERY,
    EQUITTY EQUIPMENT,
    FIXTURES VEHICLES
    LIABILITIES ASSETS
    - Suppliers credit ( all suppliers - Cash ( cash inflows minus cash
    credit availed of less what has been outflows)
    paid for) - Accounts recievables (sales not yet
    - Debt (all dept incurred less all collected )
    principal payments paid) - Inventories( all merchandise sold)
    - Equity ( capital put in plus all net - Fixed assets
    profits generated ( or net losses Land
    incurred) Minus all dividends paid Buildings
    out) Machinery and equipment
    Vehicles, etc.
     
    Less: accumulated depreciation
     

    Total liabilities Total assets


    Analyzing Financial Statements
    Financial statements are nothing but absractions of all he business
    transactions going on in an enterprise. Analysing or interpreting financial
    statements can give very powerful insights into how an enterprise is
    conducting itself. One of the most easily understood financial statements is
    the income statement, also called the profit and loss statement.
    Income Statement Analysis
    The top line of the income statement is sales. One can compare the sales
    figures of an enterprise over the years to see whether is growing or not.
     
    Balance Sheets Analysis
    The balance sheet items are logically arranged by the accountant for
    convenient analysis.
    ASSETS
     CURRENT ASSETS – those convertible to cash within a relatively short
    of period of time.
     FIXED ASSETS- led by land, which is the most saleable among them
     OTHER ASSETS- usually intangible, such as organizational development
    expenses are enterprise creation expenses
     TOTAL ASSETS
    FORECASTING FINANCIAL STATEMENTS
     The art of financial forecasting is popular among entrepreneurs who know their businesses
    inside out. It enables them to ask the following questions, among many, prior to a financial
    forecasting exercise:
     What will happen to the market conditions tomorrow?
     What will competition do?
     What products and services will come out?
     What technology is in store for us?
     What will interest rates be like?
     How will the economy grow?
     What regulaions might he government impose?
     What changes are happening in the environment?
     How is our organization responding to these changes?
     What are we capable of doing or not doing tomorrow?

    INCOME STATEMENT FORECASTING


    BALANCE SHEET FORECASTING
    What the balance sheet of an enterprise will look like in the future depends a lot on the future
    sales.
    FUNDS FLOW FORECASTING
    Compute for the increase or decrease in the different items found in he asses and liabilities.

    CASH FLOW FORECASTING


    The entrepreneur or finance manager is concerned about enterprises survival on a day to day
    basis as well as its long term sustainability.

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